The Socio-economic effect of Corporate Social Responsibility on Local Community Development in Southern Ethiopia

Abstract

Large and medium-scale manufacturing industries undoubtedly bring an unprecedented human and environmental crisis. To overcome these negative effects, governments provide regulatory frameworks that entrench businesses actively involve in social responsibilities where they are operating. The goal of this study was to look at the scope and levels of corporate social responsibility for local community development from the perspective of social and economic responsibility. A total of 401 local communities living near industry were selected proportionally from four Southern Nations, Nationalities and Peoples’ Region zones, and Hawassa city in the Sidama Region. Quantitative data was collected from local communities and interviews with government officials and focus groups with members of the local community were also undertaken. Analyses were conducted qualitatively and quantitatively. The quantitative data were analyzed using descriptive statistical methods and regression models. Thematic analysis and interpretation were used to examine and understand qualitative data. The study found that industries’ role and dedication in accomplishing corporate social responsibility objectives in the investigated area was low, owing to poor follow-up, corruption, and the government’s reluctance to adequately enforce rules and regulations. The study suggests that the state authorities should monitor and evaluate the enforcement of business regulatory frameworks at grassroot levels rather than rely on reports. There is evidence showing the networked interest of businesses and corrupt state authorities hurdle the local community development should be benefited from business social responsibilities in exchange for their resources. The untold history of business effect should be revealed and remedies should be provided.