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IMPLEMENTATION OF CORPORATE SOCIAL RESPONSIBILITY AND ITS CHALLENGES FOR BANKS IN SWAZILAND
Implementation of Corporate Social Responsibility and its Challenges for Banks in Swaziland
A dissertation submitted to the University of Nottingham in part consideration for the degree of Masters of Business Administration (MBA).
First and foremost I extend my sincere thanks to my supervisor, Vanitha Ponnusamy for her guidance and constant support in the whole process of this research.
To my family, thank you for giving me all the much needed support, encouragement and patience while away pursuing the MBA course.
To the entire staff in the Swaziland Embassy office, thank you for the unwavering support to me for the entire duration of my studies and the immense contribution while carrying out this research.
Finally, I would like to thank the Almighty God for giving me the strength while doing the MBA course.
10 The Dissertation Structure 1 1 3 4 6 6 7 8 8 9 10 11 2.3 Objectives of the study 1.1 The Social Perspective 2.0 Introduction 2. Chapter Two: The Contextual Background of Swaziland 2.2 Economic Status 2.5 Introducing the Research Concepts 1.8 limitations of the study 1.9 The scale of the study 1.2.6 Significance of the Study 1.7 Research Methodology 1.1 The influence of poverty in Corporate Social Responsibility 1.TABLE OF CONTENTS Table of Contents List of Appendices List of Figures List of Tables Abstract i iv iv iv v TABLE OF CONTENTS 1.4 Political Climate i 12 12 12 13 15 15 .2 Background and Overview 1. Chapter One: Introduction 1.1 Introduction of the study 1.4 The Research Questions 1.3 Employment and Working Conditions 2.
7 Data Analysis 4.1 Corporate Social Responsibility in Africa 3.5 Government Incentives to Companies for Corporate Social Responsibility 2.1 The Responsibilities of Business 3.1 The Development of Corporate Social Responsibility 3.4.1 Definition of Corporate Social Responsibility 3.5 Chapter Summary 19 19 19 20 22 22 23 25 27 30 32 34 38 22.214.171.124 The Bank clients (NGOs) 4.6 Data Collection 4.2.6 The Banking Industry in Swaziland 126.96.36.199 Social Responsibility for Banking Industry 3.8 Chapter Summary ii 39 39 39 40 41 42 42 44 47 48 49 50 .7 Chapter Summary 16 17 18 3.2 Corporate Social Responsibility in Swaziland 3.3 Corporate Social Responsibility in Context 3.2 Understanding the Concept of Corporate Social Responsibility 3.2.1 The Commercial banks 4.2 Motivations for Corporate Social Responsibility 3.5 Development of Interview Questions 4.0 Introduction 4.4 Profiles for Selected Organizations 4.3 Implementation of Corporate Social Responsibility 3.1 Research Design 4.2 Qualitative Approach 4.3 Selection of Organizations 4. Chapter Four: Research Methodology 4.3. Chapter Three: Literature Review 3.3.0 Introduction 3.
3 The Effect of CSR on Client (NGOs) Choice of Bank 5.0 Introduction 6.2 Drivers of Corporate Social Responsibility 5.2 Implications for Theory and Practice 6.5 General Discussion 5.1 Bank Practices in Corporate Social Responsibility 5.4 The Perception of Bank Employee on CSR Practices by their Banks 5.0 Introduction 5. Chapter Five: Findings and Analysis 5.0 References 69 iii .1 Conclusions 6.4 Limitations of the Study 6.6 Chapter Summary 51 51 51 56 59 61 62 64 Chapter Six: Conclusion and Recommendations 6.5 Chapter Summary 65 65 65 66 67 68 68 7.5.3 Recommendations 6.
APPENDENCES Appendix one: List of Institutions that Participated in the Study Appendix two: Interview Questions 82 82 84 LIST OF FIGURES Figure 1: Time scale for the study Figure 2: Carroll’s (1991) Corporate Social Responsibility Pyramid Figure 3: Visser’s Africa Corporate Social Responsibility Pyramid Figure 4: Corporate Social Responsibility Issues by Banks 10 28 31 52 TABLES Table 1: Examples of Activities for Different bank Priority Issues 53 iv .
This research therefore. 2009). The study reveals that government and NGOs have no influence on CSR by banks in the country as they are hardly involved in the CSR activities. 1991).ABSTRACT Business firms employ different processes of social responsiveness to address social problems. the unavailability of regulations on CSR leads to CSR concept not being clearly understood by companies and the society in Swaziland. and have the CSR in Swaziland being properly coordinated. which can lead to unclear responsibilities of companies under the banner of CSR and also raise unrealistic expectations by the society. In-depth telephone interviews were used to collect information on the CSR by banks in Swaziland. However. International banks use their group policy as a base for CSR initiative in Swaziland. This comes after the public has raised concerns that as business firms make profit from the communities. they choose activities that are relevant to their interests. The research indicates that CSR by banks is motivated by creation of self image and gaining of recognition by the communities. The drivers of CSR were also examined to get a deeper understanding of the CSR practices and their challenges. The study calls for government to encourage companies to adopt CSR. Limited budget is currently the only challenge for bank CSR as the need in communities is ever increasing. v . globalization has driven the Corporate Social Responsibility (CSR) concept throughout the world including Africa (Gjølberg. they should also be socially responsible to the communities from which they get the profits. As such. and actions (Wood. looked at the CSR practices by banks in Swaziland and the influence the practices have on clients and employees. operations.
and now the discussion is worldwide. Idowu (2008) observed that corporations in the 21st century have come to realize that in order to compete successfully in modern markets. particularly in developing countries.(Cochran. will be supported and promoted by EU. 2007). Growth in the practice of corporate social responsibility in Africa is most needed in the indigenous private sector (Roy. corporate social responsibility (CSR) has grown from a narrow and often marginalized notion into a complex and multifaceted concept. they need to be perceived by their stakeholders as being socially responsible. one which is becoming more central and is in line with today’s corporate decision making. International codes of conducts and principles. 2006) Over the past decades. such as the ILO declaration on fundamental principles and rights at work. 2004). 1 .1 Introduction of the study The growing public concern that private corporations should not only earn reasonable profits and provide fair returns to shareholders but also operate as good corporate citizens and socially responsible organizations has spread to the largest transnational corporations (TNCs) and seems to have been taken up by many companies in both richer and poorer countries ( Kumar & Gupta. In line with the EU Commission. and OECD guidelines for multinational enterprises. It has also been noted by Cochran (2007) that the CSR discussions several decades ago were confined to a small group of academics.CHAPTER ONE INTRODUCTION 1. involving almost all citizens. were still to familiarize themselves with the CSR concept. The SADC Secretariat as cited by the World Bank (2002) observed that it was only South Africa who was familiar with the concept of Corporate Social Responsibility. while the rest of Southern African Development Community (SADC) Member States. However. some of the developing countries in Africa were still dragging behind in the issues of CSR. The European Union Commission (2001) in their resolutions made it clear that the Commission would promote CSR principles and practice at international level.
with much of its contribution can be framed in terms of CSR (Visser. there is general agreement that the private sector remains one of the better placed institutions to make a significant and positive contribution towards improving social. The developing countries have to improve on governance and capacity building. Therefore it is obvious that business has a key role to play in this transformation process. Most of the challenges facing Africa need a very strong collaboration and partnerships between the business community. environmental destruction. 2005). 2005). economic growth and poverty reduction. The global debates on CSR and the highlighted challenges faced by Africa have triggered a need for a study that will look at the CSR practices in developing countries in Africa. On that note. A total transformation on these challenges is expected in the African countries. for them to be solved. According to Visser (2005). A number of studies on CSR have the notion that CSR has the potential of making significant positive contributions in developing countries. 2 . investment in people. civil society and government. the pursuit of peace and security. but Africa is still faced with a number of challenges which may have negative effects on the proper implementation of CSR. Werlin (2005) argue that poor countries suffer not much from insufficient aid as from the poor quality governance. labour exploitation and social disruption. The UNDP Country report Mozambique (2004) also confirms that good practice of CSR by business can be of great assistance to the severely affected developing countries in the Sub-Saharan region of Africa. This dissertation therefore looks at CSR practices in Swaziland. economic and environmental conditions in Africa (Visser. Africa is still faced with a number of challenges which include political corruption. with special focus in the banking industry. and increased and fairer trade.Much as CSR is being adopted and pushed to developing countries by many organizations including the UN agencies. This study is drawing from CSR theoretical frameworks and concepts to determine CSR practices in Swaziland. Despite the continued debate on CSR.
1. 2006). as in many instances state agencies are completely overtaxed in order to administer citizenship rights or for the purpose of contributing to the public good (Scherer & Palazzo. companies particularly MNCs are expected to mobilize to become part of the solution (World Bank. and follow the universally accepted principles. and thus CSR is in many ways interlinked with the process of globalization. 2007). business firms are also considered to be the solution of global regulation and public goods problems. political instability. poverty. This was a public call to the business community to join hands and be part of the solution in the society.2 Background and Overview Globalization has been able to drive the CSR concept throughout the world including Africa. The purpose of the United Nation Global Compact in the SubSaharan Africa was mainly to encourage companies to be involved in CSR practices. the UN Global Compact report by UNDP (2007). Therefore. The Heads of State and Governments at the 2002 United Nations' World Summit for Sustainable Development (WSSD) also acknowledged public-private and multi-stakeholder partnerships as a critical means for tackling global development issues (World Bank Institute. labour. The United Nations Global Compact (GC) has established the GC Regional Learning Forum (GCRLF) in Sub-Saharan Africa to promote responsible Corporate Citizenship in the region. but now. In this regard. 3 . corruption. 2009). globalization has changed public expectations and awareness with issues that include: human rights. and the increased need to secure its human and environmental dimensions (Gjølberg. Global Compact invites companies to adopt the ten Global Compact principles with the aim of building new coalitions with private stakeholders in order to achieve a more inclusive globalization”. 2008). the spread of communicable diseases as growing concern. much as businesses were previously viewed to be causing all the social ills. Millennium Development Goal (MDG) Eight also calls for a global partnership for development with specific references to the engagement of the private sector. environment. Increasingly.
As such. with secondary areas of involvement relating to its primary activities. as according to World Bank (1992b: 5. and most of the big companies including banks operating in Swaziland come from South Africa. not just based on the enormous amount of resources they may control. This term relates to charitable projects that are mostly external to the core business activity and in most cases serve the purpose of creating a positive image of the company among stakeholders (Hönke. they tend to use CSR policies from their parent companies. during the time of apartheid the South African approach to CSR has been dominated by activities referred to as corporate social investment (CSI). 4 .1 The influence of poverty in CSR Poverty is a relative term. in the implementation of their CSR. Their power is further enhanced by their mobility and their capacity to shift resources to locations where they can be used most profitably and to choose among suppliers applying criteria of efficiency. This may lead to having their CSR practices in Swaziland being implemented in a similar way as in South Africa. that is. Therefore. MNCs possess lots of power. 2008). the amount of income (or consumption) associated with a minimum acceptable level of nutrition and other necessities of everyday life.2. note 8) as cited by Hanmer et al (1999: p 797) People are considered as poor if their standard of living falls below the poverty line. and largely depends on South Africa for commercial and economic activities. In effect. and its measure and understanding may differ from place to place. some companies even in Swaziland may use CSI when referring to CSR. Swaziland is a small country next to South Africa. 1. this gives multinational firms the latitude to choose locations and the legal systems under which they will operate (Scherer & Palazzo. Therefore when looking at CSR. 2008).However. For the past years. it should be noted that with globalization. Knox and Maklan (2004) conclude that the public responsibility of business is divided into areas of social involvement directly related to their business activities and competencies. The definition of poverty.
5 . However. there has been limited business involvement in the debate due to the lack of clarity regarding the role of business. by improving local communities they obtain greater quality and reliability from their partners in local supply chains (Wambura. from ‘image management’ to wanting to ‘do one’s bit’ to ‘make poverty history”. Ite (2005) concludes that in the recent times. This omission has led some commentators on CSR to call for a shift to a more development-oriented approach when assisting the poor communities. and neglected areas into new markets and new sources of supply. international organizations. In view of the debates and deliberation on poverty in the WBCSD of 1999. and the absence of detailed and explicit exploration of the links between poverty and business at the level of an individual firm. 2007). non-governmental organizations and local communities. they turn the poor and excluded people into customers and employees. Again. For instance. 2006. no fund management company has included impact on poverty as a specific criterion in the assessment of company performance. the concept of corporate social responsibility (CSR) has been widely used by the business community to establish a framework for broader private sector involvement in poverty alleviation. or of the role that individual businesses can play in poverty reduction (Ite. Sharp (2006) observed that it is not easy to ascertain the effects of the contribution by corporate business on poverty reduction in the community because the interests of the business corporation may change rapidly in different contexts.When business firms are supporting the broader economic and social development. 2000 and 2001. and that the business practice in the implementation of CSR is complex. 217). “The intentions of CSR practitioners will surely vary across a wide spectrum. Jenkins (2005) has noted that so far CSR has not explicitly dealt with the poverty impacts of business activities. p. 2005). While assisting the poor communities. However. Therefore this clearly makes it nearly impossible that any of this range of intentions by the corporate business could be practically realized in a straightforward fashion (Sharp. despite the growth of ethical funds in recent years. Poverty reduction is one of the major objectives of national governments. Even the UN Global Compact does not explicitly refer to key development concerns such as poverty reduction or equity.
3. some people have viewed CSR as a concept that can be universally applied. but the World Bank (2006) has argued that the CSR strategies are increasingly more responsive to local stakeholders and to national policy and development agenda in countries where corporate are operating. CSR practices need 6 . including Swaziland. but the traditional top-down thinking on aid. by governments and non-governmental organizations may not yield the desired results. 1. 1. They tend to see the poor as victims to be helped. 1. Much as CSR is a critical concept in alleviating poverty. 2004). Weak understanding on the causes of poverty undermines the basis for country-specific poverty reduction strategies. 2006).4 The Research Questions The increasing importance and recognition of CSR within the business community has stimulated a lot of research into the CSR and its practices. but it was wildly inaccurate in its depiction of the causes of rural poverty in the region. this dissertation had the following research objectives: 1. practices and policies guiding banks in Swaziland in the implementation of CSR 1. 1999). In the process.2 To identify the driving forces for banks in Swaziland to engage in CSR activities 1.3.3 To establish the effect of CSR on client choice of banks.4 To investigate the perceptions and understanding of CSR concept by bank employees.3 Objectives of the study Since CSR is a relatively new and emergent business responsibility particularly in developing countries.3. and thus any philanthropy activity in this case will create dependency (Prahalad.3. which then has an influence in the CSR activities by corporate businesses (Hanmer et al. not as people who can be part of the solution. hence could never address the issue of rural poverty successfully (Sharp.The debates and discussions that have been done on CSR may have been a way of getting certain things done.1 To determine procedures.
In this dissertation therefore.to be developed in a ways that do not undermine the public sector practices but rather are supportive of the efforts to build demand for good governance and strong public institutions. but the research has investigated the CSR by banks in Swaziland through the following questions: a) What are the current CSR practices of the banks in Swaziland? b) Why do banks in Swaziland engage in CSR? c) How do the CSR practices of the banks affect the clients’ choice of banks in Swaziland? d) How are the bank’s CSR practices perceived by their employees? 1. Therefore in the implementation of CSR in Swaziland. This is especially true when CSR is conceived of as a long-term plan of action. over and above compliance with minimum legal requirements. CSR emphasizes that businesses have responsibilities above and beyond that of profit maximization. 7 . CSR is basically the realization of business contributions to sustainable development goals (World Bank. 2006). to address both its own competitive interest and the interest of wider society. 2007). The CSR undertakings are the voluntary actions that business can take. but rather a way for both companies and society to prosper. a number of questions are being raised. The idea behind CSR is that business and society are interwoven rather than distinct entities.5 Introducing the Research Concepts The concept of CSR is regarded as voluntary corporate commitment to exceed the explicit and implicit obligations imposed on a company by society's expectations of conventional corporate behavior (Heblich. CSR theories are also used as framework for the study. the CSR practices by banks and the influence the practices have on clients and employees are examined. the drivers of CSR are also considered. It is then contended that practicing CSR is not doing good to the society.
1. Secondary data in a form of relevant literature such as books. It is also not clear if the CSR bank activities are in line with government priories. The primary data was collected through an in depth telephone interviews. therefore this study tries to close the gap by providing an in-depth study into the current CSR orientations of banks in Swaziland. journals. In-depth telephone interviews were then conducted with: four commercial banks’ managers responsible for CSR in each of the four banks. The public and many other corporations get a deeper understanding on the issues of CSR would be able to know the procedures and practices followed by banks in Swaziland in their implementation of CSR. The reason for choosing a qualitative research was to allow me to collect rich and detailed set of data. and thus build a strong partnership. The banks on the other hand will be able to get perceptions of bank employees about the CSR practices done by the banks. and 8 .6 Significance of the Study The findings of this study will add new dimensions in the body of knowledge about CSR in Swaziland. Finally. At the moment minimal research has been done on CSR in Swaziland. and views of the bank clients on the effect CSR when choosing banks for business purposes in Swaziland. Both primary and secondary data were used to inform the study. A semi-structured and open-ended interview questions were developed after reviewing relevant literature. it is currently not clear whether the banks are using their international policies for CSR or a local policy.7 Research Methodology This was a qualitative study focusing on CSR practices by commercial banks in Swaziland. and the high travelling costs. since there is limited information about CSR practices in Swaziland. The use of telephone interviews was due to the long distance between the researcher (in Malaysia) and the interviewees (in Swaziland). ten bank employees (at least two from each bank) and ten bank clients (NGOs officials).1. The study will also be helpful to the bank partners in the implementation of CSR in Swaziland as it will equip them with the much needed information so that they may align themselves well with the procedures and requirements of the banks.
has both advantages and disadvantages that can influence the findings of the study. not many studies have been conducted on this field which could have contributed to this study. 1.8 Limitation of the study Much as the study provides insight on the CSR practices by banks in Swaziland. Therefore. On the analysis. Along with the interviews. some of the interviewees were relatively new (less than three years) in the organizations to give information that can richly inform the study. the content of the interviews was transcribed and before being analyzed qualitatively. the conclusions of the study are based on the information available Finally. The limitations of the telephone interviews included. it has been very difficult to access information on CSR activities by some of the companies in Swaziland.others were reviewed to inform the study. 9 . as some MNCs from South Africa were using their parent policies for CSR in Swaziland. Since the concept of CSR is still emerging in Swaziland. there are several limitations that should be taken into consideration when interpreting the findings of the study. In addition. and not having enough time to get as much information as possible. interruptions by third party during the interviews. telephone interviews. unclear telephone lines. The data collection method used. time was not enough to do a thorough investigation on the CSR practices by banks in Swaziland.
Write literature review 5. Submit full research proposal 4. the researcher used a Gantt chart as shown in figure 1. Complete remaining chapters 13.9. Revise the draft 15. Interviews continues 10. Finalize obj.1. Develop interview questions 6. Conduct Interviews 7. Analyzing data 12. Submit final document June 09 1 2 3 4 July 09 5 6 7 8 August 09 9 10 11 12 September 09 13 14 15 16 The timescale was used as guide to the researcher to manage time properly and keep track of all the research activities so that the whole project could be finished on time. Submit draft to Supervisor 14. Attend CSR Module class 8. & R. Update literature review 9. Reading literature 2. Time Scale for the Study In an effort to plan out the activities to be done on the available time. Figure 1: Timescale for the study Activity Weeks 1. 10 . Print and bind 16. Questions 3. Transcribing 11.
Chapter one provides an introduction to the study. questions and the significance of the study. This chapter also highlights the limitations and future direction regarding research on CSR. in Africa. In the process of drawing literature for the study. special attention is given to CSR practices in the context. economic conditions and the political situation in the country. This chapter also gives highlights on employment and working conditions in the country. sampling criteria. drivers of CSR. Chapter six presents the conclusions and recommendations on CSR by banks in Swaziland.10 The Dissertation Structure In an attempt to get a deeper analysis and understanding of how CSR is being implemented by banks in Swaziland. Major issues to be reflected in this chapter include: bank practices in CSR. 11 . then in Swaziland. data collection and analysis Chapter five is presenting the research finding and analysis. and employee perception on CSR practices by their banks. Motivation and the drivers for CSR are also covered in this chapter Chapter four presents the methodology that has been used when conducting the study. Chapter three presents the literature surrounding the concept of CSR. giving a background and overview of CSR concept. Chapter two gives an overview of Swaziland in terms of social status. implications for theory and practice. effect of CSR on client choice of bank.1. It would highlight the research strategy. This chapter also highlights the research objectives. the study has the following chapters for in-depth discussion.
000 square kilometers. The economy itself has experienced significant structural changes over the years since independence in 1968. with a population of slightly above a million (1. 12 . Swaziland has a mixed economy with a distinct orientation towards private ownership and a relatively open market economy. Swaziland has been faced with a number of challenges which include: the high rate of poverty. 2. 2009). Like most of the Southern Africa countries. The country has two official languages which are siSwati and English. with much attention to social aspect. The official business language is English (SIPA.1 The Social Perspective Although Swaziland is classified as a lower middle-income country.0 Introduction Swaziland is a small landlocked country which covers just over 17. as reported by IMF (2008). They do not have reliable sources of income and are usually employed as labourers. the scourge of HIV/AIDS.CHAPTER TWO THE CONTEXTUAL BACKGROUND OF SWAZILAND 2. poverty and the economy as a whole (Bench Marks Foundation. The poor in Swaziland also suffer from a high degree of vulnerability to HIV and AIDS. 2008). This chapter therefore gives a general overview about Swaziland. and the banking industry in Swaziland. employment and working conditions. 2009). This unfortunate situation has led the Swaziland government to place the reduction of poverty as a central challenge and a number of initiatives have been put in place to address inequalities. the majority of the population (about 66%) suffers from acute material poverty. casual or seasonal employees that attract very low wages. persistent drought.126.000 people). economic status. natural disasters and economic shocks. Swaziland is arguably the smallest country in Southern Africa. with a majority of the population being bi-lingual. located between South Africa and Mozambique (Thompson. political situation.
Hall (2008) observed that some of the philanthropic activities were creating dependency in the society. Since 2002 up to 2008 Swaziland has been one of the countries severely affected by both drought and the HIV/AIDS. 2009). of which the infection rate was reported at 39. 2. accounting for 67% of all people living with HIV and for 75% of AIDS deaths in 2007 (UNAIDS. 2008). The media also plays a very important role in publicizing that CSR activity. The Index continued to reveal that supervision of banking in the country is insufficient. All these social ills in Swaziland are influencing the people in the country to look up to companies to contribute towards a solution of these problems. 2007). the Sub-Saharan Africa remains the region most heavily affected by HIV. of which 80. and that the non-bank financial sector is dominated by the government. The World Bank noted that AIDS costs the country more than 0·5% per capita growth every year (Ashraf.000 are AIDS orphans who must be cared for and educated (Thompson. The publicity of the CSR activities has seen more companies being involved in the CSR initiatives in the country. agro-industries and mining generates much of the country’s formal employment. The traditional subsistence sector satisfies most of the country’s food requirements and is an important source of employment. while the businesses and organizations are responding to the challenges of the country. The economy in Swaziland can be described as dualistic. the modern sector. (UNDP. the investment climate. 2008). and most of its exports. Whatever contribution being made by the business to the Swazi society.000 vulnerable children. 13 . dominated by sugar cane. agro-forestry. 2001). However.2 Economic Status The financial system of Swaziland is viewed by the Index of Economic Freedom (2009). Generally.high rate of unemployment and increase in corruption (UNDP. 2006). AIDS kills thousands of young adults damages economic growth. Manufacturing continues to be the leading sector in terms of the contributor to the GDP and exports (UNDP. to be very small and subject to considerable government influence. Most of the CSR initiatives being implemented by different companies in the country have been received with both hands by all the stakeholders in the country even if some of them are not direct beneficiaries of that initiative. The disease has left in its wake 150. the community leaders and authorities of the country would publicly recognize that contribution by the company.2%. and labour productivity.
Furthermore. creating wealth necessary to enhance the social and economic development of country and its people. combined with declining competitiveness and weak institutional capacity have further contributed to the weakened output performance (IMF. 2009). However. fruit-canning and textile industry). forestry and mining into secondary production (manufacturing. pulp-milling. the agriculture sector is the country’s major employer and a source of livelihood for the rural economy considering that more than 70% of the population lives there. considering that much of the manufacturing industry is agri-based (for example.8% in the previous year (Thompson. 1). The economy in Swaziland has shifted from primary production such as agriculture. 2008. In an effort to reduce unemployment rate.Regarding the economic status. p. and the erosion of preferential treatment for Swaziland's exports of textile and sugar. as in the sugar-refining. Swaziland established an organization called Swaziland Investment Promotion Authority (SIPA) whose objective among other things is to 14 . However. 2009). the slow pace of economic reforms in Swaziland has worsened the investment climate. the country continues to rely heavily on the Southern African Customs Union (SACU) receipts that account for more than 50% of the country’s revenue (Bench Marks Foundations. Swaziland has been experiencing declining economic growth rates. etc. 2008). On revenue. The Gross Domestic Product for the year 2007/8 is estimated to have an increase of 3. construction.) and tertiary production (public and private sectors). Swaziland is classified as a lower middle income country (IMF. a shrinking industrial base as well as a drop in the level of foreign direct investment resulting in increased unemployment rates. In Swaziland both the economic and fiscal policy environments and regulatory frameworks are enabling and supportive as the Government has embarked on a broad based strategy for increased job creation as a strategy for poverty reduction for which there are distinct targets to be realized by 2022 (Bench Marks Foundations.5% as compared to 2. Bench Marks Foundations (2009) concluded that despite the persistent drought conditions agriculture still accounts for a sizeable contribution towards the country’s GDP. 2009).
2008). labour unions and the international community. The major function of this organization is to promote and protect the interests of its members and to encourage industrial harmony. a two chamber parliament and a cabinet of ministers headed by a Prime Minister. which among other things allow that workers can organize themselves into workers organizations. 2009). 2. productivity and prosperity for all (Thompson. 2008). known as the Federation of Swaziland Employers and Chamber of Commerce (FSE&CC) that services registered businesses of all different types of business. Therefore workers from all banking industry in Swaziland are affiliated to the umbrella unions which is the Swaziland Federation of Trade Unions (SFTU) and the Swaziland Federation of Labour (SFL) (Bench Marks Foundation. The central government and local government systems follow the western 15 . and regional structures known as Tinkhundla (constituencies). local government. The country is a monarchy headed by a King who presides over two political systems that co-exist.facilitate the entire process of establishing business operations for new investors as well as establishing companies wishing to expand or open new operations (SIPA. Local government applies to the administration of urban areas. and other members of SADC (SIPA. Lesotho Botswana. The UNDP (2006) reports that there is a Swazi National Council that advises the king on matters regulated by Swazi law and custom and connected with Swazi traditions and culture.3 Employment and Working Conditions The rights of workers in Swaziland are governed by an Employment and Industrial Relations Acts. whiles the Tinkhundla system. whilst there is also a Government comprising a judiciary. 2009). Mozambique. This organization is recognized by businesses. However. cover 250 chiefdoms grouped into 55 constituencies. Swaziland also has an organization for employers.4 Political Climate Swaziland is a unitary sovereign Kingdom that has maintained a strong economic and trading links with neighbouring countries that include: South Africa. 2. The system of governance in the country has three tiers: national government. appointed by the King.
based on the principle of regional decentralized state power. drafting of a new constitution. 16 . In appreciation of the CSR initiatives by companies. and measures to improve human rights. sustainable growth and improvement in the quality of life in Swaziland (African Development Bank. with rights of a legal persona. strengthening of anticorruption measures. In terms of governance in the country. 2005). the government of Swaziland is also calling upon the business community to assist in the challenges faced by the country. (SIPA. institutional. Among other legal frameworks. that governments sometimes recognize that without the help of business it will not able to provide the much needed solutions to the problems faced by society. Corporate Tax. these reforms will aid in the poverty reduction. with powers to sue and be sued. Swaziland government has initiated several legal. while Swazi customary law governs the traditional structures (African Development Bank. SIPA (2009) reveal that government is giving tax rebates of 150% of the costs of training employees. financial.5 Government Incentives to Companies for CSR initiatives As it was observed by Moon (2004). public sector management reforms. all companies operating in Swaziland are governed by. the Industrial Relations Act of 2000. All business enterprises are legally incorporate under the Companies Act of 1912. accountability. Swaziland is an independent sovereign Kingdom that is governed through a system that blends the Swazi traditional system with the modern system. The country operates a system of governance that is a product of two influences: the traditional system and western models of governance. It is expected that if implemented. Tax Administration. The dualism that characterizes the political governance system also permeates the legal system. with the King at the head of both systems (African Development Bank. 2005). Swaziland National Provident Fund. and Sales Tax. where Roman-Dutch law co-exists with traditional law. fiscal restructuring. 2. 2009). and constitutional reforms to improve governance.model. Wages Act of 1964. though in situations where there is a conflict. Workmen’s Compensation Act of 1983. while maintaining a unitary form of state organization. Swaziland has an independent judicial system that ensures protection of property and individual rights. Amongst others these initiatives include. Personal Tax. 2005). Tax Laws. and transparency across the public sector and civil services. 2008). the Roman-Dutch is deemed superior (Thompson. human capital development.
The total value of the contribution of this sector to the Gross Domestic Product (GDP) is based on the total value of loans extended by financial institutions. Ned Bank and 17 . Recently there has been a mushrooming of micro lenders. The banking sector is one of the most competitive sectors of the economy of Swaziland. three commercial banks. The entrance of more players into the financial sector is an indication of its profitability (SITF. which result in the victimization of trade union militants and low pay that contravenes Swaziland’s minimum wage laws (WSWS. a company nominated to be very crucial for development of the country. which has made competition to be even tighter. Fig (2005) describe it as fear by governments that companies will run away and result in loss of jobs.6 The Banking Industry in Swaziland Banks play an important role in the overall development of the country. The three banks (Standard Bank. First National Bank. According to the Swaziland International Traded Fair (SITF) (2008). the government is sometimes very lenient on enforcement of some laws to which companies have to comply as they do business in the country. The failure of government to enforce the laws. Ned Bank. Apart from that. 2. this sector has experienced a substantial growth both in terms of revenue and the variety of products and services offered. The performance of the banking sector is critical for the economy of Swaziland.Again.9% in 2004 to 9. 2009). which is in the process of economic transition (African Development Bank. Over the years. This include laws on environmental issues as well as labour laws. 2008). is given a minimum tax rate of 10% for a period of ten years on withholding taxes (SIPA. 2005). 2008). but the country has not yet produced a CSR policy to guide businesses on their CSR initiatives in Swaziland. the current economic downturn has impacted negatively on the sector and could greatly affect its growth. and Swazi Bank (Swaziland Development and Savings Bank)) operating in Swaziland.9% in 2005. one development bank and one building society. there has been an increased in the contribution by the banking and finance sector from 6. with cabinet approval. However. Currently there are four banks (Standard Bank. Although the Swaziland government fully support the CSR activities and expects companies to be involved in CSR activities. The financial sector is among the key contributors to the country’s economic growth.
First National Bank) are majority owned by banks based in the Republic of South Africa. Two of the commercial banks have minority Swazi Government participation (African Development Bank, 2005). However, the regulation and monitoring of commercial banks and other financial Institutions is done by the Central Bank of Swaziland (Central Bank, 2007). The commercial banks are licensed in terms of the Financial Institutions (Consolidation) Order, 1975 whilst the Swaziland Development and Savings Bank (SDSB) was established under the terms of the Swaziland Development and Savings Bank Order 1973. The SDSB is wholly owned by the government of Swaziland, and the Swazi Government guarantees its deposits. Housing finance needs in Swaziland are mainly provided by the building society, which is registered in terms of the Building Societies Act of 1962 (African Development Bank, 2005)
Ideally, banks with a cash surplus can invest in an array of assets that include placements with deficit banking institutions, placement with the central bank under its open market operations or purchase of short-term securities. In the case of Swaziland, the financial market is both small and shallow due to a number of factors, which include the absence of a large market for securities. In the absence of adequate investment instruments, combined with persistent and continuous excess liquidity in the domestic banking system, banks have traditionally looked towards the South African markets to manage their liquidity (Langa, 2001).
2.7 Chapter Summary This chapter gave a brief description of Swaziland in terms of its location within Southern Africa, highlighting critical information about the population in Swaziland, it political status, economic situation, and the social aspect of the country. The chapter also discussed the challenges currently facing Swaziland and highlighting the efforts by government to ensure that the challenges are addressed accordingly, as revealed by African Development Bank (2005). The issue of governance has also been discussed, looking at how Swaziland is governed in order to ensure peace and stability in the country. Finally, it looked at the banking industry in Swaziland, with special attention on the environment under which the banks operate.
3.0 Introduction Business enterprises are expected to protect both market value and social value by creating innovative new business models, investment strategies, and partnerships aimed at harnessing the core competencies, resources and problem solving skills of private enterprises. Ensuring efficient markets and good governance, has to do with overcoming bad governance which includes corruption, failed states and conflicts, improving weak governance which result from inadequate public capacity and administrative and institutional capacity to serve citizen’s needs (Nelson, 2006).
Today business leaders face lots of pressure and expectations as they are being called upon to engage with activists and analysts to manage social and environmental risks as well as markets and political risks, to be accountable for their non-financial and financial performance and to cooperate as well as compete often with different issues ranging from HIV/AIDS to climate change. The pressure is exerted by regulators, investors, consumers, trade unions, and NGOs to deliver outstanding performance, not only in terms of competitiveness, profitability, and market growth but also in their corporate governance and corporate responsibility. This chapter looks at the development of CSR, definition of CSR, and with the use of literature it also explains the concept of CSR. Finally, it looks at CSR in the context, how it is positioned in Africa, then in Swaziland.
3.1 The Development of Corporate Social Responsibility There is an impressive history associated with the evolution of the concept and definition of corporate social responsibility (CSR). One of the pioneering aspects of corporate social responsibility was corporate philanthropy, whereby some philanthropists were pursuing their charitable activities as individuals not on behalf of their corporations (Cochran, 2007). The
philanthropy by corporations can be traced back from 1953, where corporations make philanthropic contributions that would improve the overall health of the larger society (Cochran, 2007). The year 1953 marked the modern era of CSR, of which its definitions expanded during the 1960s and proliferated during the 1970s. In the 1980s, there were fewer new definitions, more empirical research, and alternative themes began to mature (Carroll, 1999).
Corporate social responsibility has been a topic of academic study for several decades, and the concept itself has been in use in the United States since the mid-1970s (Wood, 1991). However, the conceptual developments have not been systematically integrated with one another, but have been treated as free-standing, absolutely competing ideas. Therefore, an immense and diverse field of research and theory has been generated, but there is currently no means for assessing the relevance of all this work. The concept of corporate social responsibility, however, can provide a coherent framework for the field of business and society (Wood, 1991).
However, the idea of corporate social responsibility is sharply criticized by Friedman (1970), who claimed that business has only one responsibility, to use its resources and engage in activities that have been designed to increase its profits so long as it operates within the rules guiding the business. Nevertheless, the critics by Friedman (1970) have been viewed by many researchers as a narrow perspective of CSR since it is only concerned about economic and legal responsibilities. Currently, both the business and academics have the notion that business organizations should go beyond maximizing profits and legal expectations (Scherer & Palazzo, 2008), but know that their responsibilities extends from economic through to legal, ethical, and philanthropic as suggested by Carroll (1979).
3.1.1 Definition of Corporate Social Responsibility A clear and agreed upon definition of CSR is yet to be produced by literature as currently there is uncertainty both on corporate and academics on how CSR should be defined (Dahlsrud, 2006). There are now thousands of articles and reports on CSR from academics, corporations, consultants, the media, NGOs and government departments; there are numerous conferences, books, journals and magazines on the subject (Crane et al, 2008, p. 4-5). Much as there is lots of
one that puts more emphasis on the voluntary and explicit elements of CSR when saying it is “a concept whereby companies integrate social and environmental concerns in their business operations and in their interaction with their stakeholders on a voluntary basis. 2000. other agencies) stakeholders. Ever since the term was first used. 2009). investors) and external (public institutions. However. ethical and discretionary / philanthropic expectations that the society has of the business organization at a given point in time (Malan. The lack of consensus over CSR reflects the internal complexity in the CSR itself. 21 . CSR would be defined as: the commitment by business to behave ethically and contribute to economic development while improving the quality of life of the workforce and their families as well as the local community and society at large (Holme & Watts. community members. that alone tells us little about what actual practices might constitute CSR. 2008). Setting the boundaries for how those costs and benefits are managed forms part of business policy and strategy and partly a question of public governance. Though CSR may be defined in terms of societal or stakeholder expectations. The summit argued that organizations’ social responsibilities would be viewed quite differently in the coming years because the expectations of societies also change over time.research conducted on CSR. Therefore. shareholders. legal. For the purpose of this study. 8). CSR encompasses the economic. civil society groups. but still there is no widely accepted definition of CSR. Fox et al (2002) looked at corporate social responsibility as a process at the centre of managing the costs and benefits of business activity to both internal (workers.” The WBCSD (2001) considered CSR as a basic concept that is always being redefined to serve the changing needs and times. The EU Commission (2001) gave a different definition of CSR. but Jackson (2009) argue that. p. debates have existed regarding its meaning and key elements (Jackson.
2007). Therefore companies should integrate corporate social concerns into the business strategy (WBCSD. for example. It has been mentioned that it may not be possible to achieve the MDGs unless businesses of all sizes engage fully in bringing their skills. and governments based in industrial countries. 2006). At conceptual level. it is not easy to get objective. consumers. business and tax avoidance.2 Understanding the Concept of Corporate Social Responsibility 3. CSR will remain useful because it provides space for a higher level activity in which the boundaries of business obligation to the society can be examined. more embedded within the organization. and economic development power to partnerships with NGOs and governments (World Bank. In a number of cases it is difficult. inadequate education and natural disasters (Desmond. CSR is increasingly breaking up into a series of sub-topics which include: business and human rights. Stakeholders in developing countries have often been objects of CSR initiatives rather than active participants shaping the basic terms of the debate. stakeholders sometimes have no choice but trust that companies are telling the truth (Vehkapera. In this regard. 2004). comparable and correct information in order to make judgments about a company’s level of CSR. Corporate Social Responsibility has to be clearly understood and practiced at operational level and at conceptual level. CSR needs to be localized so that it becomes more manageable. illness. Therefore. and better shaped by the interest of the organization on the ground. CSR agenda to date is largely shaped by multinational corporations. Ward and Smith (2006) observed that at operational level.2.3. resources. 2001) 22 . At both levels. and sometimes even impossible to know if companies are acting in such a responsible way they are announcing.1 The Responsibilities of Business The business community has a key role to play in assisting solve the societal problems. Furthermore. business and corruption. which include poverty. tangible. investors. argued and refined.
Company’s involvement in CSR strengthens the brand image and reputation of the business. opinion leaders. their business would automatically act more responsibly. their attitudes to stakeholders positively and are able to respond quickly to stakeholder concerns. 3. 2007). Baron (2001) argued that CSR in companies can be motivated by profit maximization. If CSR is properly embedded into the company employees. altruism. and customers. 2004). through multinationals or local business operations or a combination therein. can bring entrepreneurial and management skills to the solution for societal problems. and there is general agreement that corporate reputations contribute significantly to the long run competitive advantages of organizations (Brammer & Pavelin. individual business organizations should not seek to address all development concerns and instead should focus on areas where they could make an impact.2.The private sector. and threats by the activist. He stressed that both motivation and performance are required for actions to receive the CSR label. It is often the smaller-scale innovative approach that provides workable solutions to the much larger social or economic problem (Wambura. • To derive benefits accruing to employees through opportunities to volunteer and render public service. The primary reasons for companies to engage in CSR are highlighted in Roy (2004) to include: • Corporate reputation—seeking to improve this with local communities. 23 . However. Business associations can play an important role in making sure that different initiatives tie in together in one set of comprehensive private sector efforts to promote sustainable development. Companies should also communicate their commitment and contributions to development activities (World Bank Institute. 2008). have a greater understanding of the risks in its environment and be able to strengthen its corporate reputation.2 Motivations for Corporate Social Responsibility It has been observed by Knox and Maklan (2004) that CSR programmes favourably enhance corporate reputation and to some extent could influence employee behaviour. As such.
and. Margolis et al (2007) argue that by collaborating with non-profits. employees. transportation. suppliers. • To build upon the capacity of NGOs and governments to provide the needed infrastructure such as adequate housing. and. BP and Shell) successfully changed their image by stressing their environmental and social initiatives. • To take advantage of direct marketing opportunities where citizenship activities can logically and openly tie into business interests. free market development. while some companies (e. which makes people more likely to pursue the company’s products and jobs. which open new sources of revenue. for companies with bad reputations that seem to be interested in changing their negative image through CSR activities (Yoon et al. build alliances with stakeholders shareholders. and. • To build a sustainable market presence over time by investing in the social infrastructure to ensure healthy and productive human resource capability. or to permit the company to expand without extensive oversight. and develop a positive relationship with consumers and other stakeholders.g. • To build effective partnerships between the government. in particular. public leaders.. Again. However. create a favorable corporate image. medical care. education and training and such services as potable water. Corporate social responsibility (CSR) activities have been used to address consumers’ social concerns. the same strategy has backfired for others such as Monsanto and Exxon (Yoon et al. 2006). Cochran (2007) also warns that if a firm has no competitive advantage 24 . It has also been noted that CSR is becoming increasingly important in the corporate world. sanitation. and healthy community environments for long-term. the company may strike upon unforeseen markets or innovative products. customers—gain important business management knowledge by better understanding the local operating environment. 2006). a company gains because the public develops a general impression that the company is a good citizen. In addition.• To establish business and community contacts. the private corporate sector When a company collaborates with non-profit organizations. NGOs.
and to buy products from a company simply because it supports charitable causes (Smith & Alcorn. 2006). CSR debate is associated with processes for formulating and implementing CSR policies as well as with mechanisms for stakeholder consultation. 3. and actions (Wood. Yoon et al (2006) argue that in some cases CSR activities have been adopted based on growing notion that consumers are willing to give incentives to socially responsible corporations. Wood (1991) suggests that business firms employ different processes of social responsiveness to address social problems. For example. operations. CSR activities and strategies can then vary from company to company and from industry to industry. However. However. it is likely that any investment it makes in that area will have little to no long-run impact. 1991). 1991). they also choose activities that are relevant to their interests. As companies engage in social responsibilities. However. At firm level. In line with this statement. 2008). corporations are asked to comply to the law and to even go beyond what is required by law because the CSR activities are much needed by the society (Scherer & Palazzo.2. if the system of law and the enforcement apparatus of the state are incomplete there would be a possibility of regulation gaps and implementation deficits which have to be filled and balanced by diligent managers with pro-social behavior and an aspiration to the common good (Scherer & Palazzo. on theoretical point of view. but its implementation may not necessarily be standardized. Rwabizambuga (2007) argued 25 . CSR strategies need to be responsive to the local stakeholders and to national policy and development agendas in the country where the company is operating (World Bank.in a given philanthropic area. 2008). In the event law enforcement is weak or there is none at all. consumers are willing to pay higher prices for products made by an ethical company to switch brands to support companies that make donations to nonprofit organizations.3 Implementation of Corporate Social Responsibility Much as the concept of CSR is being pushed globally by different organizations and multinational companies. In many countries governments have legislations through which they enforce CSR.
at the same time espouse arguments that are highly skeptical of it. it may be specific to the requirements of the organization or may encompass transferable skills that can be used by the individual in different organizational settings. and is subject to free rider effects by other organizations. Sharp (2006) argue that usually company employees who were trained in totally different fields find themselves being hard pressed into taking responsibility for CSR. 26 . Training of employees may benefit the individual and/or the organization. Since training benefits the individual as well as the organization. Although most firms already have CSR policies in place but the role of stakeholders involved in CSR processes within the organization is generally not well explored (Rwabizambuga. corporate participation in training may be seen as both an investment and as a socially responsible activity (Brammer et al. Employees should be made to fully participate in the CSR activities right from formulation of policies up to its implementation (Brammer et al. discourses at the same time. Regarding employee involvement. like other people. retention and motivation of employees because they are likely to identify strongly with positive organizational values. 2006). provided they keep separate the contexts in which each is deployed as a means to interpret the world (Sharp. and even diametrically opposing. one must expect to find CSR practitioners who adhere to the business case for CSR and. 2007). 2007). CSR practitioners are.that stakeholder involvement opens a new space for external involvement in the firm’s CSR policy planning and strategic implementation processes. 2007). Logically. corporate social performance may be expected to contribute positively to the attraction. According to social identity theory. public organizations should try to concentrate on creating a favourable framework that would promote competitiveness in businesses involved in CSR (Murillo & Lozano. and they bring many diverse kinds of competence to bear on their new tasks. For effective implementation of CSR. able to work within two or more different. 2006). Employee perceptions of corporate social responsibility have a major impact on organizational commitment and total implementation of the firm’s programs.
communities. and suppliers: secondary stakeholders such as non-governmental organizations (NGOs). Therefore if CSR is well integrated and analyzed with the frameworks for the core business. and governments. 2002). customers.Bondy (2008) warns that there is increasing power in CSR implementation. and competitive advantage (Porter & Kramer. employees. Both monetary 27 . 2006). The pressure come as a result of business scandals that have shaken the public confidence in private corporations. During the implementation.3 Corporate Social Responsibility in Context Business firms in various contexts. The theory of modern competitive strategy concludes that strategies must be tailored to the structure and dynamics of the market environment and to the competencies of the business (Baron. Based on the pressure companies go through. innovation. The pressures are from: primary stakeholders such as owners. Therefore power can be an impediment to furthering CSR strategy and activities at the individual and organizational level. Banerjee (2001) advised that the integration strategies can be more effective if done at different levels. values. activists. Baron (1995) argued that CSR can be used for strategic purposes for the business that would integrate market and nonmarket environment of the business so that it can be more competitive. 2002). now making stakeholders to enforce the principles of accountability. Many researchers support the premise that ethics. Supporting this idea. are today under a lot of pressure to rebuild public trust and stay competitive in a global economy (Jamali. Waddock et al (2002). 1995). but also its donations of employee time. and integrity in all facets of business relationships (Waddock et al. 2007). and thus can attract opportunistic actors with little interest in realizing the benefits of CSR for the company and its stakeholders. it can be a source of opportunity. integrity and responsibility are required in the modern workplace (Joyner & Payne. and general societal trends and institutional forces. 3. stresses that there is a positive relationship between responsible corporate practices and corporate financial performance. This term is designed to include not just a bank's donations of money and its community reinvestment act-related activities. it is evidenced that companies across the world are involved in CSR for or a variety of reasons and thus charitable giving has been redefined as CSR. However. and thus it has potential to offer personal power to those officers involved. transparency.
it has been noted that much as CSR is claimed to be universal. Carroll (1991) then presented CSR model in a pyramid as shown in figure 1. legal. 2006).donations and donations of employee time should be tracked in order to accurately assess the bank's contribution to either an organization or community issue (Sullivan & Mambrino. ethical. 28 . legal. Weyzig (2006) argue that though CSR developments are mainly driven by global developments. Discretionary Responsibilities Ethical Responsibilities Legal Responsibilities Economic Responsibilities Figure 2: Carroll’s (1991) CSR Pyramid However. In 1991. However. 2006). this CSR model by Carroll has been criticized. 2008). and discretionary expectations that society has of business organizations at a given point in time. Holme and Watts (2000) are stressing that the conception of CSR differs across cultures. The local dimension strongly influences priority issues and operational aspects of CSR implementation (Weyzig. Carroll (1979) observed that social responsibility of business encompasses the economic. ethical and philanthropic responsibilities respectively. that it cannot be applicable in other contexts like Africa as it has only been used in the American context (Visser. but it is shaped by context-specific factors. The pyramid model shows CSR with its four levels indicating the relative importance of economic.
they are obliged to exercise such discretion as is available to them. In the long run. toward socially responsible outcomes. Within every domain of corporate social responsibility. Wood (1991. The society tends to expect companies to be involved in CSR activities regardless of the economic conditions at a given point in time.CSR considers both external and internal of a business. but also stress that some organizations have already integrated CSR into their strategies and have made a commitment to both people and the planet. 29 . Employees may be expected to base their opinions of external CSR on internal and external information sources including the media and their personal experience within the company. and the principles are: a) The Principle of Legitimacy: Society grants legitimacy and power to business. c) The Principle of Managerial Discretion: Managers are moral actors. The external CSR encompasses philanthropy and community contributions. and also reflects the way in which the firm interacts with the physical environment and its ethical stance towards consumers and other external stakeholders (Carroll. p 696) provides some principles of Corporate Social Responsibility to guide in the understanding of the widely debated CSR. 1979). 1979). Tanguy et al (2009) argue that CSR activities are still very important when it comes to building a powerful brand and creating a strong emotional bond between the consumer and the brand. Tanguy et al (2009) predict that CSR budgets will be decreased temporarily. In relation to the economic crisis. b) The Principle of Public Responsibility: Businesses are responsible for outcomes related to their primary and secondary areas of involvement with society. Since CSR is concerned with those actions that go beyond the legal minimum. corporate contributions in this field are largely discretionary (Carroll. those who do not use power in a manner which society considers responsible will tend to lose it. They don't want to risk damaging their identity as an ethical business.
relying instead on socialization of the economies in which highly inefficient public enterprises are rusting (Roy. the state has not been willing to confront deviant firms. 2006).3.1 Corporate Social Responsibility in Africa Companies are confronted with several dilemmas in Africa. energy and chemical sectors have been reluctant to comply with new legislation. Lock (2006) stresses that among other things. all of which hinder potential investors from engaging more forcefully in the local market (Pomering & Dolnicar. In Africa. 2004). resulting in severe poverty. Even with South Africa. particularly the sub-Saharan Region. many initiatives are being pushed by NGOs and international organizations like World Bank and International Bar Association (IBA). Such dilemmas raise questions as to whether the CSR being practiced is relevant to the African context (Visser et al. some of the firms especially those in the minerals. there are many African nations that have serious 30 . with an economic and social focus (Lock. HIV/AIDS. Africa. which have established special cross-cutting bodies to develop and improve the implementation of CSR principles across business enterprises generally and in specific sectors (Lock. 2006). which pertain to the question of how to balance the desire for global integration with the need for local responsiveness.3. external economic risk and financial market risk. As such. 2009). together with Kenya and Nigeria. The concept of CSR in many African countries is pretty new. and also notable is that the CSR issue is increasingly raised in the broader context of protecting human rights. drought. on the grounds that stricter enforcement might lead to job losses or disinvestment (Fig. The capacity and will to enforce legislations to companies has not been that strong in Africa. are still having challenges with bureaucracy. with the knowledge that enforcement is weak. Simultaneously. Comparing with countries outside Africa. 2005). A number of countries in Africa are having a variety of problems and challenges that work against their economic development. Pomering and Dolnicar (2009) argue that Africa remains one of the most under-banked regions in the world. wars and inherent corruption are viewed as perpetrators of poverty in the developing economies. 2006). Governments in many nations have not sought to grow the private sector. In addition. suffers from the lack of corporate social responsibility investments.
foreign or local. and poorly educated populations (Roy. These countries have relatively small markets. Visser (2006) then suggests that Carroll’s (1979) model of CSR needs reordering for the African context. Visser (2006) argues that the relative priorities of CSR in Africa deviate from those in the US. low personal income. Supporting this idea. by having the philanthropic responsibilities take a second highest priority instead of the legal responsibilities. Figure 2 shows the proposed rearrangement. 31 . Figure 3: Visser’s African CSR Pyramid Ethical Responsibilities Legal Responsibilities Philanthropic Responsibilities Economic Responsibilities The reordering of the priorities in the CSR model by Visser (2006) is in line with the idea of localizing CSR for each particular country or situation (World Bank.deficiencies in their ability to attract any kind of private investment. the CSR concept and practices being implemented in developed countries may have to be adjusted to suit the African context in order to get the desired results. 2006). few resources. 2004) In view of the diverse issues and challenges in Africa.
Although the term (CSR) is relatively new. 2003). Savvy CSI programmes on the part of banks and many other institutions have already proven to be an excellent means of promoting brand loyalty in a country where more consumers are increasingly looking at businesses to assist solve the economic and social problems of the country (Irwin. 2003). as it has been observed on the increase in the number of businesses making donations to different communities and organizations involved in assisting the disadvantaged communities.Companies that have embraced corporate social responsibility (CSR) and corporate social investment (CSI) initiatives have managed to differentiate their brands in an increasingly competitive marketplace where the consumer is becoming more acutely sensitive to companies’ social roles (Irwin. 3. local and international agencies (NGOs). the concept of CSR is generally 32 . In the case of Southern Africa companies. Since CSR is relatively new in Swaziland. is relatively new in the Southern Africa (Irwin. especially South Africa and Kenya. there is need to have a deeper understanding of the CSR as it has been suggested that culture may have an important influence on CSR priorities (Visser.2 Corporate Social Responsibility in Swaziland Corporate Social Responsibility is an emerging and exciting concept in Swaziland that has drawn the attention of many businesses. Though the concept of using these CSI initiatives to help build a brand or provide support for a marketing campaign.3. 2003). However. the level of perception about CSR is becoming progressively high among the businesses in Swaziland. government bodies. Currently. it has not yet drawn the attention of the academics to have some research articles published about CSR in the country. government capacity for enforcement remains a serious limitation and reduces the effectiveness of legislation as a driver for CSR. media and many other relevant players including the society. but the notion that business has responsibilities to society is well established in the people of Swaziland. but Visser (2005) argue that over the past ten years some countries in Africa have seen significant progress in strengthening the human rights and CSR aspects of their legislation. 2006). Generally. South African brand managers are discovering that the savvy use of CSI policies is making them more competitive and giving their brands high local profile.
the World Bank (2006) stresses that though foreign companies may bring their CSR strategies from the parent company. and government institutions. Some companies’ CSR activities include building schools and operating clinics staffed by doctors. most of the activities are more philanthropic which include giving grants to community projects or activities. providing a 24-hour free medical service for employees and their families.associated with philanthropy. In the past few years. but these companies provide a benchmark against which companies in Swaziland develop and measure their CSR activities. There seems like many companies perceive CSR as strategic to their business. sisters and nursing assistants. having companies make donations to help alleviate social problems. and also providing a service to the surrounding communities (Sucre – Ethique. However. However. NGOs. 2007). Though it is not known as to what extent do they import and import and implement their CSR initiatives in the country. In Swaziland. a number of companies are involved in the fight against the pandemic by training their employees to become peer educators and counselors not only to the employees but the surrounding communities as well. and is mainly driven by the Chief Executive Officer (CEO) who view CSR to be having a positive effect on the company’s financial performance as well as on the company’s relationship with government (UNDP. 2004). These 33 . while the civil society organizations campaigning against poor labour practices and environmentally damaging production processes (Menne. both national and multinational enterprises. CSR activities in Swaziland are to a large extent being influenced by the media. The media is able to publicize all the most of the social ills experience by the society. In line with the observation by UNDP (2007). there are companies that are fully involved in the CSR activities. However. CSR is often associated with Medium to Large Enterprises (SME). Swaziland has been doing well in attracting foreign investors into the country who come with their already established CSR practices. informed consumers. who are also believed to be performing well in the business. 2007. Since HIV/AIDS is currently the number one social problem in Swaziland. with the justification that businesses should also give back or plough back to the societies in which they operate. but there is a need to nationalize the CSR so to be responsive to local needs.
4 Corporate Social Responsibility for Banking Industry The financial institutions are not exempted from the CSR initiates as they are also need to behave according to the expectations of the society. a prerequisite for implementing a successful employee involvement programme is that all the employees. For banks to have good CSR programme. Sullivan & Mambrino (2008) argue that banks still have an opportunity to become leaders in all aspects of CSR and to reinvest in the communities in which they operate not only through lending and donations but through employee action and service. 2008). the term CSR is designed to include not just a bank's donations of money and its community reinvestment related activities. However. The amount of time spent by consumers volunteering for causes has increased significantly over the past years (Sullivan & Mambrino. the banking and finance industry has been leading other industry sectors in monetary donations (Sullivan & Mambrino.companies not only developed social investment policies. Therefore CSR can help to attract and retain customers. but also its donations of employee time. Decker (2004) argue that when corporate social responsibility is conceptualized pragmatically as a response by businesses to society's concerns it acts as an element of structural change with implications for the strategies of firms and ultimately for industry structure. 2008). but they also sponsor specific social investment projects. industry specific aspects of CSR are important and governmental influences and financial regulation provides an added dimension to the impact of CSR on the financial services industry (Decker. the ability to point out various contributions to the community can go a long way in communicating the bank's commitment to the area. 2008). company executives and the board of directors should understand the strategy 34 . Corporate social responsibility is a vital part of the strategies of financial institutions of all sizes and can be an important differentiator for community banks as they seek to demonstrate their commitment to the communities they serve (Sullivan & Mambrino. employees need to be fully involved in the implementation of the CSR initiatives. 3. In that regard. In the past few years. 2004). However.
42). Get the buy-in not just of the CEO and the executive management team. • Sponsorship of community events: Donating dollars as well as employee and marketing resources to events run by local organizations. In addition. not all banks approach CSR in the same way (Sullivan & Mambrino. p. In the implementation of CSR. Nevertheless. a successful CSR program will coordinate bank activities across categories. • Employee volunteerism: Donations of employee hours to local organizations. However. they should remember that corporations cannot replace governments. p. Regardless of how the bank decides to define CSR. 2008. p. 35 . Hess and Warren (2008) had some critics on the way CSR initiatives was being implemented. and referred to it as the best practice. Therefore. and they include: 1.and the required actions to achieve the strategic objectives (Niyonzima. Sullivan and Mambrino (2008. As they try to respond to the pressure from social expectations. 2008). 2008. Sullivan and Mambrino (2008) address such concerns by providing the following CSR structure for banks. but also of the regional or branch managers who will be responsible for implementing the program in the branches. This includes both senior management and local management. questioning the sincerity of these activities and argue that some companies are just attempting to break off stakeholder pressures without providing a corresponding benefit to society. there are some common best practices to keep in mind when building your CSR program (Sullivan & Mambrino. as the definition of CSR itself can vary a great deal from bank to bank. even if these activities are not handled by a single group. 74). in contributing to the social welfare of the society (Banerjee. 2003). Malan (2008) emphasizes that CSR encompasses a number of expectations from the society which business should try to address through their CSR strategies. Involve management early on in the process. 41) observed that CSR in banks commonly involves one or more of the following elements: • Strategic giving: Monetary donations to local nonprofits.
4. Will CSR include both giving and volunteer coordination. will you only work with organizations in your footprint? With organizations that have national operations? Define the subject areas in which you feel your company should be most active. or will these two areas be handled separately? Will it include sustainability initiatives? How will it be aligned with CRA activities? 5. Survey employees to determine issues that are most important to them and find ways of aligning the bank’s CSR activities with the employee priorities. 36 . 7. Ensure that these definitions are clearly communicated not only to employees of the bank. For example. make sure that potential applicants understand this policy. 3. Marketing can be helpful with the communication of activities to both customers and to employees. Clearly communicate these parameters. Decide on the scope of the CSR committee's decision-making authority. Establish a CSR oversight committee and coordinate with marketing and with human resources.2. but to applicants for grants or other donations. Define the geographic area(s) on which your efforts will focus. Clearly define the parameters of any program. if the bank decides not to donate to the operating funds of local organizations. Allow employees to volunteer on company time. Encourage employees to be proactive. Set up an online forum where employees can post volunteer opportunities. How much authority will be delegated to local or regional management? Will the CSR committee manage the donations budget? 6. while human resources can be helpful in promoting employee involvement. Determine what "CSR" will encompass at your bank.
8. Formalize all requests for bank involvement. Bank must require written applications for donations of all kinds; grants, event sponsorship and others; and it should require that such applications be submitted to the bank well in advance.
9. Track program activities. Both monetary donations and donations of employee time should be properly tracked in order to accurately assess the bank's contribution to either an organization or an issue.
10. Create benchmarks and set goals. CSR programs take time to build, and without a goal to work towards; it can be hard to judge success.
It is imperative that any CSR program should align with the bank's strategy, mission and value proposition. If the bank emphasizes its local community involvement when marketing itself, then the bank's CSR activities should reinforce that message. A good CSR structure should be able to track both the money and hours donated, banks can continue to remain at the fore front of corporate social responsibility (Sullivan and Mambrino, 2008).
Since not much academic studies have been done on CSR by banking the industry in Southern Africa and Swaziland, this study then will make a valuable contribution to the literature on how the financial institutions in Swaziland handle CSR initiatives. Companies in the Southern Africa will also benefit from the study as it flags international practices on CSR.
3.5 Chapter Summary This chapter has discussed the concept of CSR in detail, drawing from literature to provide the overview on CSR issues. It has been revealed that the CSR concept has been pushed to many parts of the world, and it is widely accepted by both the business firms and society. However, World Bank (2006) argued that it yields better results when it has been localized. This was further strengthened by Matten and Moon (2008, p. 406) when arguing that CSR is “contextualized by national institutional frameworks, and therefore differs across countries”. This chapter has also noted that the concept of CSR is new in the developing countries especially in Africa, and there is a need to have more CSR studies in Africa, Swaziland in particular. Generally, this chapter covered issue that include: the development of CSR; the definition of CSR; understanding the concept of CSR in the context of responsibilities of business, motivation for CSR, implementation of CSR, CSR in Africa, CSR in Swaziland, and then CSR for banking industry.
4.0 Introduction This chapter will provide a detailed overview of the methodology and approaches adopted when carrying out the study. This is a qualitative study which involves commercial banks and NGOs in Swaziland as part of the sample, and the data is collected using telephone interviews. Therefore the chapter describes the design of the study, the qualitative approach, selection of organizations, profile of organizations, development of interview questions, data collection, and data analysis.
4.1 Research Design This research is a case study survey to determine CSR practices by four commercial banks in Swaziland, and the challenges they face in the implementation of their CSR. The study is exploratory in nature, and the method of data collection was in depth interview to ascertain the practices, procedures, management systems and policies, employee perception and understanding of CSR, and the influence of banks’ CSR on the clients’ choice of banks.
The study used an in-depth telephone interviews with semi-structured questions as a mode for collecting data, which was flexible so that other avenues emerging during the interviews could also be considered, while the mode of data collection was telephone interviews. The researcher was aware of the benefits and the challenges of using telephone interview method. The primary reason for choosing telephone interviews as opposed to other data collection method was that managers are more likely to agree to be interviewed, rather than complete a questionnaire (Saunders et al, 2003, p. 250) especially when the interview is on an interesting topic also relevant to their work. In addition, Musselwhite et al (2007) argue that much as telephone interview may have some challenges, but it also has lots of benefits which makes it to be an effective method for collecting data. Among other benefits of telephone interviews was that of being more costs-effective or
practices and policies guiding banks in Swaziland in the implementation of CSR To identify the driving forces for banks in Swaziland to engage in CSR activities To establish the effect of CSR on client choice of banks. 2003). the qualitative method was viewed by the researcher to be the most appropriate one because it allows the use of open-ended questions and probing. giving participants the opportunity to respond in their own words. in this survey the researcher noted these challenges of telephone interviews and made sure they are well taken care of. Telephone interviews also come with challenges which include: maintaining clear communication with the respondents and limitations on interview length. it is likely that an even higher share of surveys will be by telephone in the future (Cooper and Schindler. encouraging them to elaborate on their answers. p.economical in terms of transport costs and time spent travelling from Malaysia to Swaziland and in country travelling from one organization to another. 2003. Open-ended questions have the ability to evoke responses that are: meaningful and culturally salient to the participant. The study was designed to: To determine procedures. resulting in respondents not giving out their own views and opinion on the issue. unanticipated by the researcher. 4. rather than forcing them to choose from fixed responses. this research will just be a snapshot of the CSR practices in Swaziland because time would not allow a longitudinal type of a study which takes a much longer time than this dissertation. However.2 Qualitative Approach In this study. and to keep participants involved (Cooper and Schindler. Though telephone interview has its own challenges. However. rich and explanatory in nature The qualitative method also allows the researcher the flexibility to probe initial participant responses. but given the growing costs and difficulties of personal interviews. due to time factor. 338). However. To investigate the perceptions and understanding of CSR concept by bank employees. the researcher must listen 40 .
3 Selection of Organizations The basic idea of sampling is to select a representation of the population. Swaziland has a total of four commercial banks. The reason for choosing NGOs among the multitudes of bank clients was the fact that NGOs are also stakeholders in the banks’ CSR activities and thus they may have more information on the CSR by banks. In this case. and from the list. 2003). ten organizations were selected. Sampling gives a valid alternative to census when budget and time constraint does not allow the researcher to survey the whole population (Saunders et al. The sample was to comprise of commercial banks (where managers and junior employees were to be selected) and banks clients (which were NGOs) in Swaziland. A sampling frame was obtained from the Coordinating Assembly of NGOs (CANGO). In addition these organizations needed to have a wider coverage in the country. 2003). In this research. engage with them according to their individual personalities and styles. This study involved four commercial banks. It was intended that the sample would be heterogeneous so to provide a fair representation of the population. a non-random (also known as non-probability) sampling technique was used to obtain the sample. The list of selected organizations was again confirmed with 41 . In the case of banks. they had to be a commercial bank fully operating in Swaziland and being involved in CSR initiatives. As the criteria for the sample was predefined. and a total of ten bank clients in a form of NonGovernmental Organizations. The judgment sampling allowed the researcher to choose only the commercial banks and organizations that conformed to the required criterion of being a registered organization having a bank account with any of the banks in Swaziland. which gave a list of 70 NGOs registered in Swaziland and were also members of CANGO. This technique was selected as it met the sampling objectives as recommended by Saunders et al (2003). purposive sampling was implemented.carefully to what respondents say. with several bank branches in the different towns. all the commercial banks were picked for the study because the number was of manageable size. from which a conclusion can be drawn and be generalized to the entire population (Cooper and Schindler. 4.
The group has one of the biggest single networks of banking services in Africa. and ten respondents from the ten bank clients (NGOs) selected. 4. Through this network we offer a wide range of banking products and services which are delivered through more than 1 000 points of representation in 17 African countries (including Swaziland). Standard Bank Swaziland has ten branches and three points of representation service the personal. The bank offers a wide range of financial products and services in the markets of.4. Standard Bank Swaziland was founded in 1988 as Union Bank. especially having a bigger geographical coverage in the country. When selecting the respondents. the study had ten respondents from the four banks. which is based in South Africa and listed on the Johannesburg Securities Exchange. personal.CANGO if they really meet the selection criterion. in banks with large number of employees. and corporate investment. The selection of respondents from each of the selected banks was such that it would be the bank manager or any bank official responsible for CSR initiatives and one junior employee.4 Profile for selected organizations 4. 42 . However. business. We are active in international and cross-border transactions and in those areas liaise closely with Standard Bank Corporate and Investment Banking and Standard Bank London. Standard Bank Group Limited.1The Commercial Banks a) Standard Bank Swaziland Standard Bank Swaziland is proudly part of one of Africa's leading banking and financial services groups. It changed its name to Standard Bank Swaziland on 2 June 1997. Variations in the selection of the organizations were avoided in order to eliminate biasness in the study. commercial and corporate markets. the researcher selected two junior employees participate in the study. small business. The bank is also involved in CSR initiatives in which they annually commit 1% of profit after tax to support CSR programmes.
Similarly board and committee structures are. business. nationally and beyond. The bank procures most of its goods and services through its South Africa operation in line with Group procurement guidelines. First Rand limited. where practical. It has a total number of 233 employees. d) Swazi bank It was established in 1965 as a Swazi Credit and development bank. 43 . Today the Bank trades as Swazi Bank and its mandate has swiftly moved to incorporate development finance and other banking solutions to meet the nation’s demands. personal.b) Ned bank Swaziland This is an international bank that is a subsidiary of the Ned bank Group of South Africa. Ned bank gained its presence in Swaziland following their acquisition of Standard Chartered bank’s local majority shareholding in January 1997. and are providing services to 63 000 customers ranging from previously unbanked consumers to the largest listed corporate and public sector clients. established in 1995. and corporate investment. As a subsidiary of the Nedbank group. In addition to their wide range of financial services they provide to their customers. a parastatal that is wholly owned by Government. FNB is listed on the JSE through their holding company. has become a major player in the financial sector and continues to generate profits despite the highly risky mandate it has. In addition to the core business of the bank. The bank has ten branches located across the country. The bank offers a wide range of financial products and services in the markets of. Nedbank Swaziland has seven branches and a total of 226 employees. but as time goes own it incorporated a number of banking solutions. the bank is also has a CSR programme in which they annually commit 1% of profit after tax to support CSR programmes. aligned to the Nedbank Group Board structures. Swazi Bank. c) First National bank (FNB) First National Bank (FNB) Swaziland is a financial services entity. the bank is also involved in CSR initiatives. Nedbank Swaziland has adopted the Nedbank Group policies to ensure consistent group-wide implementation and standards. The vision of the bank is to be the first choice provider of world class financial services.
4. In Swaziland the mandate if the organization is to prevent and reduce the impact of inappropriate environmental.the Golden Arrow Award in the Financial Institutions (Business Development) in Swaziland and a Bronze Award in the Business Sector: Banks in Swaziland. natural resources and sustainable development practices in Swaziland.In 2008. The bank offers a wide range of financial products and services in personal and business markets. The bank is also involved in CSR activities. Agricultural Production. and its mandate is to assist rural community people of Swaziland improve their quality of life. national and international partners and 44 . Yonge Nawe is a member of the Friends of the Earth International and in World Conservation Union. and it is a public interest membership based NonGovernmental Organization (NGO) that campaigns on issues of environment and sustainable development. Environmental Awareness. in an environmentally sustainable and socioeconomically acceptable manner. Their activities include: Raising public awareness of the appropriate uses of renewable energy. Gender. Yonge Nawe works with multiple groups. and HIV/AIDS b) Renewable Energy Association of Swaziland (REASWA) This is a small local NGO which was formed in 2002. Encouraging and facilitating renewable energy research and development c) Yonge Nawe (“You too must conserve") This organization was formed in 1993. Community Development. The mandate of REASWA is to promote the cost-effective use of renewable energy. PMR conferred two awards on SwaziBank . 4. LDS is involved in community development activities that include: Capacity Building. Disaster Preparedness.2 The Bank Clients (NGOs) a) Lutheran Development Services (LDS) This is one of the big local NGO that was formed in 1994.
advocate for environmental and socio-economic justice. organize & facilitate capacity building to her members. raising awareness on HIV/AIDS. d) Coordinating Assembly of NGOs (CANGO) CANGO is an umbrella organization of over 70 Non Governmental Organizations in Swaziland. Current programmes are geared towards building the capacity of civil society to engage policy. e) Africa Cooperative Action Trust (ACAT) – Lilima Swaziland This is one of the old local NGOs formed which started operating in Swaziland in 1982. The mandate of this organization is to empower. This organization was founded in 1983 initially. Tasks have also increased in accordance with the demands of member NGOs. Among other things this organization raise environmental awareness and activism in society for achieving sustainable development. 45 . The vision of CANGO is that the people of Swaziland taking charge of their lives in an environment devoid of poverty. advocate for policy and laws that guarantee good governance and equitable distribution of resources. In 2001. discrimination and socio-economic instability. CANGO embraced a strategic shift to play a key role in influencing the poverty environment in Swaziland. The major responsibility of CANGO is that of being a Secretariat to NGOs. promoting of savings and credit schemes. disease. capacity building for local community leaders. and being a link between NGOs and government or the public. and represent and act on behalf of the socio-economically disadvantaged in accessing environmental and socio-economic justice. gender and development. CANGO has developed into quite a strong Secretariat with an increased capacity. enable and equip disadvantaged rural people to improve and sustain their own quality of life spiritually and physically. ACAT is focusing on rural community development where they deal with issues that include: food security (training farmers on agricultural activities with emphasis on organic farming). enterprise development.networks.
and agricultural improvements. disability issues. This organization focuses on children in the rural communities of the country. In addition to being the secretariat of the churches. 46 . and their activities include: training and assisting on nutrition activities. This is an international organization which was established in 1987 in Swaziland. HIV/AIDS awareness raising. Our belief is that we must position ourselves in our country as the leading child rights based organization. developing clean drinking water and sanitation facilities. Their coverage is country wide. This organization has since increased its mandate to include community development activities. Save the Children Swaziland continually make sure that their work is child focused and child centred. and fight against HIV/AIDS. entrepreneurship. fighting for the rights of the child.f) World Vision Swaziland World Vision is a Christian humanitarian charity organization dedicated to working with children. it is now fully involved in rural development where they promote savings and credit schemes. h) Swaziland Conference of Churches This organization coordinates all the churches in protestant churches in Swaziland. Their activities include: child protection. advocating and ensuring that the concept of child rights is recognized and respected. and it was formed in 1929.Swaziland Save the Children Swaziland is a child focused development organization. and their communities worldwide to reach their full potential by tackling the causes of poverty and injustice. They are part of the International Save the Children Alliance. families. g) Save the Children . emergency and development issues. and they help disadvantaged children in the country. It is among the oldest NGOs in the country.
which were addressing two issues. The mandate of this organization in Swaziland include: conducting training and response to small-scale disasters and drought is also carried out and provides primary health care through its clinics.5 Development of Interview Questions The interview questions were systematically developed after reviewing relevant literature on CSR both internationally and in Swaziland. aimed at preventing and alleviating suffering and facilitating development to vulnerable people in accordance with the Fundamental Principles of the Red Cross and Red Crescent Societies. The questions were developed based on the four research questions of the study: a) What are the current CSR practices of the banks in Swaziland? b) Why do banks in Swaziland engage in CSR? c) How do the CSR practices of the banks affect the clients’ choice of banks in Swaziland? d) How are the bank’s CSR practices perceived by their employees? The interview questions were developed to have three sections (A. as well as with the prisons in the country. The whole of this section was directed to bank Manager responsible for CSR.i) Swaziland Association for Crime-Prevention & the Rehabilitation of Offenders (SACRO) SACRO is also a registered NGO in Swaziland. B and C). Section B had seven questions which were 47 . j) Baphalali Swaziland Red Cross Society The Swaziland Red Cross Society is a humanitarian organisation. growth monitoring. This organization was founded 1933. family planning and antenatal care. Section A had a total of 15 questions. whose mission is to work for the adoption of crime prevention strategies so as to reduce the amount of juvenile offenders. and The drivers of Corporate Social responsibility. Bank practices in corporate Social Responsibility. provide rehabilitation of offenders in Swaziland and advocate for a fairer criminal justice system. immunisation. They are involved in rehabilitation of the young prisoners. This organization collaborates with the Ministry of Justice and Constitutional Affairs. health education. Key services involves: curative care. 4.
Each interview commenced with the researcher trying to establish contact. 2003). and the questions here were focusing on the Effect of CSR on client choice of bank. who in this research was responsible to contact the target respondents and make appointments for the telephone interviews to be conducted by the researcher. The questions were made to be open-ended so to have the ability to evoke responses that are: meaningful and culturally salient to the participant. the researcher got an in-country research assistant. The questions were designed to be simple (avoiding technical jargon and theoretical concepts) and brief enough to be understood by the interviewees. The research assistant also distributed the interview questions to the respondents at least three days before the agreed date of the interviews. and then briefly explain what the study was all about and the purpose of the study. The interviews were conducted by the researcher using a fix line telephone or a mobile phone. Prior to the data collection process. Open-ended questions also give the respondent the liberty to expand and give more information when answering the questions. confidence and understanding between researcher and interviewee. was responsible for reminding respondents about the interviews when the date and time the interviews were getting closer. build rapport. The research assistant was first oriented on the study so that he could understand and appreciate the importance and urgency of the study. Finally. Section C had nine questions which were directed to junior bank employees. The interviews were conducted with an aid of open-ended interview questions to guide the interviews. the researcher would start by introducing himself and then thank the interviewee for agreeing to be part of the participant in the study. and these questions were focusing on the employee perception on CSR practices of their banks. 4. At the beginning of each interview.directed to the NGOs (bank clients).6 Data Collection The data collection was done through a semi-structured and in-depth interview sessions. unanticipated by the researcher: rich and explanatory in nature (Saunders et al. The researcher would then assure the interviewee that the information given would be treated with all the 48 . depending on the time of the interview.
The researcher was sometimes repeating the questions in local language to help the interviewee fully understand the context at which the question was asked. into manageable categories on a variety of levels word. The collected and transcribed data collected were organized using tables. 15 minutes for NGOs and 16 minutes for bank employees. in an effort to reduce the element of biasness in the study. word sense. Follow-up questions and probing were made where necessary to allow the interviewee to give more information. 2003. During the proceedings of the interviews. and promote reliability. 4. and kept the questions as clear as possible to the interviewee. The duration of the interviews on average was 27 minutes per interview for the bank Manager. 49 . the researcher tried to be as neutral as possible when asking the questions. or broken down. or theme. the researcher was taking notes of the interviews. phrase. sentence. During the interview. systematic and quantitative description of the manifest content of a communication (Cooper and Schindler. 460). The text was coded. the researcher helps the interviewee by asserting understanding and interest to indicate that the researcher is listening. Again. p.7 Data Analysis The content of the recorded interviews was transcribed and saved as a written text document to be qualitatively analyzed. and researcher will use pseudonyms to protect the interviewee.confidentiality while used in the study. and then examined using one of content analysis basic methods: conceptual analysis or relational analysis Content analysis is a research technique for the objective. by repeating the interviewee’s reply. which sometimes served as a probe and asking questions to clarify when the answer is either inconsistent with the earlier context or when the researcher failed to understand the interviewee’s full explanation.
Major topics covered include the design of the study. data collection and analysis. 50 . the selections of banks and organizations who participated in the study. Within the discussion itself. It has also provided a detailed description and justification of the methods and approaches used in the study. the approaches and precautions the researcher to reduce elements of biasness and in promote reliability have also been mentioned.4.8 Chapter Summary This chapter has presented a detailed methodology and approaches used by the researcher in carryout the study.
1 Bank Practices in Corporate Social Responsibility Asked on how the bank defines CSR. and the effect of CSR on client choice of bank.CHAPTER FIVE RESEARCH FINDINGS AND ANALYSIS 5. 51 . this chapter report on the findings and analysis of the research. CSR is the way through which bank gives back to the community. bank employees’ perception on CSR practice by their banks. Drawing from literature review. The different definitions confirms the observation by Jackson (2009) that. providing an opportunity for greater involvement and cooperation within the community in which our company operates. It has also been observed that though the four banks interviewed in this study were located in the same city of Swaziland. For example. The use of CSI instead of CSR on the first definition is due to the influence from South Africa. but their definition of CSR was not the same. It is the structure that administers CSI of the institution. to deduce a pattern for Swaziland. this chapter presents findings and then give a discussion on the different components of CSR as gathered during the interviews while conducting the study. with all operational policies including the CSR policy. dynamic and context specific. much as there is lots of research conducted on CSR. Special focus is on the banks practices on CSR. the four different managers interviewed gave different definitions of CSR. the drivers of CSR. from which the bank comes from. Moon (2007) concluded that CSR is multifaceted.0 Introduction Guided by the research questions. It also indicates the level of understanding of CSR as a new concept in Swaziland. but still there is no widely accepted definition of CSR. 5.
Culture. and Economic development. all the three international banks are being guided by the principles of their group CSR policy when implementing CSR activities in Swaziland. Though the banks are addressing similar issues. but the number of issues per bank is not the same as some banks take more issues than others.CSR activities / Issues by the banks The prioritized CSR issues being addressed with CSR by the four banks include: Education. all (three) the international banks are have their CSR addressing more issues than the local bank. Figure 4: CSR Issues by banks Interestingly. The number of issues being addressed by each of the interviewed banks is shown in figure 4. Health (HIV/AIDS). Again. 52 . Therefore. Sports. Community development. their international linkages on CSR and their group policy have an influence in having these banks addressing more CSR issues than the local bank.
53 . while Swazi bank uses the marketing department to select and recommend for funding. Culture Health Schools choral music competition.Table 1: Examples of activities for the different bank priority Issues. (FNB) and Standard bank are using CSR committees. Nedbank has not yet established CSR committee. the interviewees gave answers which indicated that currently there is no standardized method or criterion used by the banks. Bank branches are involved in identifying projects and partner relevant organizations. CSR Issues by Banks Economic Development Community Development Activities Support Business Women of the Year Bank employees doing voluntary work in communities. entrepreneurship at schools. Fight against HIV/AIDS activities. support vocational training Donations Various donations to individuals and organizations and Projects Selection Process Asked on how the banks select projects to be supported. but they use a strategic committee. mountain bike classic. marathon Donations to University. the interviewees mentioned that the CSR committee reviews submitted project proposals and recommend to the Board for approval and support. paying school fees for destitute children. Again in the banks with CSR committee. sponsor community development projects. each bank uses its own method which is informed by their CSR policy. For example. sponsor health related organizations Sports Education Soccer (knock-out) competition. The CSR committee has employee representatives from all branches.
annually. and that the operating costs in approved projects are becoming too high. reducing the amount reaching the intended beneficiaries. we collaborate with relevant NGOs. he saying at times we have citizens who misuse the funds after being supported by the bank. Collaboration Though not to a great extent. and be able to achieve what was proposed in the project. All the four banks interviewed revealed that they do not have a proper monitoring and follow-up mechanism after giving resources for a project in the communities so to ensure that the project is implemented accordingly and it achieves the intended objective. reducing the amount reaching the intended beneficiaries. One of the interviewees cited misuse of resources by beneficiaries as another problem they face. When implementing CSR activities. Asked on how the CSR initiative is being funded. two interviewees stated that as per their CSR group policy. without problems and that beneficiaries will use the resources donated to them in a responsible manner. but I must mention that our collaboration is very minimal because the bank prefers dealing directly with the 54 . that they will implement the proposed project. The banks just place too much trust on beneficiaries. Another challenge is that currently the banks do not have a monitoring system for CSR activities supported by the bank. One interviewee went on to say another challenge is that the operating costs in approved projects are becoming too high. all the interviewees considered the CSR budget to be very little compared to the genuine applications the bank receives from the society.Challenges All the interviewees mentioned that their biggest challenge is that CSR budget is too little to cover all requests submitted to the bank. but the bank collaborate with other agencies in coordinating and co-sponsoring some projects or events. Current challenge is that CSR budget is too little to cover all requests submitted to the bank. the CSR programme is allocated 1% of the net profit. On the challenge of budget. The other two interviewees mentioned that CSR budget comes from the marketing department of their banks.
55 . Evidently philanthropic responsibilities feature highly on the CSR agenda of the interviewed banks in Swaziland. 54). 2004. This is in line with an observation by Popp (2009) that in Sub-Saharan companies there is a high acclaim for leadership visibility at and involvement in community projects and activities. All the banks interviewed mentioned that they prefer working directly with the communities or beneficiaries as they also want to benefit in the process. This substantiates Visser’s (2006) claims for the need to reorder Carroll’s (1991) CSR pyramid for Africa. marketing and public relations focus.beneficiaries in the communities. All the banks interviewed were emphasizing on ‘giving back’ to the community through philanthropic projects as they are mainly about giving out donations to the society. which underlines the assumption that CSR has a strong social inclination. So. The CSR strategy by the interviewed banks seem to follow the thinking that investing in philanthropic activities may be the only way to improve the context of competitive advantage of a firm and usually creates greater social value than individual donors (Garriga and Mele. However. the interviewees promised a bright future of CSR in Swaziland. they want to be perceived as benefactors of the communities that they operate in or do business with. Most of the banks are planning to broaden the issues covered in their CSR programme so to have a bigger impact in the communities. p. stakeholder involvement and general collaboration is lacking. the CSR activities in all the priority issues by the banks in Swaziland are more philanthropic. In the case of the banks in Swaziland. Future of CSR in the bank Regarding the future of CSR programme in their banks. it seems philanthropic responsibilities certainly take a higher priority than legal responsibilities in Swaziland. Therefore in all the four banks interviewed in this study. one of them even mentioned that our bank is currently strategizing on how we can have more people benefiting from the CSR programme. and they want to expand market share and create opportunities for their products and services. They revealed that the banks will continue to support the initiatives so long as they make a real difference in the communities in which they operate.
On another note. This will also enable employees to be fully involved in the CSR activities. This indicates that some of the banks do understood CSR to be more than just philanthropy. the high rate of philanthropic initiatives in Swaziland may suggest that the government has limited capacity to provide basic needs for the people. some banks also adopted other processes such as employee volunteering. they create greater wealth than other kinds of donations. Generally. CSR was altruistic in nature according to Lantos’ (2001) categorization. However. resources and staff time. which involved supporting community initiatives through donations of money. which is contrary to the suggestion by Baron (1995) that for a business strategy to be effective both market and nonmarket strategies should be integrated and tailored to the core business and competencies of the company. In this study. 5. This reinforces the notion that CSR is greatly influenced by the social. and political conditions of a country. economic. and by the prospect of enhancing financial performance. as expected. CSR was primarily value-driven as most of the respondents claimed their CSR to be morally motivated and an integral part of their core business values. and partnerships. cultural. these contributions were often once off events rather than long term projects and did not always relate to the core competencies of the company. the need to gain and maintain legitimacy from stakeholders.This line of thinking and observation was also confirmed by Burke and Lodgson (1996) who concluded that when philanthropic activities are closer to the company’s mission. it has been noted that the CSR practice by the banks has not yet integrated the market and nonmarket environment into their business strategy. there was not a consistent pattern across all companies. Though philanthropic activities are dominating the CSR programme in the banks.2 Drivers of Corporate Social Responsibility Wood (1991) observed that CSR was motivated by the desire to ‘give something back’ to the communities in which they operate. Interestingly. In line with Phillips (2006) who proposed that the 56 . community investment programmes were frequently cited. In all these instances.
responsible corporate citizen. and that it also become a strategy to advertise the bank and its products. We also want to be relevant. Basically. 57 . One interviewee emphasized that CSR gives an opportunity to the bank to interact with the stakeholders and in the process find out what the market needs. they acknowledged that it is part of their responsibility as business to be involved in uplifting the society. This becomes a return on investment. The extent at which CSR benefits the bank When the interviewees were asked about the extent at which the banks benefit from the CSR programme. domestic and international CSR companies referred to different principles as driving their CSR. The Managers also view CSR as strategy through which the banks build relationships with the society. added one interviewee. all the respondents mentioned that the banks are benefiting on the CSR activities. The interviewees claim that CSR provides the bank with a unique selling point that makes a real difference. Regarding drivers of Corporate Social Responsibility. consistent and considerate in the livelihood of our stakeholders. This confirms the observation by Cannon (1994) that there is interdependency between a business and society. Asked on what propels the banks to be involved in CSR.motivations for CSR are different in Africa. the bank CSR objective is to assist beneficiaries improve their quality of life. and in which we operate. all the interviewees mentioned that it was within their bank values. They stated that CSR enhances our image to clients and prospective clients. It also give a positive mileage to the bank as it gains recognition both internal and externally. The drivers of the banks CSR in Swaziland was contrary to the observations by Lock (2006) that many initiatives in Africa are being pushed by NGOs and international organizations. the interviewees were the four bank managers responsible for CSR in the four different banks. and give assistance where possible. The interviewees also stressed that CSR assist the bank gain competitive advantage in the banking industry.
and there is no government policy on CSR for corporation in Swaziland. in Swaziland the study indicates that the government has not taken a step further to promote CSR as suggested by Steiner and Steiner (2000) that government is the repository of the social conscience and redistributes resources by transfer payments. the relationship of government and the business is that government prescribes the rules of the game. we only partner with government and selected NGOs in some of our CSR activities. and the comparative advantage factor.Government and other stakeholder influence The banks in Swaziland hardly engage stakeholders for input in their CSR initiatives. In the case of the local banks. One of the interviewees added that government only assists in laying national strategy. The very weak partnerships and stakeholder influence in the CSR initiatives of the banks indicates that the government of Swaziland has not yet understood the concept of CSR. The banks are mainly concerned about reputation building as it was revealed by almost all the banks interviewed. Hess et al (2002) highlighted three broadly defined categories of drivers behind CSI programme. as it established a unit for that call Swaziland Investment Promotion Authority (SIPA). but it appears the government then fails to build-up the relationship with the companies to encourage Corporate Social Responsibility. our focus areas are being guided by the priority areas of government. the competitive advantage factor is the leading driver in Swaziland. 58 . However. Normally. all the interviewed managers stated that government and stakeholders have no influence in our CSR initiatives. tax incentives and subsidies. that if properly harnessed. it may be of great assistant to government in solving the country’s problems. setting broad rules of business behaviour within which individuals are at liberty to act in conformity with their self-interest (Steiner & Steiner. 2000). which are: the competitive advantage factor. The government also exerts moral pressure on business to conform to with generally accepted social goals. the new moral market place factor. Regarding influence from government and other stakeholders. The government of Swaziland is doing well in attracting investors into the country.
59). including bank charges and interest given by the bank. p.Regarding NGOs. 2004. it is suggested that the most efficient strategies for managing stakeholder relations involve efforts which simultaneously deal with issues affecting multiple stakeholders (Garriga and Mele. instead. 5. sometimes the bank would reject a project without sharing information on why the projects fail. it is very much up to individual management whether or not to identify them as a stakeholder. The interviewees claimed that banks are not active enough on their CSR. This was in contrast with the ideas from Barron (2001) who mentions the importance of firms in implementing non-market strategy to reduce the demand from potential activist groups and any subsequent boycott. it was surprising that none of the banks interviewed rated NGOs to be of any real significance in their CSR activities. As a result. covering limited areas or issues. However. Generally. The CSR in banks have a narrow scope. In terms of their stakeholder identification. which should be considered when managing stakeholders for a successful business. A number of respondents mentioned that they sometimes partner with relevant NGOs. they would be considered more of a discretionary stakeholder at this time. The perceptions of the interviewed NGOs about CSR by banks were that it is currently a good strategy for marketing the banks while assisting needy communities. having a good deal of legitimacy but no real power or urgency.3 Effect of CSR on Client (NGOs) Choice of Bank A total of ten NGOs were asked on the extent at which CSR by banks influence their choice of banks to open accounts for the organizations. such that the public lacks information about the general operation of banks and their CSR initiatives. As a result it can be concluded that NGOs are not yet considered a driver of CSR. although there is perhaps some potential that this may change in the future. but the banks prefer dealing directly with the beneficiaries in the communities. all the respondents mentioned that the banks CSR activities do not influence NGOs in choice of banks. An observation by the interviewees was that the banks only make donations around towns where they are most likely to have high benefits in terms of getting new customers. The NGOs went on 59 . NGOs are mainly influenced by the services and products offered by the bank.
The interviewees also suggested that the banks need to restructure their CSR programs such that they should be pro-poor. The partnership of banks and NGOs can also enhance the quality and sustainability of the projects supported by the banks as the NGOs would incorporate the bank supported activities into their normal plans. and thus they suggested that it should be more open and transparent so that those communities not benefiting may be clear of the criterion used when selecting the beneficiaries. the interviewed NGOs mentioned that for the purpose of improvement on the banks CSR so to have bigger impact and influence NGOs’ choice of banks. Bank should also localize their group CSR policies to be relevant to Swaziland context. the banks should consider involving NGOs in their CSR. Improvements on Bank CSR On the question of improvement of banks CSR. and also minimize duplication of activities and efforts on the same communities. The interviewees also mentioned that banks should visit their clients to strengthen its relationship with stakeholders. in the process the bank can share information on products and services by the bank.to mentioned that most of the banks are not servicing their customers fairly. the interviewees stated NGOs were less involved both in terms of having input on the activities and on partnerships in the implementation. In addition. 60 . The NGOs also mentioned that the government should provide incentives for banks involved in CSR so that the banks may be encouraged to expand on their CSR activities and reach more communities. When asked about NGO involvement in bank CSR activities. because their involvement will strengthen the relationship between the two institutions. the process of identifying beneficiaries and approval of projects by the banks has been perceived by the interviewed organizations not to be very transparent. Out of the ten organizations interviewed. as priority gets to those believed to be high valued customers with lots of money. only two organizations said to have had partnership with one of the banks but on a once-off activity. right from planning of the activities up to implementation stage. so to monitor the work on continuous basis. and then widen the scope for their pillars to incorporate more CSR issues.
In that case the contribution by the bank ends up not assisting the people if they do not get additional resources to complete the whole project. all the four banks. all the interviewees were happy that CSR strengthens the image of the banks. saying much as staff is involved in CSR. two out of the four interviewees were not quite happy about staff involvement. the involvement is a bit elitist. Nevertheless.4 The Perception of bank Employees on CSR Practices of their Banks Employee involvement in CSR initiatives Asked on staff involvement in CSR activities. However. The interviewees also acknowledged that CSR has improved individual staff member’s social and life skills. and as individual staff members they get some satisfaction when assisting the community. They went on to mention that their CSR support to the society does not help the beneficiaries to the fullest. One interviewee also mentioned that CSR teaches us not only skills in dealing with community projects. The involvement and participation of staff starts from identifying needy citizens who can be assisted through the CSR programme up to volunteering for community projects. They get exposed to educational activities that broaden the thinking and understanding. 61 . as well as improving team spirit among the staff. and also helps in attracting new clients and retaining existing customers. employees interviewed in this research stated that some employees were involved in the bank CSR activities. only assist them half-way as the banks do not have enough funds that can complete bigger project like community water scheme. Dislikes about CSR Regarding what they dislike about their bank CSR. the interviewees made it clear that two interviewees were not happy to see more resources in their banks being spent on social activities as opposed to basic humanitarian activities. but to be responsible citizens.5.
Two of the four interviewees came hard regarding staff welfare in the banks. Unlike Europe. It should also create CSR committees in bank branches and adopt strategies that can assist the bank in its CSR activities. The bank should fully involve staff right from planning stage so to get the “buy-in” from staff. Since these banks are regulated by the Central Bank of Swaziland. For example. On another note. which may lead to loss of jobs (Fig. They emphasized that “charity should begin at home”. It must concentrate on CSR issues that are relevant in the Swazi context and the market in general. which can lead to unclear responsibilities of 62 . Contrary. but have the manpower as well. to participate on the actual activities.How CSR can be improved It was mentioned that CSR can be improved by involving the staff members even more. accusing managers of the banks for not doing enough on welfare for staff because salaries for some employees in the banks are very low. but there is no evidence of enforcement which can have an influence on the CSR by banks in the country. and labour laws. The bank should also invite the media during the CSR activities. not just to send money. Though the country may have some regulations and Acts for companies operating in the country. 5. The absence of regulations on CSR by government can be attributed to fear on government that companies may run away. issues of CSR are not addressed in Central Bank‘s guidelines for banks operating in the country. there is no evidence of initiatives introduced by the Swaziland government to encourage CSR. The concern about low salaries in the banks should be addressed as soon as possible as it can affect the performance of the staff in their normal work related activities. 2005). such as the Swaziland Environmental Authority Act No. 15 of 1992.5 General Discussion The findings of the research suggest in Swaziland coercive pressures to business as a result of regulations are minimal. saying the “haves” appear to benefit more than the “have not”. the employees observed that the CSR programme in banks is good but not properly structured. the unavailability of regulations on CSR creates a situation where CSR is not clearly understood by the companies and the society in Swaziland.
Considering that the banks were not established at the same time in Swaziland. which is also linked to international standards. This is in line with observation by Wood (1991) that business firms employ different processes of social responsiveness to address social problems. the study also reveal that there are no incentives by government to encourage the banks or any company to be involved in CSR activities. however. The socially responsible issues by the banks are not regulated by laws from government. it can then be said that there is a cross over into the cultural-cognitive realm where the banks find themselves under pressure to conform to shared beliefs of acceptable behaviour within the industry and the communities in which they operate. Therefore. 63 . the CSR initiatives of these banks are shaped by the standards from the international group companies. but to a large extent. For example. operations. The banks have further demonstrated almost similar CSR activities. three of the banks in Swaziland are international banks. at the banking industry. and actions.companies under the banner of CSR and also raise unrealistic expectations by the society. However. complying with policies and practices from the group. all the banks seem to have adopted policies and practices outlined by the industry both local and internationally to which some of the banks are linked. but now they are almost at the same height in terms of CSR practices. the law in Swaziland stipulates the minimum wage which the banks and other companies have to follow. This means that laws and government regulations therefore do not act as a driving force behind CSR in Swaziland. This has also been seen in the local bank following the kind of CSR being implemented by the international banks in Swaziland. at the same time. Though the banks are trying to localize their CSR activities. and is highly influenced by the international and industry regulative factors. Therefore. they choose activities that are relevant to their interests. For example. adherence to international standards encourages a homogenous kind of CSR practices by banks in Swaziland. policies and processes which can make collaborations and synergy much easier among the banks. It can therefore be concluded that CSR by banks in Swaziland is voluntary in nature. all the banks in Swaziland do not engage in CSR because of coercion. labour issues are legally enforced in Swaziland.
this chapter answers the research questions by showing that the understanding and practice of CSR in Swaziland is not exactly the same for the banks involved in CSR programme in the country. Generally speaking. and it confirms the claim by Visser (2006) for the need to reorder Carroll’s (1991) CSR pyramid for Africa. 64 . The CSR practices by the banks in Swaziland are almost similar.5. and they have less involvement of employees and other stakeholders including NGOs. CSR was also viewed to be part of the values of the banks that were involved in the study. CSR for the banks appears to be driven by various principles to address specific issues often relevant to the national context.6 Chapter Summary This chapter shows how CSR manifests itself in the commercial banks of Swaziland. The CSR by banks in Swaziland is more philanthropic.
but those involved are benefiting 65 . The government of Swaziland encourages businesses to be involved in CSR activities. 2008). with much emphasis in the findings and analysis section. and they are characterized by less involvement of external stakeholders such as NGOs and government. especially on training of employees. confirming the claim by Visser (2006) to reorder Carroll’s (1991) CSR pyramid for Africa. However. The CSR practices by the banks in Swaziland are almost similar. It is also revealed that employees are also not fully involved in the CSR by banks. 6. The financial sector has been considered to be among the key contributors to the country’s economic growth. This study has established that the concept of CSR is new in Africa. Unlike in European countries where government and NGOs have great influence on CSR. Swaziland in particular. it is suggested that CSR yields better results when it has been localized (Matten & Moon.1 Conclusions The research indicates that Swaziland is governed through traditional system and western models of governance. On that note. this study argues that CSR by banks in Swaziland is more philanthropic.CHAPTER SIX CONCLUSION AND RECOMMENDATIONS 6.0 Introduction This chapter summarizes the findings and analysis of the study building on points discussed in the earlier chapters of the study. contrasting the research data. It also has an independent judicial system that ensures protection of property and individual rights. Drawing from literature. and it is widely accepted by both the business firms and society. in Swaziland they have no influence in the bank CSR. with the King at the head of both systems. and there is a need to have more CSR studies in Africa. the study revealed that the CSR concept has been pushed to many parts of the world. and literature derived in Chapter three of the study. and that the regulation and monitoring of commercial banks and other financial Institutions is done by the Central Bank of Swaziland.
The banks in Swaziland display different understandings and levels of commitment to CSR as demonstrated by the issues they prioritise and the processes they employ on their CSR programme. stakeholder involvement is very important as business alone cannot solve all the problems and challenges of the country.2 Implications for Theory and Practice The study reveals that government and other stakeholders have little or no influence in CSR by banks in Swaziland. the banks have the notion of ‘give something back’ to the communities in which they operate. literature suggests that for CSR to yield the desired results. However. The CSR by most banks in Swaziland is motivated by the desire to create self image to clients and that it also become a positive mileage for the bank to gain recognition by the communities. where the bank originates. The employees involved in CSR feel good about it. It is used as a marketing strategy.from the programme as they learn and develop new skills. The study further suggests that the common CSR practice by the banks has been used as a cosmetic: public relations and media campaigns. They have a strong drive to disseminate evidence of their CSR-related activities. 6. but the study reveals that CSR often employed on an ad hoc basis removed from the core functions of the banks. and they generally advocate that all employees should be fully involved in the programme. Therefore CSR for the banks in Swaziland appears to be driven by various principles to address specific issues relevant to the national context. and the most of the supported activities becomes a once-off donation. the need to gain and maintain legitimacy from stakeholders. Much as some theories in CSR support stakeholder involvement for 66 . It appears that the commitment and understanding of CSR is largely influenced by the parent company. On another hand. these CSR activities had no influence in bank clients (NGOs) on choice of banks. the centerpieces of which are often glossy CSR reports that showcase companies’ social and environmental good deeds. Though the banks claim CSR to be part of their values. As such. similar to an observation by Fukukawa and Moon (2004) on their study in Japan. and by the prospect of enhancing financial performance.
in relation to CSR so that the role of each stakeholder may be known. On another note.effective CSR initiatives. For example. Further research might also seek to open up to all companies and seek to understand the CSR practice by businesses in Swaziland. but there is need to clarify the relationship and its importance between NGOs. companies can report on CSR as a soft rule to business by government. but in all business firms in the country. This may encourage and promote CSR not only in banks. Government should also consider providing incentives for companies that are involved in CSR so that more companies can adopt the CSR concept. Consulting stakeholders by businesses through formal or informal ways can create economic and social value through collaborative problem solving and help companies gauge perception and attitudes of society. building on the findings of this study. government and the business.3 Recommendations The government of Swaziland should encourage all businesses to be involved in CSR for the benefit of the communities. 6. An understanding of the psychological processes that 67 . which can then shape their CSR activities. companies involved in CSR should consider incorporating CSR to be part of the core business activities and ensure full involvement of all key stakeholders including employees in the CSR programme. In this case government should be the driver of CSR. This can give a holistic picture of CSR in Swaziland. and there must be some regulations to guide companies and ensure that their CSR activities are in line with government priorities in order to synergize efforts in addressing the issues affecting the communities. The coordination of CSR by companies can reduce duplication of activities by companies and good coverage of communities benefiting from the CSR initiatives. There is also a need to develop and strengthen CSR institutions in Swaziland to create more awareness on CSR and also to coordinate CSR initiatives in the country.
there are several limitations that should be taken into consideration when interpreting the findings of the study.4 Limitations of the Study Much as the study provides insight on the CSR practices by banks in Swaziland. 68 . challenges of maintaining a clear communication with the respondents. Again. 2003). as some MNCs from South Africa were using their parent policies for CSR in Swaziland. and also revealing that the CSR concept is not yet fully understood in Swaziland. Along with the interviews. Therefore there is need for strengthening of institutions in Swaziland that will facilitate the uptake and understanding of CSR in the country.5 Chapter Summary This chapter has discussed a summary of the findings and analysis of the study.underlie consumers’ reactions to CSR activities can help companies to allocate their resources to appropriate activities. telephone interviews. 6. and to keep participants involved (Cooper and Schindler. the conclusions of the study are based on the information available presented to the researcher. Finally. it has been very difficult to access information on CSR activities by some of the companies in Swaziland. Since the concept of CSR is still emerging in Swaziland. temporal effects were not taken into account in this study as it was not a longitudinal study. time was not enough to do a thorough investigation on the CSR practices by banks in Swaziland. Therefore. which include: not having enough time to get as much information as possible. some of the interviewees were relatively new (less than three years) in the organizations to give information that can richly inform the study. Some of the limitations are in the data collection method used. not many studies have been conducted on this field which could have contributed to this study. 6. It mentions that most of the banks’ stakeholders including government and NGOs have very little or no influence on the CSR activities by the banks. looking at the CSR practices by banks in Swaziland. It answers the research questions. In addition.
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Commercial Banks a) Swazi Bank Tel: 268 4095100 / 268 4095000 b) Ned Bank Tel: 268 4081000 c) Standard Bank Tel: 268 4041540 / 268 4043271 d) First National Bank Tel: 268 4045401 / 268 4045402 NB: The four listed banks are the only commercial banks in Swaziland. 1. The Non Governmental Organizations (NGOs) a) Lutheran Development Services (LDS) Tel: 268 4043122 / 268 4042562 b) Renewable Energy Association of Swaziland (REASWA) Tel: 268 4049040 c) Yonge Nawe 82 . and they all participated involved in the study 2.APPENDENCES APPENDIX ONE: List of Institutions (Banks and Organizations) that Participated in the Study.
Tel: 268 4047701 / 268 4041394 d) Coordinating Assembly of NGOs (CANGO) Tel: 268 4044721 / 268 4049283 e) Africa Cooperative Action Trust (ACAT) – Lilima Swaziland Tel: 268 4044738 / 268 4050170 f) World Vision Swaziland Tel: 268 4041102 / 268 4041106 g) Save the Children Fund – Swaziland Tel: 268 4042573 / 268 4045181 h) Swaziland Conference of Churches Tel: 268 5055253 / 268 5059584 i) Swaziland Association for Crime-Prevention & the Rehabilitation of Offenders (SACRO) Tel: 268 5054961 j) Baphalali Swaziland Red Cross Society Tel: 268 4049242 / 268 4048730 NB: All the above listed NGOs listed are a sample of organizations registered with both the Swaziland government and Coordinating Assembly of NGOs in Swaziland. 83 .
. b) Job title:……………………………………………………………………………… c) How long in this position? 1. Bank Practices in Corporate Social Responsibility a) How does the bank define CSR? b) Could you elaborate to me on the CSR activities of the bank? c) What are the CSR activities / pillars supported by the bank? d) How does the bank determine the activities? e) How do you identify the beneficiaries for your CSR activities? f) How does the bank ensure that the CSR activities are implemented well? g) What problems or challenges do you normally encounter in the CSR programme? h) Does the bank collaborate with another organization on the CSR activities? 84 .Appendix Two: Interview Questions on: “CSR Implementation and Challenges faced by Banks in Swaziland” Section A NB: The whole of section A is directed to bank CSR official General a) Name of interviewee: ……………………………………………………………….
General a) Name of interviewee:……………………………………………………………… b) Job title:…………………………………………………………………………… c) How long have you been with this organization? 85 . Drivers of Corporate Social Responsibility a) What propels the bank to be involved in CSR? b) To what extent does CSR benefit the bank? c) To what extent do the bank stakeholders influence your CSR policy or activities? d) What influence does government have on the bank CSR? e) What are the objectives for CSR in the bank? Do you think they are attainable? Section B: Directed to Bank Clients (NGOs) NB: Respondent will be assured that I would use a pseudonym to protect their confidentiality.i) To what extent does the bank collaborates with other institutions on CSR? And which are the institutions? j) What are the future prospects of CSR for the bank? 2.
f) What is your impression on the CSR by the bank? g) What can be done to improve CSR activities of banks in Swaziland? Section C: Directed to Bank Employees NB: Respondent will be assured that I would use a pseudonym to protect their confidentiality. Effect of CSR on Client Choice of Bank (to be directed to bank clients) a) Name of the organization (client b) When did your organization start using the bank? c) Why did you choose this bank? d) To what extent do CSR activities of a bank influence your choice of bank? e) Do you feel the banks are active in CSR? Justify your answer. a) Name of interviewee:…………………………………………………………………… b) Job title:………………………………………………………………………………… c) How long have you been with this organization? 86 .3.
why? b) In your opinion.4. Employee Perception on CSR Practices of their Banks (to be directed to bank employees) Begin by acknowledging the CSR activities being implemented in the banks. a) Are you involved in any of these activities? If yes. how can the bank’s CSR activities be improved? f) What are staff development activities that come along with CSR in the bank? g) What can you say about the bank commitment to its workers? h) What is your overall impression about CSR commitment of the bank? i) Would there be anything else that you would like to share with me on the CSR activities of the bank? 87 . could you elaborate more on your involvement? If not. do the CSR activities benefit you? c) What do you like about CSR of the bank? d) What do you dislike about CSR of the bank? e) In your view.
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