Global Journal of Management and Business Research, A: Administration and Management, Volume 23 Issue 5

Effect of Employee Dimension of Corporate Social Responsibility on Financial Performance of Listed Consumer Goods Companies in Nigeria 2 Global Journal of Management and Business Research Volume XXIII Issue V Version I Year 2023 ( ) A © 2023 Global Journals be on locally manufactured goods. In December, 2019, the Nigerian senate passed an amendment to the Public Procurement Act of 2007 which would, among other changes, compel Federal Government Ministries, Departments and, Agencies to show a preference for local consumer goods and services. Interestingly, despite these laudable programs, the consumer goods sector in Nigeria continues to experience declining financial performance (Kabuoh, Moibi, Ademilua & Babajide, 2020 and Yinka, 2019) The poor state of the financial growth of consumer goods companies in Nigeria has, therefore, attracted academic research interest to explore the factors responsible for this present situation. However, strategies, organizational structure and systems, social networks, stretched resources, and environmental factors (Baum, Locke & Smith, 2001; Baum &Locke, 2004; Jin & Kirsch, 2015 and Donthu & Gustafsson, 2020); (Freeman, 1984; Peace, 1982; in Hills & Jones, 1992) have been suggested as factors that account for the poor state of financial growth of consumer goods firms. Interestingly, the literature by Carrol and Sabana (2010) and Fu & Jia (2013) explain why the concept of corporate social responsibility (CSR) is crucial in explaining a firm’s financial performance in the field of accounting. Though corporate social responsibility has been researched as a precursor to financial performance, few studies have considered the effects of the dimensions of corporate social responsibility on financial performance. Interestingly, these dimensions, as advanced by The Sino-German Corporate Social Responsibility Project (SGCSRP), (2012) and Inoue and Lee (2011), are employee relations, product quality, community relations, environment, diversity, and human rights. There in annual reports and accounts, corporations in Nigeria have aligned and reported their social responsibility mostly about responding to the environ- ment, energy use, employees, the community and, products and customers. Interestingly, there is now a demand for companies to be socially responsible for prevent of COVID-19 (Ikram, Zhang, Sroufe, and Ferasso, 2020).The current study evaluated the effect of the contribution of corporate social responsibility on employees resulting in motivation, and corporate reputation on financial performance (FP). Interestingly, a search in the current literature on this critical factor from the Nigerian context reveals a lack of studies on the effect of this dimension on corporate reputation on financial performance. The importance of the contribution of employees to an organization’s financial performance, whether directly or indirectly, is enormous. Consequently, Akintoye (2012), while drawing inferences from some assertions on human capital, concluded that the human element is one of the most valuable inputs in an organization. To bolster this inference, Akintoye (2012) observed, “A team of competent, devoted, and motivated persons can convert a sick concern into a successful one. Consequently on the other hand, incompetent and disinclined personnel may waste the existing physical and financial resources leading the concern to collapse” (p.566&567). The level to which employees are motivated via corporate social responsibility is presumed to have an effect on the financial performance. Therefore, this research evaluated the degree to which corporate social responsibility on employees affects FP of listed consumer goods companies in Nigeria. Consequently, the hypothesis of the study is: a) Corporate Social Responsibility on Employees has No Significant Effect on FP Corporate entities will understand the effect of their corporate responsibility initiatives to the employees on financial performance. Consequently, this will necessitate optimal use of corporate responsibility to employees to enhance financial performance. Moreover, corporate employees will also understand the need to align their interests with the CSR posture of their organizations if they have not been doing so. Moreover, academics and students will use this study as referral material during their research. Moreover, this study might also give room for theorizing/hypothesizing other dimensions of CSR that affect FP. The remaining part of this study is divided into: literature review, methodology, results, and discussion of findings. II. L iterature R eview a) Conceptual Framework i. Corporate Social Responsibility (CSR) Many authors have defined the concept of CSR differently. Still, all these definitions convey that CSR is voluntary and encompasses business standards, principles, norms, ethics, policies, and practices integrated into the business culture to benefit stakeholders. ii. Employees’ Component of Corporate Social Responsibility On the employees’ component of CSR, CSR Hub in Aggarwal (2013) notes that it includes: disclosure of policies, programs, and performance in diversity, labour- relations and labour rights, compensation benefits, and employee training, health and safety, compliance with national laws and regulations, fair treatment of all employees, disclosure of workforce diversity data, strong labor codes, comprehensive benefits, training and development opportunities, and employee health and safety policies. Additionally, Boztosun and Aksoylu (2015) remarked that CSR has four policies namely: business, environmental, market, and social policies. Moreover, the business policies of CSR cover the support given for