EFFECT OF CORPORATE SOCIAL RESPONSIBILITY ON CORPORATE FINANCIAL PERFORMANCE: A

COMPERTITIVE-ACTION PERSPECTIVE

(THE CASE OF MTN, TIGO, VODAFONE AND AIRTEL)

FRED NARH OSSOM

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 ABSTRACT
In the last two decades, business managers have come under pressure to allocate scarce corporate

resources to the environment that is continually mounting pressure on them. This concept of

allocating scarce resources has gained currency recently, although its existence can be traced some

late decades. I attempt to provide a more clear view of the relationship between corporate social

responsibility (CSR) and firm financial performance using a competitive-action perspective.

However, the study adopted quantitative and qualitative research strategy. Subsequently, survey

questionnaire was used to elicit response from the target population. The data gathered was subjected

to rigorous analysis involving Tobins Q and relative importance index. I argue that competitive

action should be considered as an important contingency but not a necessary one that should be

simultaneously applied with CSR in telecom industry. Using data MTN, TOGO, VODAFONE &

AIRTEL in the Ghanaian telecom industry between 2010 and 2015, Based on the overall sample, the

findings revealed that socially responsible activities (positive CSR) enhance firm financial

performance but combined with competitive-action does not increase CFP at a higher level and same

applies to NCSR. By introducing competitive action as an important contingency, this study

contributes to the literature on CSR and KNUST library portal.

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 CHAPTER ONE

1.0 Background

Corporate social responsibility has become a common practice among most companies in Ghana

especially the telecom companies in Ghana. It is one of the newly discovered management strategies

where organisations try to create a good relationship with their community in order to influence for

the better and the same time going on with activities of business. With reference to Holme & Watts

(2000) Corporate Social Responsibility is a constant commitment by companies to act in an ethical

way and add to economic development and at the same time making the life of its workforce and their

families a quality one as well as the society in they operate as a whole. Organizations sometimes

makes ethical decision in their planning of the well being of their business by making decisions that

will ensure lowering government interference in their operations. For about five centuries now

researchers has been trying to examine and analyze various concept and theories concerning the

responsibilities of business in society.

Mostly, companies embark on different types of activities, including corporate social responsibility

(CSR), to lift up its competitive position a competitively advantageous situation enabling the firm to

enjoy better financial performance (Li et el., 2009; Porter, 1980). CSR do sometime make people

view companies differently from other rivals (Hull & Rothenberg, 2008; Jones, 1995) by building up

reputation and obtaining support from diverse stakeholders, thus improving corporate financial

performance (CFP). Empirical findings confirm a small but positive relationship between CSR and

CFP in general (for details, see Aguinis & Glavas, 2012; Peloza, 2009). However, some few

inconsistent results in researches in the past have indicated that the means through which CSR

contributes to CFP is complex and beyond a direct causal relationship (Hull & Rothenberg, 2008;

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Wang & Qian, 2011).

The study therefore analyze this hard to understand relationship by introducing competitive action

(CA) as a contingency. CA refers to externally directed, specific, and observable competitive moves

to enhance a firms competitive position (Smith, Ferrier, & Ndofor, 2001: 321). Competitive Action

includes diverse competitive moves, such as new product introduction, marketing, and capacity

expansion, reflecting a firms aggressive search for new ways to satisfy its customers. Thus is to say,

active and constant CA enhances a firms competitive position and increases CFP. Both CA and CSR

are firm actions that do not only reinforce a firms competitive position but also fulfil its

responsibilities as a business entity to society. The social responsibility of an organization is made up

of the economic, legal, ethical, and discretionary expectations that society has of organizations at a

given point in time (Carroll, 1979: 500). Particularly, CA reflects a firms effort to fulfil its economic

responsibility because economic responsibility emphasizes that a firm must bring value to customers

by continuously striving to introduce new products, methods, and initiatives as a business entity

(Aupperle, Carroll, & Hatfield, 1985). By contrast, CSR embodies the ethical responsibility of a firm

(Carroll & Shabana, 2010; Mackey, Mackey, & Barney, 2007), which refers to a corporate voluntary

actions to pro-mote and pursue social goals that extend beyond their legal responsibilities (Carroll &

Shabana, 2010: 95). Notably, economic and ethical responsibilities coexist and may even overlap

(Carroll, 1979; Schwartz & Carroll, 2003) because actions that fulfil them, such as CA and CSR, can

contribute to firm performance. Given these characteristics of CA and CSR, integrating CA and CSR

would be an appropriate approach to elucidate the complex CSR-CFP relationship.

Specifically, the study first decomposes CSR into socially responsible activities or positive CSR

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(PCSR) and irresponsible activities or negative CSR (NCSR). While PCSR refers to voluntary

corporate actions designed to create benefits for diverse stakeholders (Mackey etal., 2007), NCSR

refers to the set of corporate actions that negatively affect identifiable social stakeholders legitimate

claims (in the long run) (Strike, Gao, & Bansal, 2006: 852). PCSR and NCSR are not directly

opposite but conceptually different; not doing things wrong does not necessarily mean doing things

right, and a firm can simultaneously engage in PCSR and NCSR, which suggests that PCSR and

NCSR are subject to different dynamics (Lange & Washburn, 2012; Mattingly & Berman, 2006).

Therefore, studying PCSR and NCSR separately has been suggested as a way to explore the complex

CSR-CFP link (Muller & Krussl, 2011; Strike etal, 2006).

The study then investigates the boundary conditions of CA on the relationship between both PSCR

and NCSR and CFP. Building on the RBV, I argue that the effects of PCSR and NCSR on CFP vary

with CA. The time has come for us to take CSR strategies more into account (Basu & Palazzo, 2008;

Rowley & Berman, 2000; Smith, 2003). According to Smith (2003) emphasizes also the importance

of this uniqueness. Applying these analytical measures on the selected Ghanaian telecom companies

will reveal the true relationship that exists between CSR and CFP with CA being a contingency.

1.1 Research Problem

a) Gap in CSR and CFP: While studies suggest a mild positive relationship (Orlizky, 2003),

this connection has not been fully established and the mechanisms through which firms

financial performance can be enhanced through CSR is not well understood (Jawahar and

McLoughlin, 2001).

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 b) Shareholders Insufficient investment in CSR: There is no reason to believe that

shareholders are willing to tolerate an amount of corporate non-profit activity which

appreciably reduces either dividends or the market performance of the stock (Hetherington,

1973).

c) Failure By literature to identify the relationship: Although numerous empirical studies

support the positive relationship between CSR and CFP, some inconsistencies in the

findings indicate that this relationship may be more complex than a direct causal

relationship (Hull&Rothenberg, 2008;Margolis&Walsh,2003). Therefore, these studies

have failed to tell the effects that CSR has on a firms financial performance; hence there

exists a knowledge gap. This study is therefore aiming at filling this gap by arguing that

CA is an important contingency that determines the effect of CSR activities on CFP.

1.2 Aim and Objectives of the Study

1.2.1 Aim of the Research

The aim of this research is to analyze the effect of CSR on CFP from a competitive action

perspective. Following objectives will be fulfilled through this research.

1.2.2 Specific Objectives

I. To analyze the strength of the relationship between CSR expenditure and CFP when

competitive action is introduce.

II. To determine if companies that CSR and CA coexist perform financially well.

III. To determine how CSR and CA improve corporate financial performance.

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1.3 Research Questions

i. What is the level of strength between CSR expenditure and CFP when competitive action

is introduce?

ii. Do companies who embark on both CSR and CA perform financial well?

iii. How do CSR and CA improve CFP?

1.4 Hypotheses Development

The role of CSR and CA in improving CFP

PCSR, NCSR, and CFP

a) NCSR and PCSR are conceptually distinct and one way to disentangle the complex CSR-CFP

relationship is to decompose CSR into PCSR and NCSR.

b) Conceptually, PCSR actions are meant to ensure the welfare of diverse stakeholders, whereas

NCSR actions may potentially harm the interests of stakeholders (Kotchen & Moon, 2011).

Accordingly, PCSR is expected to contribute to CFP and NCSR is expected to do the

opposite. Therefore these hypotheses are drawn.

Hypothesis 1a: A positive relationship exists between PCSR and CFP.

Hypothesis 1b: A negative relationship exists between NCSR and CFP.

Interaction Effects Between PCSR and CA on CFP

a) I predict that CA positively will moderates the relationship between PCSR and CFP because a

firm, as a business entity, should simultaneously fulfill its economic and social responsibilities

and Consequently, I present the following hypothesis:

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 Hypothesis 2: The relationship between PCSR and CFP is moderated by a firms level of CA,

such that the positive relationship between PCSR and CFP is stronger when the level of CA is

higher.

Interaction Effects Between NCSR and CA on CFP

Similarly, the effect of a firms NCSR on CFP may also vary with the firms level of CA. In

particular, I suggest that CA exacerbates the negative effect of NCSR on CFP for various reasons

and Consequently, I propose the following hypothesis:

Hypothesis 3: The relationship between NCSR and CFP is moderated by a firms level of CA,

such that the negative relationship between NCSR and CFP is stronger when the level of CA

is higher.

1.5 Significance of the study

I. The study will enable companies executives understand that, engaging in social activities

with the assistant of competitive action enhance corporate financial performance. Social

activities help companies to be known, as responsible corporate citizens with sensitivity

towards social and environmental issues (Carroll, 1979).

II. By understanding the effect of corporate social responsibility activities on financial

performance, investors will determine how to allocate their portfolio so as to maximize

returns and thereafter change their assessment of companies' performance and will be

making decisions based on criteria that will include ethical concerns (Carroll, 1991).

III. This study will add knowledge to previous studies on corporate social responsibility by

adding the component of its effect on long term financial performance.

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 IV. Analysts will find this study helpful when trying to understand the effect that engaging in

both CSR and CA has on a firms long term financial performance.

V. By investigating the effect of CSR and CA on CFP, the study findings will enrich the

discussions on CSR and contribute to the existing theories and literature on their

association.

1.6 Scope of the research

The research will focus on CSR and CA and their effect on CFP of the six selected

telecommunication companies in Ghana. Data on CSR, CA and financial statement from 2010 to

2015 will be considered.

Budget and Organisation of the study/Timescale

The timescale is design to take off just after the re-appearing for the defence of the proposal which is

expected to start after approval of the topic. The research is expected to last for Eight month from the

day of approval of the topic. Below is draft of the propose timescale

1st December 2015-23rd December 2014: submission of proposal

24th December 2015-1st January 2016: Christmas and New Year Holiday

2nd January 2016-31st March 2016: Review of literature and draft literature review

1st April 2016-30th April 2016: Collection of research materials, pilot study, identifying research

assistants, identifying possible limitation and seeking consent from the necessary authorities

15th April 2016-15th May 2016: Agree formal access to the selected telecom companies Ghana for

collection of primary data compile, pilot and revise questionnaire, administer questionnaire, final

collection of questionnaires and analysis of data, conducting the research study and recording data

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16th May 2016-30th June 2016: Evaluating, analyzing and interpretation of research findings and

completion of first draft of project report

1st July 2016-31st July 2016: Summarizing, concluding, and drawing recommendations, final writing

of project report and submission

Resources and limitation

I have access to computer hardware devices (MODEM) and software (SPSS AND MICROSOFT

EXCEL), Access to the organizations will be negotiated subject to a written confirmation. The

proposed organizations and the written confirmation will guarantee our rate of response expected

from the respondents but there are some limitation as well, money constraint, time constraints etc.

There are many telecommunication companies in Ghana but because of money and time constraint I

have limited myself to only the six. I am a self employed and will take care of all incidental costs as

part of my course expenses.

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 CHAPTER TWO

LITERATURE REVIEW

2.1 Introduction

Indubitably, the gap that exists between the plans to satisfy society needs in most of the less

developed countries in Africa, for that matter Ghana is very large. In these recent times, most

researchers have developed the interest to study the future of Africa. Visser (2005) gave a typical

example in the report for commission of Africa in 2005 over our common interest. Clearly,

corporations do have an important responsibility to play in changing Africa, with much of their

contributions being framed in terms of Corporate Social Responsibility (Visser, 2005). This explains

the fact that organization operating in a community has a role to play in the development of the

community in which it operates. The telecommunication industry is noted for its contributions

towards the transformation of economies in terms of Gross Domestic Product contribution, asset

creation, and employment creation among other things. Hence the effective engagement of Corporate

Social Responsibility by telecommunication companies can have tremendous benefits.

This chapter begins with reviewing literature on the CSR concept as an organizational event, CA as

an organizational event, history of CSR, evolution of CSR, relationship between CSR and CFP and

also the review attempts to cover at length the theoretical framework and hypothesis development and

went on to explain competitive actions (CA) as a contingency, touched on some drivers of CSR ,

empirical findings, also the inherent challenges hampering the effective practice of CSR and finally

ended with the benefit that accrue to CSR engagement. This chapter focuses on giving an insight on

the various aspects of the project topic to help develop the understanding of the research area.

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2.2 CSR CONCEPTS AS AN ORGANIZATIONAL EVENT

Corporation is noted to be an artificial being, so we dont expect it to have a soul and a body that can

be felt. And by God, it ought to have both (Poynder, 1844). Banerjee (2012) explains that In the

corporate economies of the contemporary West, the market is a passive institution. The active

institution is the corporation an inherently narrow and shortsighted organization. The corporation

has evolved to serve the interests of whoever controls it, at the expense of whoever does not. (Duggar,

1989) These two quotes, made 150 years apart, reflect a particular perspective of corporate social

responsibility that is rarely found in the management literature (Banerjee, 2012).

The concept of Corporate Social Responsibility (CSR) is derived from the idea of social

responsibility. According to Bonituo (2014) Organizations considered their very existence an

opportunity to contribute to the well-being of society and as such their mode of operation and

behavior were restructured to conform to the shared norms and values of society. CSR which was

known to be the social responsibility of entrepreneurs in the 1950s was portrayed as an organizational

event where entrepreneurs embark on corporate policies, corporate actions and take decisions which

were satisfactory or go along to societal objectives and values (Bonituo, 2014). Bonituo (2014)

argues that, Social responsibility was not a universal redress for societal problems but that it could

serve as a rightful platform and guideline for future business activities. Bown (1953) according to his

study, 1950 was the era where special attention was gives to the belief of social responsibility to the

oversight of the difficulties it posed to organizations and stakeholders in their efforts to act in a

socially responsible way. Even though Social responsibility as a concept has continue to grow in

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importance and significance has found its roots deeply in societal norms and values and have been

brought up to date and been touts in managerial settings of organizations as long as manager know

that decisions relating to social responsibility may result in the long term profit gain of their

organizations Bonituo (2014). This means that CSR has now been accepted into most organizational

decision making strategies. Economic gains in the form of profit maximization served as a reward to

organizations for being socially responsible. Therefore a powerful relationship now exists between

being socially responsible and doing business. Davis (1960) state that, for businessmen to be able to

exercise social power or gain economic benefits, their implementation of social responsibility

activities were strongly linked with the kind of benefits or social power they derived. According to

Committee for Economic Development (1970), the existence of business organizations was posited

in their interest to satisfy the needs of society through Corporate Social Responsibility in the areas of

job creation, economic growth and environmental conservation.

Large organizations with higher exposure are more inclined to make larger philanthropic gifts and

more likely to be strategically motivated to carry out Corporate Social Responsibility than smaller

organizations (Saiia, 2001). This means that, firms which are more established and well built

financially are more likely to undertake CSR policies than a newly growing once. Nevertheless,

according to Mezner & Nigh (1995), the bigger an organization, the bigger its organizational power

and that powerful organizations can use that as an opportunity to resist external pressure from

stakeholders to embark on Corporate Social Responsibility. The implementation of corporate social

responsibility policies in organizations depends on the level of it been inculcated into the

organizations cultures. Newly established businesses find it less appealing to adapt Corporate Social

Responsibility and for that matter may oppose any Corporate Social Responsibility interventions.

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Corporate Social Responsibility if accepted as imminent part of the organizations culture,

stakeholders in the organization are more ready to receive the concept as it becomes a shared value

and norm. Top management refusal to institutionalize the concept of Corporate Social Responsibility

do makes it hardly for other lower managerial ranks to take the lead. Cramer (2005) make us

understand that, the success of Corporate Social Responsibility is not solely rooted in the internal

learning processes but rather the extent to which the interaction between internal and external

stakeholders is integrated in the whole process. Communication between stakeholders is identified to

enhance the process.

2.3 CA CONCEPTS AS AN ORGANIZATIONAL EVENT

An advancing body of studies within strategic management has focused on the role of competitive

actions as a mechanism through which corporations can create competitive advantage for themselves

and undermine the competitive advantages of competitors (Chen, 1996; DAveni, 1994; Ferrier et el,

1999; Ferrier, 2001). Most studies on competitive actions and hyper competition has shown the

significance of firm competitive actions for disrupting industry positions and gaining competitive

advantage (Rindova et el., 2010). Rooted in the Austrian view of markets as disequilibrium systems,

research emphasizes that competitive advantage is temporary and dynamic, as it derives from the

streams of competitive actions that firms carry out to disrupt the market positions of competitors and

improve their own (Rindova et el., 2010). Scholars working from this perspective have demonstrated

that the characteristics of firms competitive actions and the responses of their rivals influence

profitability (Chen and Miller, 1994; Miller and Chen, 1994; 1996; Smith et al., 1991; Young et el.,

1996), relative market share (Ferrier, 2001; Ferrier et al., 1999), market value (Bettis and Weeks,

1987; Ferrier and Lee, 2002; Lee et al., 2000), and firm reputation (Basdeo et al., 2006). Research on

hyper competition has similarly argued that firms can seize temporary advantages over rivals through

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aggressive competitive actions characterized by strategic surprise, speed, and simultaneous and

sequential thrusts (DAveni, 1994). Consistent with this view, empirical studies show that a wide

range of established industries have experienced a hypercompetitive shift characterized by a sharp

increase in competitive activity, greater volatility in industry profitability, and higher rates of turnover

in market share leadership (Ferrier et al., 1999; Thomas, 1996; Thomas and DAveni, 2010; Wiggins

and Ruefli, 2005).

CA refers to externally directed, specific, and observable competitive moves to enhance a firms

competitive position (Smith et el., 2001). CA includes diverse competitive moves, such as new

product introduction, marketing, and capacity expansion, reflecting a firms aggressive search for

new ways to satisfy its customers. Based on the Austrian school of economics that views competition

as a dynamic process in which firms continually take actions to outperform each other (Jacobson,

1992; Kirzner, 1973; Schumpeter, 1934) consequently, corporate competitive actions serve as a

dynamic mechanism for firm specific reduction of ambiguity and a good concept that is been

inculcated into management practices. Competitive dynamics refers to the interplay in the series of

initiative and responsive competitive actions among firms in a competitive situation (Smith et al.,

2001). Accordingly, the key unit of observation is an individual competitive action, a discrete,

concrete, and detectable action by a company to enhance or defend its competitive advantage vis-a-

vis its competitors (Chen and Hambrick 1995; Miller and Chen, 1996). New development and

responsive actions by competing companies, initiated at the same time, exhibits the level of

competition that exists in a particular industry. The popular conceptualization of competition in

competitive dynamics has been that initiatives actions directly mount competitive pressure on

competitors, thereby provoking (Chen et al., 1992) or inviting (Chen and Miller, 1994) them to

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respond. The market is seen as a process that provides signals to market participants on what courses

of action to take and from which to refrain (Von Mises, 1949). Accordingly, market prices and

consequent economic calculations by market participants are seen as signals for favorable or

unfavorable courses of action (Foss and Christensen, 2001; von Mises, 1949). In particular, CA

reflects a firms effort to fulfill its economic responsibility because economic responsibility

emphasizes that a firm must bring value to customers by continuously striving to introduce new

products, methods, and initiatives as a business entity (Aupperle et el, 1985). All this literature

reviewed has proven enough that CA has become an organization event. (Kim et el., 2015)

2.4 OVERVIEW AND HISTORY OF THE TELECOMMUNICATION INDUSTRY

2.4.1 Overview

Technically, telecommunications encompasses any communication over a distance, be it via

telephone, television, radio, wireless network, computer network, telemetry, or other means-but

traditionally, the term referred to telephone service. These days, though, all these technologies and

others are converging-indeed, nowadays you can access the Internet, play videos, or track your

children's movements via global positioning system (GPS) technology on your cell phone. So the

lines between telecommunications and other industries like computer hardware and consumer

electronics are getting blurrier all the time. (Dankwah, 2013)

Revolutionarily, telecommunication as an industry has changed significantly over the past two

decades. Monopoly was the order during the period before the 1980s for the industry (Dankwah,

2013). It was very difficult delivering telephone service right into individual household because of the

huge investment needed in infrastructure requirement of the telecommunications industry. According

to Dankwah (2013) the monopolistic nature of the industry also meant that the provider could charge

excessive prices and gain monopoly profits. Therefore, the need for price regulation also became

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apparent. Bandaranayake (2005) studies revealed that, It then became commonplace, all over the

world, to have a monopoly company owned by the state for providing telecommunication services.

Running state owned enterprises comes with a lot of challenges so there was the need to restructure

them Dankwah (2013). A combination of restructuring, privatization and establishing regulatory

mechanisms were adopted in reforming these public enterprises. (Kessides, 2004). The 1980, was

the era of restructuring in USA, where AT & T a monopolistic firm was dissembled into a number of

smaller companies. Competition was introduced into long distance communications and then to local

communications Dankwah (2013). Further, companies were allowed to operate in both broadcast

and communications markets simultaneously. The next country to follow was UK with the opening up

of their market which was the monopoly of British Telecom. Many countries in the European Union

thereafter followed suit (Bressie et al, 2005).

One of the most vibrant generators of revenue for many economies now is the Telecommunication

industry. International Telecommunication Union, (2010) gave an example in a report that, at the end

of 2008, worldwide mobile service revenues stood at USD 912.1 billion; performing better than the

respective revenues generated by the pharmaceutical, IT hardware and semi-conductor sectors.

While software and services generated more revenue than mobile services, mobile surpassed this

sector in terms of year-on-year growth, and was the only industry of the aforementioned five to

register double digit growth (of 17.4 percent) in terms of overall revenue between 2007 and 2008. It

is estimated that by the end of 2008, worldwide mobile subscribers will total 4.6 billion.

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2.4.2 History of Telecommunication

According to International Telecommunication Union (2010), Telecommunication refers to the

specific services that support the exchange of information over significant distances by electronic

means. It includes the activities of providing telecommunications and related service activities (i.e.

transmitting voice, data, text, sound and video). The transmission facilities that carry out these

activities may be based on a single technology or a combination of technologies.

Telecommunication is also communication at a distance by technological means, particularly

through electrical signals or electromagnetic waves Dankwah (2013). The term telecommunications

was first used for wired telephony. Today, telecommunications are one of the most important of the

contemporary ICTs. They include wired and wireless telephony; different mobile services, such as

cellular telephones and paging; voice and data transmission; and Integrated Services Digital

Networks (ISDN), which provide a very high quality of voice as well as high data communication

rates Dankwah (2013). Early telecommunication technologies included visual signals, such as

beacons, smoke signals, semaphore telegraphs, signal flags, and optical heliographs. Other examples

of pre-modern telecommunications include audio messages such as coded drumbeats, lung-blown

horns, and loud whistles. Electrical and electromagnetic telecommunication technologies include

telegraph, telephone, and teleprinter, networks, radio, microwave transmission, fiber optics,

communications satellites and the Internet.

2.4.4 TELECOM SUBSCRIPTIONS FOR APRIL 2016

2.4.4.1 Introduction

This report highlights trends in the telecommunication industry for April 2016 in the countrys

mobile voice subscriptions, fixed telephony, mobile data and Broadband Wireless Access (BWA) that

have occurred during the month under review.

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2.4.4.2 Mobile Voice Subscription for April 2016.

At the end of April 2016, the total number of mobile voice subscribers had increased from 36,138,706

at the end of March 2016 to 36,395,116 as at the end of April 2016. This represents a percentage

increase of 0.71%. The total penetration rate for the month under review was 131.63%.

MTNs voice subscriber figures for the period was 17,192,543, representing a percentage

increase of 1.11% from March 2016s figure of 17,004,445. MTNs market share for the

month under review was 47.24%.

Vodafones mobile voice subscribers increased from 7,900,534 at the end of March 2016 to

7,976,348 as at the end of April 2016. This represents a percentage increase of 0.96%.

Vodafones market share for April 2016 was 21.92%.

Tigos voice subscribers increased from 5,062,304 as at the end of March 2016 to 5,213,398

as at the end of April 2016. This indicates a percentage increase of 2.98%. Their market share

for the month under review was 14.32%.

Airtels voice subscribers decreased from 5,012,239 as at the end of March 2016 to 4,942,197

as at the end of April 2016. This represents a percentage decrease of 1.40%. Their total market

share for the month under review was 13.58%.

Glos voice subscribers decreased from 1,048,635 as at the end of March 2016 to 962,338 at

the end of April 2016. This reflects a percentage decrease of 8.23% for the month. Their total

market share for the month under review was 2.64%.

Expressos voice subscriber figures decreased from 110,549 as at the end of March 2016 to

108,292 as at the end of April 2016. This represents a percentage decrease of 2.04%. Their

total market share for the month under review was 0.30%.

Source: www.nca.org.gh

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2.5 EVOLUTION OF CORPORATE SOCIAL RESPONSIBILITY

Corporate social responsibility as an organizational phenomenon is not one of two, that is to say one

of a kind or new. After all corporate social responsibility in business was not generally think about

seriously to be an important difficulty since Adam Smiths time to the Great Depression (Hopkins,

2004). Over the past decades, corporate responsibility has undergone a momentous growth from a

narrow and often marginalized notion into a complex and multifaceted concept whose importance

extends from business to the theory and practice of law, economics and politics; increasingly

becoming the core of much of todays corporate decision making (Cochran, 2007; Hopkins, 2004).

A lot of studies Cochran (2007), Hopkins (2004) and Rueviius and kien (2011) declared that

corporate social responsibility as a concept came forth as a result of an academic debate between

Columbia professor Adolf A. Berle and Harvard professor E. Merrick Dodd in a series of articles

featured in the Harvard Law Review in the 1930s (Cochran, 2007; Hopkins, 2004). Nevertheless,

Carroll (2008), Abe and Ruanglikhitkul (2013) and Katsoulokos et al. (2004) also confirm from their

studies that the practice of the CSR as concept in business way back in the 1800s. Notwithstanding

the aforesaid assertions, the concept is mostly said to be a product of the twentieth century, especially

in the early 1950s (Carroll, 2008; Sahay and Srivastava, 2008; Barlett and Jones, 2009; Rueviius

and kien, 2011; Khan et al., 2012; Wenzhong et al., 2012). Due to all this misunderstandings on

when corporate social responsibility actually stated, we will then go through some studies that

explains it better from the 1980s to late 1990s.

2.5.5 Evolution of CSR 1980s to 1990s

According to Carroll (2008), the 1980s records the era where a lot of writers and researchers tried to

develop new or refined existing definitions of corporate social responsibility creating the way for

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alternative or complementary concepts and themes such as corporate social responsiveness, corporate

social performance, public policy, business ethics, and stakeholder theory/management just to

mention a few. 1980s was the discovering of Jones (1980) joining Corporate Social Responsibility

conversations some definition Carroll (2008) explain as been an interesting perspective. This

perspective described corporate social responsibility as corporate social responsibility is the notion

that corporations have an obligation to constituent groups in society other than stockholders and

beyond that prescribed by law and union contract. Two facets of this definition are critical. First, the

obligation must be voluntarily adopted; behavior influenced by the coercive forces of law or union

contract is not voluntary. Second, the obligation is a broad one, extending beyond the traditional duty

to shareholders to other societal groups such as customers, employees, suppliers, and neighboring

communities (Jones, 1980 as cited in Carroll, 2008). During the 1990s, there was no major

contribution to corporate social responsibility concept. According to (Carroll, 2008) the prominent

themes which continued to grow and take center stage in the 1990s included the; corporate social

performance (CSP), stakeholder theory, business ethics, sustainability, and corporate citizenship

2.7 RELATIONSHIP BETWEEN CSR AND CFP

An argument rose concerning CSP and CFP relationship by Preston and OBannon (1997) was that,

certain two divisions of matters need to be in mind, a meaningful indicator of the association and the

agency by which an effect of direction is shown. Association may be good, bad or neither good nor

bad. Also any significant variation in Corporate Social Performance may result in a proportionate

significant variation in Corporate Financial Performance and the opposite is true. Agreeing with this

valid inference hold now just as before, almost the same type of division is done here, finished with

some type of theories which is not part of any of these divisions. A detailed review on the

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assumptions and theories that seeks to explain the association among corporate social performance

and corporate financial performance comes with summarized once below.

Table 3.1 EXPLANATIONS OF CSR AND CFP RELATIONSHIP

Direction Theory Brief Explanation

Indicator

positive CSP CFP Instrumental According to Jones (1995), several difference (e.g. proper
stakeholder theory management theory, Waddock & Graves (1997)).
Corporations are more advantageous when they embark
on more CSP through goodwill development from
stakeholders.

positive CSP CFP Management skill Corporate Social Performance is a substitute for
managerial skills which create the opportunity to
compare performance in different areas (e.g. Alexander
and Buchholz, 1978).

positive CSP CFP Stakeholder-agency Monitoring by stakeholders through relationships and

theory, compels managerial decisions to favour broad corporate
goals (Orlitzky et al., 2003).

positive CFP CSP Slack resources Here the assertion is that, resources in financial terms
determines corporate social performance; corporations
who invest in corporate social performance. (Waddock
and Graves, 1997).

positive CSP CFP Virtuous cycle Waddock and Graves (1997) argue that CSP and CFP
CFP CSP relationship intertwine such that one leads to the other
(that is Good management theory and slack resources
theory combined together).

negative CSP CFP Trade-off theory This theory is with the assertion that companies need to
decide if they will like to invest in CSR or not because if
a company decides to embark on CSR, then they are at
competitive disadvantage as compared to those who does
not (Friedman, 1970; McGuire et al., 1988).
- negative CFP CSP Managerial Corporate managers whose visions are of short-term are
opportunism likely to benefit for themselves through pay plans when
hypothesis doing well and those doing badly will intend to push that
into or blame it on CSR activities. (OBannon & Preston,
1997).
CSP CFP Negative synergy OBannon and Preston (1997) proposes that, it is highly
negative CFP CSP possible CSP has a negative relationship with CFP.

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Other Inverted U The assertion in this theory is that, CSR investment has
an optimal level from which when it deviates from causes
lower CFP (Salzmann, 2005; Barnett and Salomon,
2006).
Source: wissink (2012)

2.8 THEORETICAL FRAMEWORK AND HYPOTHESES DEVELOPMENT

2.8.1 Integration of CSR and CA

Out of the literature already reviewed, I came out with an argument that both CSR and CA can help

corporations improve their competitive position in a particular industry in which they operate.

Corporate Social Responsibility is a wilful business act designed to create benefits for diverse

stakeholders, including shareholders (Carroll & Shabana, 2010; Mackey et al., 2007). As a result, any

corporation who decides to fully involve in addressing environment issues, human rights concerns,

community development, and employee welfare can be regarded Social Responsibility Corporation.

Recently, corporation increasingly embarks on Corporate Social Responsibility for different groups

of stakeholders. Nearly 90% of Fortune 500 companies have developed explicit Corporate Social

Responsibility initiatives (Lichtenstein et el., 2004). Differentiation of a firm from its competitors can

be done by actively engaging in CSR activities and that will help enforce its competitive position

(Hull & Rothenberg, 2008; McWilliams & Siegel, 2001, 2010). RBV creates understandings that, a

corporation Corporate Social Responsibility help develop a good name or reputation of the

organization and are worthy, lightly, and matchless activities that can boast an organisation

competitive edge (Russo & Fouts, 1997; McWilliams & Siegel, 2010). Because of the good

reputation, good relationships will be created among various stakeholders and that helps organization

to earn individual stakeholders support and that becomes an important resource that boasts corporate

competitive edge (Jones, 1995).

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Based on these arguments, findings from current studies all agree to the fact that there exist a positive

relationship between CSR and CFP. A meta-analysis of 52 studies by Orlitzky et el., (2003) found a

positive impact of CSR on CFP. Furthermore, after reviewing 127 empirical researches, Margolis and

Walsh (2003) finalized that there exist a positive association between CSR and CFP. Clearly speaking

both corporations and society can benefit when firms embark in behaviour intended to do more than

maximize shareholder wealth. This observation is supported by decades of empirical research. The

majority of the articles support a positive, causal relationship; where corporate social performance

(CSP) is a determinant of corporate financial performance (CFP) (Margolis and Walsh 2003; Pava

and Krausz 1996). As studies keep on digging into the kind of association that exist between CFP and

CSP, methodological issues arose making it more complex. The sophisticated relationships between

these multi-dimensional constructs are beginning to be revealed. Hence, researchers have identified a

number of variables believed to impact how a firms social performance relates to its financial

performance. Researchers have analyzed this association by exploring contingencies that underlie

the mechanisms through which CSR leads to CFP (Bansal, 2003; Godfrey, Merrill, & Hansen, 2009;

Wang & Qian, 2011).

Competitive actions is made up of various types of competitive moves (e.g., product introduction,

capacity expansion, marketing campaigns, and sales) embarked on to raise up a firms competitive

position, which in turn contributes to CFP (Derfus et el., 2008; Kim & Tsai, 2012). As disequilibrium

as market is, active and incessant Competitive Actions shows that a corporation is committed to

aggressively appeal to the market and its customers. Inclusively, more Competitive Action reflects a

corporations commitment to bettering product quality and competitive aggressiveness (Basdeo et

el., 2006).

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Based on the previous literature, it is clear that Competitive Action is an important contingency that

needs special concern in examining the Corporate Social Responsibility-Corporate Financial

Performance (CSR-CFP) link the reason been that both Competitive Action and Corporate Social

Responsibility are important actions for a firm that not only strengthen its competitive positions but

also help a firm fulfill its economic and ethical responsibilities (kim et el., 2011). Economic

responsibility of a firm is to produce goods and services to society at a profit, which the firm is

required to fulfill (Carroll, 1979). Business has an obligation to be productive and profitable and

meet the consumer needs of a society that is the argument raised by Aupperle et al. (1985). Meaning

Competitive Action is an important means to meet a corporations economic responsibility by

satisfying consumer needs through diverse and continuous competitive moves (kim et el., 2011).

According to Carroll (1979); Carroll & Shabana (2010) ethical responsibility of a firm is to promote

social goals beyond the corporate immediate financial interests, which the firm is expected to fulfill.

Given that Corporate Social Responsibility is a willful corporate action that improves community

wellbeing, CSR embodies ethical responsibility. Ethical and economic responsibilities

simultaneously exist as components of the broad definition of social responsibility; they are neither

mutually exclusive nor opposing but overlapping (Carroll, 1979). In most cases, Corporate Social

Responsibilty actions designed to meet ethical responsibility often help fulfill economic responsibility

by differentiating a firm from its rivals (Jones, 1995). Aupperle et al. (1985) found that economic

and ethical responsibilities are conceptually independent but empirically interrelated. Likewise,

Schwartz and Carroll (2003) stated clearly that ethical and economic responsibilities are

encompassing to some extent. It is clear now that, both CA and CSR strengthen a corporations

competitive position when it embarks on economic and ethical responsibilities respectively.

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Consequently, undertaking CSR alone is likely to result in insufficient understanding of CSR effect

on CFP. Therefore, investigating CSR effect in relation to CA is important to elucidate the

complicated relationship underlying CSR effect on CFP.

2.8.2 PCSR, NCSR, and CFP

Based on concepts, Negative CSR and Positive CSR are different, and among all the other means that

previous researchers try to understand the complex CSR-CFP relationship is to break down CSR into

Positive CSR and Negative CSR. Conceptually, PCSR actions are meant to ensure the welfare of

diverse stakeholders, whereas NCSR actions may potentially harm the interests of stakeholders

(Kotchen & Moon, 2011). NCSR and PCSR are not directly opposite to each other; it should be noted

that not embarking on PCSR does not necessary mean that the firm is engaging NCSR. Example is,

violence against employees is irresponsible, but the absence of violence is not necessarily

responsible; it should be the status quo (Strike et al., 2006: 851). That is to say that, it highly possible

for firms to simultaneously engage in both PCSR and NCSR. Corporations with high NCSR tend to

embark more actively in PCSR to cover up their NCSR (Kotchen and Moon, 2011). Furthermore,

evaluation of PCSR and NCSR is not equal because cognitive responses to positive and negative

events differ (Lange & Washburn, 2012). That is, Positive CSR and Negative CSR are conceptually

different phenomena with different performance implications for a firm (Muller & Kraussl, 2011).

Positive CSR is always viewed as a differentiation strategy to help firms achieve competitive

positions in the market (Hull & Rothenberg, 2008; Klein & Dawar, 2004). According to Koh et el.,

(2014) Positive CSR increases firm reputation and stakeholder support, which directly add to firm

value and shareholder wealth. Literature in the past have argued that, firms reputation earn from

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engaging in (PCSR) activities may build a favorable relationship among diverse stakeholders (kim et

el., 2011). In effect, this facilitates more support from stakeholders in the form of considerable

consumer support (Lev, Petrovits, & Radhakrishnan, 2010; Sen & Bhattacharya, 2001), high

employee commitment (Greening & Turban, 2000), high level of legitimacy from the community

(Fombrun et el., 2000), and even better governmental relations (Campbell, 2007; Wang & Qian,

2011). Also, Positive CSR in a way is an insurance value to a firm in the sense that positive moral

capital gained from PCSR can mitigate the risk of shareholder value loss when a firm encounters

negative events (Fombrun et al., 2000; Godfrey, 2005; Koh et al., 2014; Schnietz & Epstein, 2005).

According to the RBV, good reputation and support from various stakeholders are valuable

resources that PCSR can bring to a firm, which in turn improve a firms competitive position

(McWillams & Siegel, 2010; Russo & Fouts, 1997). Consequently, I then anticipate that, PCSR

impact on CFP is positive.

Hypothesis 1a: A positive relationship exists between PCSR and CFP.

Differently, as a socially objectionable action, Negative CSR may have a negative relationship with a

corporations financial performance because it can sabotage corporate reputation and destroys

relationships with various stakeholders (kim et el., 2011). According to Barnett & Salomon (2006)

Negative CSR in particularly, risks consumer disfavor, protests by activist groups, and negative

media coverage. In simple understanding, engagement in NCSR activities increase dissatisfaction

among diverse stakeholder groups (kim et el., 2011). As a result, Negative CSR results in a general

degradation of a firms reputation. For example, Amujo et el., (2012) found that a multinational

corporations irresponsible activities, such as environmental pollution, tax evasion, and contract

scandals, substantially detract from a firms reputation and ultimately harm its performance. Also

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apart from the reduction in reputation, Kotchen & Moon (2011) make we understand that, Negative

CSR is likely to harm stakeholder relationships because it is a bad deed of a firm that reduces

stakeholder value. (Barnett & Salomon, 2006; Dowell et el., 2000) explained that, Destroyed

relationship with all the various group of stakeholders prevents effective resource acquisition from

them and, subsequently, could reduce firm performance. Other researchers also found that, Mutual

funds that use a larger number of screens against irresponsible social behaviors show superior

financial performance (Barnett and Salomon, 2006). Also, Muller and Kraussl (2011) based on their

studies found out that during the aftermath of Hurricane Katrina; socially Irresponsible

Corporations experienced a great fall in their stock prices. Consequently, I strongly believe that

corporate performance will fall as the corporations embark on Negative CSR activities.

Hypothesis 1b: A negative relationship exists between NCSR and CFP.

2.8.3 Interaction Effects between PCSR and CA on CFP

I foretell that Competitive Action (CA) moderate PCSR and CFP association positively because a

firm, as a business entity, should simultaneously fulfill its economic and social responsibilities

(Aupperle et al., 1985; Carroll, 1979). Explanations by (Mohr et el., 2001) is that, a firm fulfilling its

economic responsibility is an important criterion for the evaluation of a firm, because the general

public pays particular attention to a firms economic responsibility by focusing on whether a firm is

able to provide goods or services that satisfy the needs of the public. Meaning Competitive Actions,

which reflects a firms economic responsibility, becomes an important condition that complements

the effect of PCSR as an action mainly for its ethical responsibility (Tuzzolino & Armandi, 1981).

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Apparently, when the level of Competitive Action is low, Positive CSR may look unwanted and a

labored behavior that hinders effective resource acquisition from diverse stakeholders; without

fulfilling its economic responsibility, stakeholders are less likely to appreciate the social behaviors of

a firm and thus are less likely to offer their support to a firm (Wang & Qian, 2011). In a case of this

nature, Positive CSR can be thought of as a trade-off, making up for the lack of economic

responsibility, and thus such PCSR would be less favorably accepted by stakeholders (Luo &

Bhattacharya, 2009; Sen & Bhattacharya, 2001). Customers are likely to think of Positive CSR

activities by firms with low Competitive Action (CA) as taking advantage and harm the good

reputation, possibly causing PCSR to backfire (Grandey et el., 2005). For instance, Sen and

Bhattacharya (2001) in their studies came out that, CSR efforts could harm the reputation of a

corporation if such CSR is realized at the expense of developing corporate capabilities, such as

product quality and innovation. In the same way, Luo and Bhattacharya (2006) argued that CSR

initiatives fail to generate a favorable impact if the firm is perceived as less innovative and as

offering poor quality products. Meanwhile, when a firm actively engages in CA, simultaneous

engagement in PCSR will help such a firm to gain diverse supports from various stakeholders, such

as employees, customers, and suppliers (Godfrey, 2005). When it happens this way, Positive CSR is

now seen as a necessary step for the corporation to take and also is thought of as a sincere manner.

As a result, Competitive Action (CA) could complement PCSR effect by making stakeholders react

more positively to such PCSR (kim et el., 2011). Previous researchers also found that the general

public responds favorably to PCSR, given parity in price and quality (Cone Communications, 1999).

In short, resource acquisition from different stakeholders through Positive CSR is more effective

when Competitive Action is high, leading to better financial performance when a firm has

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simultaneously fulfilled its economic and ethical responsibilities through CA and PCSR. Therefore,

we present the following hypothesis:

Hypothesis 2: The relationship between PCSR and CFP is moderated by a firms level of CA, such

that the positive relationship between PCSR and CFP is stronger when the level of CA is higher.

2.8.4 Interaction Effects between NCSR and CA on CFP

In the same way, NCSR impact on CFP also depends on the firms level of CA. Particularly, I believe

that the negative effect of CA on CFP will be worsening with NCSR due to some reasons. The

destroying of corporate image or reputation is one of the initial damage NCSR brings to a firm and

destroys the relationship with various stakeholders. Disadvantages of such nature will even be worse

if the level of CA is high. When CA increases, it means the company is actively trying to fulfill its

economic responsibility (kim et el., 2011). as a result, this corporation is expected to simultaneously

engage in actions to achieve its ethical responsibility (Aupperle et al., 1985; Carroll, 1979). When it

happens this way, Negative CSR is an action that deviates from stakeholders expectation, thereby

critically degrading the firms reputation and image (kim et el., 2011). Most researchers have argued

that when certain expectations exist, disconfirmation of these expectations leads to disappointment,

which in turn leads to negative impacts on the actor who fails to meet the expectations (Zeelenberg et

el., 2000). For instance, Zeelenberg and Pieters (2004) showed that when a firm disappoints

customers and fails to meet their expectations, customers tend to be dissatisfied, complain, and even

stop purchasing the firms products. This means that, if a company seriously embarks of CA, NCSR

destroys the image or reputation the more and even blocks helps from stakeholders by not meeting

their expectation. Another reason to is that, any firm who actively embark on CA, its public exposure

also increases (Basdeo et al., 2006) this leads to stakeholders intensifying their thought about the

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firm. Such a firms NCSR is more readily identified than that of other firms with less exposure to the

public, as the public normally places higher scrutiny on more visible firms. Therefore, the reputation

damage experienced by a firm because of NCSR would be more significant when the level of CA is

high, which amplifies the negative effects of NCSR on CFP (kim et el., 2011)

Looked at differently, if the level of CA is low, the impact that a firms NCSR would have on CFP

will be less negative. According to (Mani & Wheeler, 1998; Strike et al., 2006; Tang et el., 2015)

although NCSR causes damages to firm image and firm-stakeholder relationship, it is possible for

such actions to save cost which may create value for the firm. Kotchen and Moon (2011) stated that

firms engage in NCSR in order to take advantage of profitable opportunities or to avoid higher costs.

Saving cost is another seen as an additional way to increase CFP (Porter, 1980; Li et al., 2009) and

help fulfill a firms economic responsibility. As a result, if the level of CA is low, engagement is

NCSR helps firms to reduce the price of its product and also its production. For instance, using

unrefined oil in a plant which is less expensive to run than refined oil and at the end increase profit

but pollute the environment. However, a corporation with a low level of Competitive Action is less

exposed to the public. This means that, NCSR might be less noticed by various stakeholders if CA is

low. Said differently, NCSR may cause less damage to firms image when CA is low, due to the fact

that the evil doings of the firms will be less seen by stakeholders. Also, in case like this, a firm may

be able to mislead or manipulate customers via NCSR (kim et el., 2011). If customers do not know

much about the firm or the product, then the firm can easily exploit them by providing inaccurate

information. Given that a firm with a low level of CA is less exposed to the public and information on

the firm is limited, NCSR is less salient and may be used to manipulate customers. Thus, NCSRs

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effect on CFP would be less negative under a low level of CA. Consequently, we propose the

following hypothesis:

Hypothesis 3: The relationship between NCSR and CFP is moderated by a firms level of CA, such

that the negative relationship between NCSR and CFP is stronger when the level of CA is higher.

2.9 EMPIRICAL FINDINGS

All the theories and the literatures reviewed are subject to empirical testing in many researches. Out

of testing done by Peloza (2009) he found out that 59% of 128 studies reviewed found positive, 27%

mixed or neutral, and 14% negative relationships. Also a review by Aguinis and Glavas (2012) also

found that a small but positive relationship exists between CSR and financial outcomes. Analysis of

this kind of study through the combination of results of diverse statistical studies, Margolis et al.

(2007) finalized in their studies that there is a minimal, certainty of relationship among Corporate

Social Performance, competitive actions and Corporate Financial Performance, a combination of

result of diverse statistical studies in the past (Orlitzky et al. 2003; Margolis and Walsh, 2003).

According to Margolis et al. (2007) critical evaluation of studies involved researches that meet two

separate requirements that is Corporate Social Performance and Corporate Financial Performance

were evaluated on level of organisation bases after which an outcome of a cause for the relationship

between Corporate Social Performance and Corporate Financial Performance were brought out. As a

result of specifications and an intensive analysis of past studies, 167 researches were discovered. As

made know in the past, inside the body of past studies several indicators of Corporate Social

Performance were used. In this combination of results of diverse statistical studies, these indexes

were put into individual categories of Corporate social performance (generous contributions,

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company policies, environmental performance, revealed misdeeds and transparency) and broad

appraisals (self-reported social performance, observers perceptions, third-party audits, and screened

mutual funds). Analyzed results conducted was tailored toward finding a relationship which may be

positive between corporate social performance and corporate financial performance (given an OAE of

r = 0.132). Although the result is statistically significant, it is small. Based on their results Margolis

et al., (2007) finalized that corporate social performance financial effect is, at the minimum, neutral.

The finalization disconfirms theories that stand for negative association (e.g. Friedman, 1970). Out of

the many analysed researches about negative relationships, its just two percent that confirms it. In

spite of that, the little percentage that confirms it point out that, even though corporate social

performance causes no harm on CFP, it does not benefit CFP also.

Based on studies conducted by Orlitzky et al. (2005) they found out that up to that point of his

research he has similar conclusion. They affirm also that corporate financial performance and

corporate social performance has no trade-off between them. This assertion is due to the association

the find between CSP and subsequent CFP (r =0.288), CFP and subsequent CSP (r = 0.294), and

CSP and CFP measured in the same period (r = 0.440). The instrumental stakeholder theory got a

lot of attention in the researchers conducted. According to Orlitzky et al. (2005) empirical results

from studies that combines instrumental stakeholder theory and slack resources theory is of most

interest; the theoretical framework of this research is based on these two theories that, together, form

a virtuous cycle.

According to Waddock and Graves (1997), the discovering of the first testable fact of the virtuous

cycle of CSR, based on their study, CSP was statistically significantly in relation to subsequent CFP

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and CFP was also statistically significantly in relation to CSP. Relating to this same evidence, the

researchers came out with the assertion that corporate social performance may influence corporate

financial performance or said differently. Surroca et al. (2010) in their studies expressed at length on

the virtuous cycle forth put by (Waddock and Graves, 1997) with the RBV. Other researchers think

that assets which cant be felt or touched moderate the relationship between CSP and CFP, and vice

versa. The researchers empirical analysis agrees with the assertion that, a proportionate change in

one variable will result in a proportionate change in the other. That is to say if new assets which cant

be felt or touched are developed. Their results also affirm significantly the virtuous cycle proposition.

Although numerous empirical studies support the positive relationship between CSR and CFP, some

inconsistencies in the findings indicate that this relationship may be more complex than a direct

causal relationship (Hull & Rothenberg, 2008; Margolis & Walsh, 2003). Therefore there is the need

to bring in another variable (a contingency in this case competitive action CA) to help elucidate this

complex relationship in the form of moderation.

2.10 CHALLENGES OF CORPORATE SOCIAL RESPONSIBILITY

Structuring a CSR policy and actually putting it into action plans indeed need a great dedication and

vision from corporate managers, posing a major challenge to organizations (Faulkner, 1995).

According to a study conducted by Euromonitor, (2006); World Bank (2007) states that, most of the

people in the world are low income earners and that makes it hard for society to sufficiently assist

corporation that embark on CSR activities since they spend a lot of their income on food. Another

researcher (Baughn et al., 2007) also believes that, actually putting CSR plans into action can be very

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hard because of the various need of society. Some of the challenges are not been able to engage Key

Stakeholders, Lack of requisite Skills carryout CSR etc.

2.11 BENEFITS OF CSR

Organization who embark on CSR activates always try to find a way to publicly make society away

because of the benefits they foresee to derive from improve public relation. Managers dont only make

society aware of it but also make their shareholders aware of the achievement made from embarking on

CSR activities. A researcher confirmed that Most research present theoretical models which do not

consider empirical evidence and beside that the regression mode used fail to test for nonlinearity between

financial performance and corporate social performance (Callan and Thomas, 2009). Benefits that

accrue when an organization embark on CSR has been researched on by many authors. (some are Sun

and Yuan, 2010; Green Capital and CSR Sydney, 2008; Jones et al., 2006; Morsing and Schultz,

2006; Welford and Frost, 2006; Dawkins, 2004; Leonard and McAdam, 2003). The benefits were

found to be both financial and non-financial (Green Capital and CSR Sydney, 2008). For that matter,

Corporate Social Responsibility is becoming increasingly more important in the corporate business

world (Leonard and McAdam, 2003). Benefits from CSR can be seen from two different

perspectives: internal and external, that is to say the corporate business world enjoys certain benefits

(internal) when engaged in CSR, likewise the society or environment or the public (external benefits)

(Gamah, 2014). Some of the benefits are listed below.

Enhance Brand Image, Allurement of good and quality staff, Competitive Advantage, Increase in

staff loyalty, reduced regulatory oversight etc.

2.12 CONCLUSION

This chapter reviewed literature on the CSR concept as an organizational event, CA as an

organizational event, history, evolution of CSR, relationship between CSR and CFP and goes on with

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the theoretical framework and hypothesis development, empirical findings, challenges of CSR and

finally ended with the benefit that accrue to CSR engagement. Most of the literature reviewed about

CSR and CFP relationship confirmed a positive association but most of the finding could not actually

explain the relationship that exist between the two variable so there is a need for a more clearer means

by which this complex relationship can be explain.

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 CHAPTER THREE

METHODOLOGY

3.1 Introduction

The study will be embarked upon due to the fact that observations has proven that CA and CSR has

gain value currently and there is the increasing argument that they are been integrated in the core

business in telecommunication. In order to achieve the research aim and objectives, this chapter

presents the research design or approach to be adopted, the study population and the sampling

techniques that will be use as well as the source, procedure and the statistical tool adopted for the data

collection are also discussed in this chapter and finally ended with the Techniques for Data Analysis

which include the measures to be used in this research.

3.2 Research Design/Approach

According to Malhotra (1996) a study design is a framework for conducting marketing research. It is

believe by Kinnear & Taylor (1996) that a result oriented research design will make sure of the

consistency of the information gathered to help meet the purpose of the research and the process

concerning data gathering is accurate and efficient. There are three main types of research strategies

adopted in business research thus quantitative, qualitative, and triangulation. Choosing a particular

strategy depends on the purpose of the study, the type, as well as availability of information for the

research (Naoum, 1998 cited from Baiden, 2006). These three strategies have their own benefits but

just that the triangulation encompasses the quantitative and qualitative put together. Triangulation

method will be use for the research since it encompasses the two techniques. The quantitative method

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will be use to make it easy for conversion of information obtained into statistical models for general

analyses to be made and the research questions to be answered base on the statistical models and the

qualitative method also was chosen to be used for in-depth information.

3.3 Study Population and Sampling Techniques

According to Taylor-Powell (1998) Population in simple terms is a group or units of interest located

in a geographic area of interest during the time of interest. The research is to focus on the six telecom

companies in Ghana. This industry was chosen for two main reasons. Firstly, companies mostly in

this industry embark on CA actively to outperform their rivals, because the industry is characterized

by fierce competition (Gardner, 2005; Young et el., 2000). Secondly, firms taking high-level risks

may benefit from CSR because firm reputation, a valuable resource gained from CSR, can mitigate

the potential damage from risks (Koh et al., 2014; Williams & Barrett, 2000).

The departments to be studied in these companies are the sustainability/CSR department, research

and development (R & D), marketing and the financed department. This department were chosen

because it is believed that the sustainability/CSR department knows better about CSR benefit to their

organization, also the R & D department do research about the existing products and services of the

companies to see if they are lapses or how to develop new product/services and give out information

to the companies to help make informed decisions about how to improve on their products and

consequently resulting in competitive action (CA), the marketing department to was chosen because

after the researches are done and the finding presented to the company, any decision or plan taken are

been narrowed down to the marketing department to implement, the finance department also finally

account on the general operation of the company and are the best to tell if really an expenses made on

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CSR and improving on competitive actions (CA) really can have an impact on the financial

performance of the company.

3.3.1 Sample and sampling technique

Sample simply means using a small porting of a population to represent whole. Any information

gathered from the sample is only useful in generalizing the population from which the sample was

taken (Taylor-Powell, 1998). Nevertheless, sampling must be guided by certain factors like

population size, information needed and the resources available. Yet still Taylor-Powell (1998)

argued that sampling may not be necessary if the population is small. Sampling is not so necessary in

this research due to the small size of the population under study. Even though sampling was not

necessary, nonetheless purposive sampling will be used to determine those to partake in the survey.

Accordingly, the whole population i.e. the sustainability/CSR department, the research and

development (R & D), marketing and the financed department were targeted, which means that those

to be engaged in every company will be decided based on purpose. Purposive Sampling is a sampling

technique whereby the researcher decides who to be engaged in the research. These departments were

chosen because they will help in getting an rich informations that are important to the study and also

focus on specifics rather than general (Tuuli et al., 2007; Taylor-Powell, 1998). Therefore their inputs

are essential in the determination of the extent of CSR and CA engagement in the Ghanaian telecom

industry. CSR activities are likely to play a major role in the telecommunication industry considering

the fact their product and services are consumed by humans. Thus, both CA and CSR are equally

important to business operations in the telecom industry.

3.4 Source, Procedure and Tools for Data Collection

3.4.1 Sources:

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Both primary (field survey) and secondary (literature review) data will be employed in this research.

The primary and secondary data will be collected to cover every aspect of the research. According to

Neville (2007) research should contain empirical research data. Meaning primary data are very

important in conducting a reliable research. The primary data sources in this research include

telecommunication industry. Data regarding PCSR and NCSR will be collected from

sustainability/CSR department, R&D, marketing and secondary information from the financial

statement, TV, radio, news papers and magazines.

3.4.2 Tools and procedure for data collection

Tools for data collection will be questionnaire and through interview. Firstly I will revisit the research

objectives and determined what information needed to collect data on. I will use the SERVQUAL 5

dimensions (Tangibles, Reliability, Responsiveness, Assurance, and Empathy) which will be into

statements. I will represented these dimensions with technical support, access, quality, delivery,

product quality, competitiveness and responsiveness which will be directed to measure effect of CSR

on CFP looking at it from competitive action perspective. These dimensions are in line with the

technical quality dimension proposed by Gronroos, (1982) which could be used to measure service

industries like the telecom companies under study. The questionnaire in question will be a semi-

structured questionnaire. This questionnaire will be discussed with the supervisor and then tested.

Few questions will be left open for study respondents to fill; the rest of the questionnaire will have

pre-determined answers from which respondents will have to choose from. Majority of the questions

will be closed- ended and multiple-choice making the results of the questions easy to compare,

tabulate and analyze easier. In these questions to I will use 5-point Likert-scale where the respondents

are asked to select the most appropriate number that correspondents to extent to which they agree

Page 40 of 72
with a question. Example is a scale question which has answers 1 to 5 with 1 denoting excellent

and 5 denoting very poor. As stipulated by the SERVQUAL model, the statements are divided

into three parts; the first part was the demographic part that provides general information about

respondents on gender and number of years the respondent has been in his/her company. This is to

enable us get a better understanding of the type respondents and relate it to how they perceive CSR

effect on CFP when competitive action is introduced. The second part seeks to measure the effect of

CSR on CFP when competitive action is introduce as a contingency and the third part seeks to

measure if really it transform their financial performance.

Kahn and Cannel (1957) described interview as a focused conversation between two or more people.

According to Saunders et al. (2009) interview can broadly be put into: structured interviews, semi-

structured interview and unstructured interview. Structured interview employs standardized questions

to elicit responses from the interviewee. With semi-structured interview, the interviewer uses a

catalog of questions to guide the interview process but is however, not constrained by those

questions. Unstructured interview is an informal conversation between the interviewer and the

interviewee in which the interviewer determines the direction of the conversation. Interview is

another data collection techniques that I intend to use. It will complement the questionnaire, but at the

same time made it possible for me to probe further into the responses given in the questionnaires

especially given the importance of the research and the specialized nature of subject under study. This

data collection instrument is a one on one conventional meeting with the respondent with the aim of

bringing out vital information needed for the study. Interview tends to supplement questionnaire as it

may be used to follow up certain respondents to questionnaires (McNamara, 1999). Semi-structured

interview will be use to bring out relevant data from the targeted populations of the companies on

issues pertaining to the CSR, CA, and CFP respectively.

Page 41 of 72
3.5 Techniques/model for Data Analysis

Quantitative and qualitative techniques of data analysis will be used to analyze the data collected. The

collected quantitative data will be coded into computer program, using Microsoft Excel and

Statistical Package for Social Scientist (SPSS) for easy analysis and interpretation of results into

charts and diagrams. SPSS may obviously not be the best but its user friendly nature and the mastery

of it will make the program automatically better. To achieve the objective of this study, that is to

examine the effect of CSR on CFP when competitive action (CA) in use as a contingency in

telecommunication industry in Ghana, Tobins Q model will be use to analyze the data since

moderating model are used to model dichotomous or binary outcome variables. The data will be

analyzes using both statistical and content. Content analysis is use to explain the qualitative data

collected from interview and the opened-ended questions in the form of comprehensive statements.

Content analysis is a technique that can be used to analyze both qualitative and quantitative data in an

inductive or deductive approach. Inductive approach will be used to analyze the qualitative data at the

preliminary stage. Deductive content analysis is also utilized when the structure of analysis is based

on earlier literature (Kyngas &Vanhanen, 1999). As a result of this, deductive approach moves from

the general to the specific (Burns & Grove, 2005). The deductive approach to qualitative data analysis

was later used. Codes were developed to represent the recognized themes in relation to the raw data.

Measures

Dependent variable: Tobins Q. Tobins Q is the ratio of the sum of the market value of the firm

and the book value of its debt to its total assets (e.g., Chung & Pruitt, 1995). Thus, this measure

captures the firms growth potential and profit sustainability (Luo & Bhattacharya, 2006).

Independent variables: PCSR and NCSR. PCSR and NCSR data is expected to be obtained from

the sustainability/CSR department of the telecom companys engagement along four social

Page 42 of 72
dimensions, namely, community, diversity, employee relations and environment.

Moderator: CA. CA refers to any newsworthy move, such as marketing, new product introduction,

and capacity increase, initiated by a firm to reinforce its competitive position within the industry

(Smith etal., 2001; Young, Smith, & Grimm, 1996). CA is likely to be reported in the press, given

that it is visible to customers, competitors, and other stake-holders. Thus, information on CA will be

identified and obtained from publicly available news sources and their financial statement.

Model and Estimation Method

The model to predict Tobins Q as a function of the variables and which will be use to test the

proposed hypotheses is given below.

Tobins Qit+1 = + 1PCSRit + 2NCSRit + 3PCSRit CAit + 4NCSRit CAit + 5CAit +

10Firm sizeit + 11Firm ageit + 12Return on assetsit + 13Leverageit + 14Liquidityit + it+1,

where i indicates a firm, t indicates a year; Tobins Q is the financial performance metric, CA is the

total number of CAs, PCSR is the total PCSR score, NCSR is the total NCSR score, and it+1 ~

i.i.d.N(0, 2). The coefficients: 2, 3, and 4 as zero will be use to test Hypothesis 1a and

coefficients 1, 3, and 4 as zero to test Hypothesis 1b.

Page 43 of 72
 CHAPTER FOUR

DATA PRESENTATION, ANALYSIS AND DISCUSSION OF FINDINGS

4.0 Introduction

This chapter present data and analysis and discussion of findings obtained from the survey carried out

on the four telecom companies in Ghana (MTN, VODAFONE, TIGO AND AIRTEL) in relation to

the research questions, tables and chart will be used for better presentation of the results.

4.1 Main Survey (Quantitative analysis)

The chapter is sub-divided into two parts. The first part dealing with the general information on the

companys engagement in CSR and CA activities whiles second part deals with the empirical results

in answering the three research questions and testing hypothesis.

4. 2 General Information on companys

The study used a purposive sampling method with a sample size of 32 out of the 230 population size

{N= [230/1 + (230) (0.05)2} = 32. The results are computed and the various number of scores

obtained are shown in respect to the question and answers provided by the thirty two (32)

respondents. The table 4.1 as shown below captures the data obtained from the respondents through

the questionnaires which were administered.

TABLE 4.1 AWARE OF CSR TERMINOLOGY ANSWER

YES 27 1
NO 5 2

FIG. 4.1

Page 44 of 72
 AWARE OF CSR AS A TERMINOLOGY

NO
16%

YES
84%

Source: Field work, 2016

The first question seeks to know about the respondent awareness of CSR as a terminology, the results

from table 4.1 and Figure 4.1 indicates that twenty seven of the respondents are aware of the

terminology whiles five are not.

TABLE 4.2 AWARE OF CA AS A TERMINOLOGY

YES 18 1
NO 14 2

FIG. 4.2

Page 45 of 72
 AWARE OF CA AS A TERMINOLOGY

NO
44%

YES
56%

Source: Field work, 2016

The second question seeks to know if respondents are aware of CA as a terminology, the results from

table 4.2 and Figure 4.2 indicates that eighteen of the respondents are aware of CA as a terminology

and fourteen are not.

TABLE 4.3 CSR WORKING POLICY

YES 28 1
NO 4 2

FIG.4.3

Page 46 of 72
 CSR WORKING POLICY

NO
13%

YES
87%

Source: Field work, 2016

The third question seeks to know if there are existing CSR policies in the companies understudy. The

results from table 4.4 and Figure 4.4 show that twenty eight of the respondents confirm there is CSR

policy in their companys whiles four of them responded no.

TABLE 4.4

TYPE OF RESOURCE
MONEY 8 1
IN KIND 14 2
VOLUNTEERS 9 3
LOANS 0 4
OTHERS 0 5

Page 47 of 72
 FIG.4.5

TYPE OF RESOURCE

14
12
10
8
6
4
2
0
MONEY IN KIND VOLUNTEERS LOANS OTHERS

Source: Field work, 2016

This question seeks to know about the kind of support given out by the companies, the results from

table 4.5 and Figure 4.5 confirm that firms understudy invest in CSR in their companies, fourteen of

the respondent confirms investment IN KIND, eight of the respondent confirms investment in CSR in

the form of MONEY and nine respondent also confirms investment in VOLUNTEERS but no CSR in

the form of LOAN or OTHERS were done.

TABLE 4.5 AWARD OF CSR BY COMPANY

YES 30 1
NO 2 2

FIG.4.6

Page 48 of 72
 AWARD OF CSR BY COMPANY

NO
6%

YES
94%

Source: Field work, 2016

This question seeks to know if their companys award for CSR, the results from table 4.6 and Figure

4.6 shows that thirty of the respondent confirmed that their companies award for CSR while two have

not.

TABLE 4.6 PERCENTAGE OF NET PROFIT

NOT DISCLOSED 19 1
BTN 1%-2% 9 2
BTN 2%-3% 2 3
MORE THAN 3% 0 4
FIG.4.7

PERCENTAGE OF NET PROFIT

20

15

10

0
NOT DISCLOSED BTN 1%-2% BTN 2%-3% MORE THAN 3%

Page 49 of 72
Source: Field work, 2016

This question seeks to know the percentage of profit that is awarded for CSR, results from table 7 and

Figure 4.7 show that nineteen of the respondents confirms their companies does not disclose the

percentage awarded, nine of them confirmed their companies award between 1% to 2% and two

respondent confirmed CSR awards between 2% to 3% but none more than 3%.

TABLE 4.7 CSR EVALUATION

YES 14 1
NO 18 2

FIG.4.8

CSR EVALUATION

44%

56% YES
NO

Source: Field work, 2016

This question also seeks to know whether companies evaluate CSR activities, results from table 4.8

and Figure 4.8 shows that, fourteen confirmed they do but eighteen confirmed they dont.

4.3EMPERICAL RESULT ANALYSIS

4.3.1 Result Analysis

The final dataset was made up of panel data of 24 year based observations of the four

telecommunication companies in Ghana. A primary data set was prepared which has the CSR

Page 50 of 72
dimension listed on them with years from 2010 to 2015, asking them to tick as appropriate the PCSR

and NCSR activities embarked upon and also CA dimensions also having the years from 2010 to

2015 which respondent are supposed to tick as appropriate the once they have embarked on over the

six years of operation in Ghana.

Table 4.8 summarizes the descriptive statistics of all the variables in our model. Positive CSR,

Negative CSR and competitive actions data was collected primarily through the use of a

questionnaire that has CSR and CA activities that companies embark on to help boast their financial

performance and a secondary data was also use from the annual report of the companies understudy

from 2010 to 2015 accounting for 24 cases.

TABLE 4.8 Descriptive Statistics

N Minimum Maximum Mean Std. Deviation
TOBIN'S Q 24 .3409 .9735 .744825 .2488236
PCSR 24 2 6 4.04 1.398
NCSR 24 1 9 6.17 2.408
COMPETITIVE ACTIONS 24 1 4 3.67 .761
FIRM SIZE 24 4.43 6.23 5.3171 .67460
FIRM AGE 24 15.00 30.00 22.5000 4.01085
RETURN ON ASSETS 24 -.04 .49 .0967 .10929
LEVERAGE 24 .09 .45 .2596 .10187
LIQUIDITY 24 .19 1.34 .7638 .33075
Valid N (listwise) 24
Source: Field work, 2016

4.3.2 Correlation

Table 4.9A and 4.9B demonstrates the Pearsons correlation among all the variables in the model

when CA level is low and high respectively, this tables will help us to respond to Hypothesis 1a and

1b, Even though the Pearsons correlations among the independent variables are not particularly high,

the study shows that PCSR and CA are positively correlated with Tobins Q. Control variable like

Page 51 of 72
Firm size is also negatively correlated to Tobins Q, firms age is also positive correlated to Tobins Q

and very significant, return on assets is also weakly correlated to Tobins Q, leverage is also strongly

positively correlated and very significant whiles liquidity is negatively correlated to Tobins Q. Apart

from firm age and leverage which significantly correlate with Tobins Q, all the other variables

including the independent variables were not significant correlated.

In moderation and mediation analysis one of the conditions to run such an analysis is for some of the

independent variables to be positively correlated to the dependent variables. Negative CSR is

negatively correlated to Tobins Q. As proposed in H1a that PCSR is positively related to CFP, from

the correlation Table 4.9A and 4.9B, there is statistically insignificantly weak relationship between

PCSR and CFP (r= .319, p > .05 and r=.319, p >.05) respectively when CA is low and high since the

study maintain the same level of PCSR in both circumstances, even though there is a positive

relationship, the relationship is insignificant so I fail to reject the NULL HYPOTHESIS and cannot

conclude with certainty that there exist a relationship between PCSR and CFP. As also proposed in

H1b that NCSR is negatively related to CFP, it can also be seen in Table 4.9a and 4.9B that (r= -.355,

p > 0.05) indicating there is a negative relationship between NCSR and CFP but cannot be said with

certainty that there is a negative relationship because it is statistically insignificant and for that reason

I fail to reject the NULL HYPOTHESIS. Competitive Actions is also positively correlated with an

(r= .236, p > 0.05 and r= .070, p > 0.05) in Table 4.9A and 4.9B respectively, which is also

statistically insignificant and cannot also be said with certainty that there is a relationship between

CFP and CA.

Page 52 of 72
Table 4.9 A when CA is low-Correlations
RETURN
TOBIN'S COMPETITIVE FIRM FIRM ON
Q PCSR NCSR ACTIONS SIZE AGE ASSETS LEVERAGE LIQUIDITY
TOBIN'S Pearson 1 0.319 -0.355 0.236 -0.269 0.747 0.134 0.646 -0.092
Q Correlation

Sig. (2- 0.129 0.088 0.268 0.204 0 0.534 0.001 0.668

tailed)
N 24 24 24 24 24 24 24 24 24
Source: Field work, 2016

Table 4.9 B when CA is high-Correlations

RETURN
TOBIN'S COMPETITIVE FIRM FIRM ON
Q PCSR NCSR ACTIONS SIZE AGE ASSETS LEVERAGE LIQUIDITY
TOBIN'S Pearson 1 .319 -.355 .070 -.269 .747 .134 .646 -.092
Q Correlation

Sig. (2- .129 .088 .744 .204 .000 .534 .001 .668
tailed)
N 24 24 24 24 24 24 24 24 24
Source: Field work, 2016

4.3.3 Regression Analysis on Tobins Q, PCSR and CA Moderator

Table 4.10A and 4.10B, 4.11A and 4.11B, 4.12A and 4.12B shows the results of the regression model

used to test the proposed hypotheses when CA is low and high and also answer the first research

question which seeks to know the strength of the relationship between CSR and CFP when CA in

introduce. Model 1 from table 4.10A and 4.10B reports the results of the main effect with an (R2 =

.107,R2=.103 and adjusted R2=.022, R2=.017) respectively, both indicating that over 10 percent

variations in the dependent variable is as a result of the independent variable can be explain by the

regression model, with (p >.05) which is insignificant. The second model also show that as a result of

the moderation effect the R2 and adjusted R2 all cause (R2= .110, .103 and adjusted R2= .023,-.009)

Page 53 of 72
variation in the dependent variable but recorded (p >.05) which is insignificant.

Model 1 in table 4.11A and 4.11B, recorded an F-test of 1.258 and 1.204 with significance (p =.305,

.320) respectively when CA is low and high. This means the probability of this result occurring by

chance is above (p > .05) which means there is no significant relationship between PCSR and CFP

when CA is introduce. Model 2 in the table 4.11A and 4.11B also shows the moderating effect

recording F-test of .825 and .932 with significance (p=.495, .444) respectively when CA is low and

high. This is also mean that the probability of the result occurring by chance is above (P>.05) which

also mean there is no significant relationship between PCSR and CFP when CA is use a moderator.

Model 1 in table 4.12A and 4.12B also records a ( = .271 and .088) and ( = .332 and -.040)

respectively for PCSR and CA when CA was low and high but were both not significant and when I

further looked at the second model which has the moderating effect included, it recorded ( = .215,

.273 and .171) and ( = .323, -.061 and -.143) respectively for PCSR, CA and which was still not

significant (p > .05) when CA was low and high. The positivity only increase from ( = .215 to 323).

This means that the moderating effect beta of ( = 0.171,-.143) when CA was low and high may

moderate the relationship but cannot be said with certainty that CA moderate the relationship

between PCSR and CFP and for that reason the hypothesis 2 which is the relationship between PCSR

and CFP is moderated by a firms level of CA, such that the positive relation between PCSR and CFP

is stronger when the level is CA is high, cannot be confirmed with certainty so I fail to reject the

NULL HYPOTHESIS.

Page 54 of 72
4.10 A when CA is low-Model Summary

Std. Change Statistics

Adjusted Error of R
R R the Square F Sig. F
Model R Square Square Estimate Change Change df1 df2 Change
1 .327 .107 .022 .2460810 .107 1.258 2 21 .305
2 .332 .110 -.023 .2517092 .003 .071 1 20 .792
Source: Field work, 2016

Table 4.10B when CA is HIGH-Model Summary

Std. Change Statistics

Adjusted Error of R
R R the Square F Sig. F
Model R Square Square Estimate Change Change df1 df2 Change
1 .321 .103 .017 .2466426 .103 1.204 2 21 .320
2 .350 .123 -.009 .2499398 .020 .450 1 20 .510
Source: Field work, 2016

4.11A when CA is low-ANOVAc

Sum of Mean
Model Squares Df Square F Sig.
1 Regression .152 2 .076 1.258 .305a
Residual 1.272 21 .061
Total 1.424 23
2 Regression .157 3 .052 .825 .495b
Residual 1.267 20 .063
Total 1.424 23

Page 55 of 72
4.11A when CA is low-ANOVAc
Sum of Mean
Model Squares Df Square F Sig.
1 Regression .152 2 .076 1.258 .305a
Residual 1.272 21 .061
Total 1.424 23
2 Regression .157 3 .052 .825 .495b
Residual 1.267 20 .063
Total 1.424 23
a. Predictors: (Constant), COMPETITIVE ACTIONS, PCSR
b. Predictors: (Constant), COMPETITIVE ACTIONS, PCSR, CPCC
c. Dependent Variable: TOBIN'S Q
Source: Field work, 2016

Table 4.11B when CA is HIGH-ANOVAc

Sum of Mean
Model Squares df Square F Sig.
1 Regression .147 2 .073 1.204 .320

Residual 1.277 21 .061

Total 1.424 23
2 Regression .175 3 .058 .932 .444

Residual 1.249 20 .062

Total 1.424 23
Source: Field work, 2016

Page 56 of 72
4.12A when CA is low- Coefficientsa
Standardize
Unstandardized d
Coefficients Coefficients
Model B Std. Error Beta t Sig.
1 (Constant) .445 .253 1.759 .093
PCSR .048 .044 .271 1.100 .284
COMPETITIVE .029 .080 .088 .359 .723
ACTIONS
2 (Constant) .245 .791 .309 .760
PCSR .038 .058 .215 .663 .515
COMPETITIVE .089 .241 .273 .371 .715
ACTIONS
CPCC .032 .121 .171 .267 .792
a. Dependent Variable: TOBIN'S Q
Source: Field work, 2016

Table 4.12B when CA HIGH-Coefficientsa

Unstandardized Standardized
Coefficients Coefficients
Model B Std. Error Beta t Sig.
1 (Constant) .559 .285 1.960 .063
PCSR .059 .039 .332 1.514 .145
COMPETITIVE -.003 .018 -.040 -.180 .859
ACTIONS
2 (Constant) .605 .297 2.038 .055

PCSR .057 .040 .323 1.452 .162

COMPETITIVE -.005 .019 -.061 -.273 .788

ACTIONS
CPCC -.009 .013 -.143 -.671 .510
Source: Field work, 2016

Page 57 of 72
4.3.4 Regression Analysis on Tobins Q, NCSR and CA Moderator

Table 4.13A and 4.13B, 4.14A and 4.14B, 4.15A and 4.15B shows the results of the regression model

used to test the proposed hypotheses and also answer the first research question which seeks to know

the strength of the relationship between CSR and CFP when CA in introduce. Model 1 from table

4.13A and 4.13B reports the results of the main effect with an (R2 = .183,.130 and adjusted

R2=.105,.047) respectively when CA was low and high, both indicating that over 18,13 and 10,4.7

percent respective variations in the dependent variable is as a result of the independent variable can

be explain by the regression model, with (p >.05) which is insignificant. The second model also show

that as a result of the moderation effect the R2 and adjusted R2 all cause (R2= .271, .131 and adjusted

R2= .162, .000) respectively when CA is low and high, which means that over 27%, 13% and 16%,

0% respective variations in the dependent variable is as a result of the independent variable can be

explain by the regression model but recorded (p >.05) which is insignificant.

Model 1 in table 4.14A and 4.14B, recorded an F-test of 2.353 and 1.570 with significance (p =.120,

.231). This means the probability of this result occurring by chance is above (p > .05) which means

there is no significant relationship between NCSR and CFP when CA is introduce. Model 2 in the

table 4.14A and 4.14B also recorded F-test of 2.482 and 1.003 with significance (p=.090, .412)

respectively. This is also mean that the probability of the result occurring by chance is above (P>.05)

which also mean there is no significant relationship between NCSR and CFP when CA is use a

moderator.

Model 1 in table 4.15A and 4.15B also records a ( = -.357,-.354 and .238, .062) respectively for

NCSR and CA when the level of CA was low and high but were both not significant and when the

Page 58 of 72
study further looked at the second model which has the moderating effect included, it recorded ( = -

.622, .184 and .402) and ( = -.393, .073 and .049) when CA was low and high respectively for

NCSR, CA and the moderation effect which was still not significant (p > .05) and only ( = -

.622,P>0.025) which was significant. The negativity just increase from ( = -.357 to -.393). This

means that the moderating effect beta of ( = 0.135 and .049) may moderate the relationship but

cannot be said with certainty that CA moderate the relationship between NCSR and CFP and for that

reason the hypothesis 3 which is the relationship between NCSR and CFP is moderated by a firms

level of CA, such that the negative relationship between NCSR and CFP is stronger when the level is

CA is high, cannot be confirmed with certainty so I fail to reject the NULL HYPOTHESIS.

To answer the research question, Analysis from this tables show that, the level of strength between

CSR and CFP gets partially stronger as we introduce CA as a contingency because the positivity only

increase partially from ( = .215 to 323) and the negativity also increase partially from ( = -.357 to -

.393) which means the effect of CA been use as a moderator is very minimal and moreover not

significant.

4.13A when CA is low- Model Summary

Std. Change Statistics
Adjusted Error of R
R R the Square F Sig. F
Model R Square Square Estimate Change Change df1 df2 Change
1 .428 .183 .105 .2353599 .183 2.353 2 21 .120
2 .521 .271 .162 .2277794 .088 2.421 1 20 .135
Source: Field work, 2016

Page 59 of 72
4.13 B when CA is HIGH-Model Summary
Std. Change Statistics
Error of R
Adjust the Square d d Sig. F
Mo R ed R Estimat Chang F f f Chan
del R Square Square e e Change 1 2 ge
1 .3 .130 .047 .24287 .130 1.570 2 2 .231
61 48 1
2 .3 .131 .000 .24877 .001 .015 1 2 .903
62 70 0
Source: Field work, 2016

4.14A when CA is low- ANOVAc

Sum of Mean
Model Squares Df Square F Sig.
1 Regression .261 2 .130 2.353 .120a
Residual 1.163 21 .055
Total 1.424 23
2 Regression .386 3 .129 2.482 .090b
Residual 1.038 20 .052
Total 1.424 23
a. Predictors: (Constant), COMPETITIVE ACTIONS, NCSR
b. Predictors: (Constant), COMPETITIVE ACTIONS, NCSR, CNCC
c. Dependent Variable: TOBIN'S Q
Source: Field work, 2016

Page 60 of 72
 Table 4.14A when CA is HIGH ANOVAc
Sum of Mean
Model Squares Df Square F Sig.
1 Regression .185 2 .093 1.570 .231

Residual 1.239 21 .059

Total 1.424 23
2 Regression .186 3 .062 1.003 .412

Residual 1.238 20 .062

Total 1.424 23
Source: Field work, 2016

4.15 A when CA is low-Coefficientsa

Standardize
Unstandardized d
Coefficients Coefficients
Model B Std. Error Beta T Sig.
1 (Constant) .687 .271 2.534 .019
NCSR -.037 .020 -.357 -1.811 .084
COMPETITIVE .078 .064 .238 1.208 .240
ACTIONS
2 (Constant) .920 .302 3.045 .006
NCSR -.064 .026 -.622 -2.432 .025
COMPETITIVE .060 .063 .184 .947 .355
ACTIONS
CNCC .098 .063 .402 1.556 .135
Source: Field work, 2016

Page 61 of 72
 Table 4.15A when CA HIGH-Coefficientsa
Unstandardized Standardized
Coefficients Coefficients
Model B Std. Error Beta T Sig.
1 (Constant) .889 .306 2.904 .008

NCSR -.037 .021 -.354 -1.738 .097

COMPETITIVE .005 .017 .062 .303 .765
ACTIONS
2 (Constant) .899 .324 2.777 .012

NCSR -.041 .039 -.393 -1.036 .313

COMPETITIVE .006 .019 .073 .321 .752
ACTIONS
CNCC .001 .012 .049 .124 .903

Source: Field work, 2016

4.3.5 Regression Analysis on Tobins Q, PCSR, NCSR, Control V. and CA Moderator

Table 4.9A and 4.9B above has demonstrated the individual effect of CA on both PCSR and NCSR

and that will assist as to answer the second research question which seeks to know whether firms

where CSR and CA co-exist perform financial well. The correlation from table 4.9A and 4.9B shows

there are positive relationship between PCSR and CFP, and CA & CFP when the level of CA is low

and high was ( = .236 and .070) and significance level of (0.268 and 0.744) respectively which were

not statically significant and there is a negative relationship between NCSR and CFP when applied

separately. Analysis from table 4.10 to 4.15 on both situations where CA is low and high shows that,

the positivity only increase partially from ( = .215 to 323) and the negativity also increase partially

from ( = -.357 to -.393) when CA was use as a moderator but the performance is very minimal and

their effect were not significant in both the correlation and the regression analysis. So to answer the

research question, the study proves that telecom firms where CSR and CA both exist perform

partially financially well.

Page 62 of 72
Table 4.16 when CA is HIGH-Model Summary
Std. Change Statistics
Adjusted Error of R
R R the Square F Sig. F
Model R Square Square Estimate Change Change df1 df2 Change
1 .908 .825 .731 .1290189 .825 8.818 8 15 .000
2 .958 .918 .855 .0946474 .094 7.436 2 13 .007
Source: Field work, 2016

Table 4.17 when CA is HIGH ANOVAc

Sum of Mean
Model Squares df Square F Sig.
1 Regression 1.174 8 .147 8.818 .000

Residual .250 15 .017

Total 1.424 23
2 Regression 1.308 10 .131 14.596 .000

Residual .116 13 .009

Total 1.424 23
Source: Field work, 2016

Table 4.18A when CA is low Coefficientsa

Standardize
Unstandardized d
Coefficients Coefficients
Model B Std. Error Beta T Sig.
1 (Constant) -.457 .394 -1.159 .265
PCSR -.012 .025 -.068 -.494 .629
NCSR -.008 .013 -.082 -.676 .509
COMPETITIVE .038 .042 .117 .904 .380
ACTIONS
Page 63 of 72
 FIRM SIZE -.002 .055 -.004 -.029 .977
FIRM AGE .039 .008 .630 4.986 .000
RETURN ON ASSETS .047 .263 .021 .180 .860
LEVERAGE 1.210 .356 .495 3.403 .004
LIQUIDITY -.035 .110 -.047 -.318 .755
2 (Constant) -.718 .613 -1.173 .262
PCSR -.021 .033 -.118 -.637 .535
NCSR .002 .024 .017 .072 .944
COMPETITIVE .085 .138 .262 .622 .545
ACTIONS
FIRM SIZE -.004 .059 -.012 -.076 .941
FIRM AGE .039 .008 .623 4.587 .001
RETURN ON ASSETS .007 .290 .003 .024 .981
LEVERAGE 1.395 .509 .571 2.742 .017
LIQUIDITY .006 .136 .008 .042 .967
CPCC .021 .070 .109 .295 .773
CNCC -.029 .057 -.119 -.508 .620
a. Dependent Variable: TOBIN'S Q
Source: Field work, 2016

Table 4.18B when CA HIGH-Coefficientsa

Unstandardized Standardized
Coefficients Coefficients

Model B Std. Error Beta t Sig.

1 (Constant) -.370 .442 -.835 .417

PCSR -.001 .023 -.004 -.031 .976

NCSR -.009 .013 -.089 -.715 .485

COMPETITIVE -.001 .011 -.009 -.073 .943

ACTIONS

FIRM SIZE .001 .056 .002 .012 .991

FIRM AGE .040 .008 .643 4.898 .000

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 RETURN ON .037 .273 .016 .135 .894
ASSETS

LEVERAGE 1.170 .381 .479 3.068 .008

LIQUIDITY -.029 .119 -.039 -.244 .810

2 (Constant) -.095 .354 -.269 .792

PCSR -.006 .017 -.032 -.335 .743

NCSR .034 .017 .327 1.961 .072

COMPETITIVE -.013 .009 -.151 -1.444 .172
ACTIONS

FIRM SIZE -.063 .046 -.172 -1.387 .189

FIRM AGE .044 .006 .702 6.885 .000

RETURN ON -.035 .201 -.015 -.173 .865
ASSETS

LEVERAGE 1.177 .280 .482 4.205 .001

LIQUIDITY -.094 .089 -.125 -1.061 .308

CPCC -.015 .006 -.241 -2.563 .024
CNCC -.013 .005 -.427 -2.666 .019
Source: Field work, 2016

Table 4.16 and 4.17, 4.18A and 4.18B above shows the results of the regression model that will help

us to understand CSR and CA improve CFP. Model 1 in table 4.16 reports the result of the main

effect when PCSR, NCSR and CA with an (R2 = .825, and adjusted R2=.7317) respectively when CA

was high, both indicating that over 83 and 73 percent respective variations in the dependent variable

is as a result of the independent variable can be explain by the regression model, with (p <.05) which

is significant. The second model also show that as a result of the moderation effect the R2 and

adjusted R2 all cause (R2= .92, and adjusted R2= .86) respectively when CA is high, which means

that over 92%, and 86%, respective variations in the dependent variable is as a result of the

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independent variable can be explain by the regression model and recorded (p <.05) which is

significant. In all this two models when the CA was low, the result of the R 2 and adjusted R2 were

both not significant.

Model 1 in table 4.17, recorded an F-test of 8.818 with significance (p < .000). This means the

probability of this result occurring by chance is below (p < .05) which means there is a significant

relationship between CSR (PCSR and NCSR) and CFP when the level of CA is high. Model 2 in the

table 4.17A where CA was use as a moderator and the level of CA was also high, this recorded F-test

of 14.596 with significance (p=.000) but in the situations where the level of CA is low, both the main

effect and the moderating effect were not significant, This is also mean that the probability of the

result occurring by chance is below (P <.05) which also mean there is a significant relationship

between CSR (PCSR and NCSR) and CFP when CA is use as moderator. This relationships were

significant because in table 4.16 and 4.17 the model 1 and 2 were the combined effect of the

moderating effect of both PCSR*CA, NCSR*CA and all the control variables specified in the model

summing up to the complete CSR and CA effect on CFP.

Model 1 in table 4.18A and 4.18B is the fully specified model which includes all the independent

variables and the control variable and this recorded a ( = -.004,-.089 and -.009) and ( = -.068,-.082

and -.017) respectively for PCSR, NCSR and CA when the level of CA was high and low but were

both not significant and when the study further looked at the second model which has the moderating

effect PCSR*CA, NCSR*CA and all the other control variables it recorded a moderating beta ( = -

.241, and -.427) with the two recording significance level of (P < .05) and ( = .295 and -.508) with

the two recording significance level (P > .05) when CA was high and low respectively for PCSR*CA

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and NCSR*CA moderation effect on the fully specified model, which means that when the level of

CA is high in a fully specified model, CA moderates the relationship between CSR and CFP.

Tobins Qit+1 = + 1PCSRit + 2NCSRit + 3PCSRit CAit + 4NCSRit CAit + 5CAit +

10Firm sizeit + 11Firm ageit + 12Return on assetsit + 13Leverageit + 14Liquidityit + it+1,

4.5 Discussion

The study shows that when CSR is decomposed into PCSR and NCSR and analyzed separately

with respect to CA been high or low has an effect on CFP positively in the case of PCSR and

negatively in the case of NCSR but this relationships with CFP are partially strong when CA is

use as a moderator and as can be seen in the correlation coefficients, CA is correlated to CFP

when it is low than when it is high. Table 4.18b shows that, when CA is use as a moderator in a

fully specified model CSR and CA moderate the CFP, this analysis is to answer the third research

question of how CSR and CA improve CFP of Firms in the telecom industry.

In summing up, the finding from Kim et el, 2011 which research on the same topic but in relation

to software companies in the United State of America, that they found a significant relationship

between CFP and PCSR when CA is introduce and that its get stronger when CA level is high and

a significant relationship between CFP and NCSR when CA is introduce and that its get stronger

when CA level is high, that may be true when it comes to the software companies in the USA but

applying similar studies on the telecom industry in Ghana could not prove with certainty that,

that accession is true and that a significant relationship exist but when study further looked at the

situation where a fully specified model is in place, there was a significant relationship between

CSR and CFP when CA was use as the moderator and that its moderates it when the level of CA

is high.

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 CHAPTER FIVE

SUMMARY, RECOMMENDATIONS AND CONCLUSION

5.1 Introduction

This is the final chapter which explains in detail the Summary of the main findings, the

Recommendations made for further studies and ends with the conclusion. During this study, I tried to

delve into the complex relationship between CSR and CFP by decomposing CSR in PCSR and

NCSR and using CA as a contingency and then examined how the effects of Positive CSR and

Negative CSR vary with CA and a fully specified model and Data on four telecom companies in

Ghana between 2010 and 2015 was used.

5.2 Summary of the main findings

Analysis from the study shows that, even though the Pearsons correlations among the independent

variables are not particularly high, the study shows that PCSR and CA are positively correlated with

Tobins Q. Control variable like Firm size is also negatively correlated to Tobins Q, firms age is also

positive correlated to Tobins Q and very significant, return on assets is also weakly correlated to

Tobins Q, leverage is also strongly positively correlated and very significant whiles liquidity is

negatively correlated to Tobins Q. Apart from firm age and leverage which significantly correlate

with Tobins Q, all the other variables including the independent variables were not significant

correlated.

As proposed in H1a that PCSR is positively related to CFP, from the correlation Table 4.9A and

4.9B, there is statistically insignificantly weak relationship between PCSR and CFP (r= .319, p > .05

and r=.319, p >.05) respectively when CA is low and high since the study maintain the same level of

PCSR in both circumstances, even though there is a positive relationship, the relationship is

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insignificant so I fail to reject the NULL HYPOTHESIS and cannot conclude with certainty that there

exist a relationship between PCSR and CFP. As also proposed in H1b that NCSR is negatively related

to CFP, it can also be seen in Table 4.9a and 4.9B that (r= -.355, p > 0.05) indicating there is a

negative relationship between NCSR and CFP but cannot be said with certainty that there is a

negative relationship because it is statistically insignificant and for that reason I fail to reject the

NULL HYPOTHESIS. Competitive Actions is also positively correlated with an (r= .236, p > 0.05

and r= .070, p > 0.05) in Table 4.9A and 4.9B respectively, which is also statistically insignificant

and cannot also be said with certainty that there is a relationship between CFP and CA.

Analysis from both model 1 and 2 in table 4.12A and 4.12B shows that the positivity only increase

from ( = .215 to 323) with an insignificant p-value. This means that the moderating effect beta of (

= 0.171,-.143) also with an insignificant p-value when CA was low and high may moderate the

relationship but cannot be said with certainty that CA moderate the relationship between PCSR and

CFP such that H2 we fail to reject the null hypothesis. Analysis from both Model 1 and 2 in table

4.15A and 4.15B shows that the negativity just increase from ( = -.357 to -.393) with an

insignificant p-value and also the moderating effect beta of ( = 0.135 and .049) also with an

insignificant p-value when CA was low and high may moderate the relationship but cannot be said

with certainty that CA moderate the relationship between NCSR and CFP such that H3 the study fail

to reject the NULL HYPOTHESIS.

Analysis prove that, the level of strength between CSR and CFP gets partially stronger as we

introduce CA as a contingency because the positivity only increase partially from ( = .215 to 323)

and the negativity also increase partially from ( = -.357 to -.393) which means the effect of CA been

use as a moderator is very minimal and moreover not significant. Analysis from table 4.10 to 4.15 on

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both situations where CA is low and high shows that, the positivity only increase partially from ( =

.215 to 323) and the negativity also increase partially from ( = -.357 to -.393) when CA was use as a

moderator but the performance is very minimal and their effect were not significant in both the

correlation and the regression analysis. So to answer the research question, the study proves that

telecom firms where CSR and CA both exist perform partially financially well.

Model 1 in table 4.18A and 4.18B is the fully specified model which includes all the independent

variables and the control variable and this recorded a ( = -.004,-.089 and -.009) and ( = -.068,-.082

and -.017) respectively for PCSR, NCSR and CA when the level of CA was high and low but were

both not significant and when the study further looked at the second model which has the moderating

effect PCSR*CA, NCSR*CA and all the other control variables it recorded a moderating beta ( = -

.241, and -.427) with the two recording significance level of (P < .05) which is statistically significant

and ( = .295 and -.508) with the two recording significance level (P > .05) when CA was high and

low respectively for PCSR*CA and NCSR*CA moderation effect on the fully specified model, which

means that when the level of CA is high in a fully specified model, CA moderates the relationship

between CSR and CFP.

5.3 Recommendations

The results from the research have brought more understanding and significant practical implications.

Previous studies on CSR have argued on whether firms should engage in CSR activities (e.g., Griffin

& Mahon, 1997; Orlitzky etal., 2003). This study proposes that managers should consider the

proportion of PCSR and CA that they need to employ in their activities in other to generate higher

CFP. Although PCSR can contribute to CFP in general, its effect could be weaker if the firm is

actively conducting CA because CA would increase the operating cost and hence lower CFP, when

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considering embarking on CSR and CA simultaneously. Hence, to best capitalize on PCSR, managers

need to check their firms level of CA and consider PCSR an appropriate action even when CA

insufficiently is being implemented. Otherwise, when CA is sufficiently implemented, it will only

increase the cost level of firms.

Even though the study provide certain vital findings on CSR and CA and their relationship with CFP,

some drawbacks still exist and that brings about concerns for further research to be conducted. First, I

will recommend the same kind of study to be conducted on firms in multiple industries. Even though

the telecom industry is an appropriate context in which to test the hypotheses, findings from multiple

firms in different industries will bring about a clearer understanding to help in generalization.

5.4 Conclusions

Results from this research enhance CSR literature in several ways. Firstly, the theoretical argument

and the empirical results in this paper emphasize that exploring CSR effects in relation with CA is

necessary but not so important in elucidating the mechanism through which CSR affects CFP.

Corporate entities doing business in a society, is expected to fulfil both economic and ethical

responsibilities (Carroll, 1979; Carroll & Shabana, 2010). Knowing that CA and CSR are both firm

actions that first and foremost represent economic and ethical responsibilities respectively; this

research makes a claim that a firms CA level should not be too high as compared to CSR when the

aim is to increase CFP and not an important consideration in exploring the performance implications

of CSR when it comes to the telecom industry but very important when all other control variables will

be incorporated in a complete model in clearing up the complex relationship between CSR and CFP.

As a result, this study adds to CSR literature by identifying a new contingency that explains the

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complex relationship between CSR and CFP when other control variables are in place. The study

found that NCSR is not always harmful to a firm because it can be beneficial in a particular situation

by saving cost. However, if the firm keeps using NCSR, the costs of NCSR may outweigh the

benefits by damaging the firms reputation and relationships with different stakeholders.

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