An investigation into the relationships between corporate social responsibility, community-company trust, corporate performance and social performance: A case of petrochemical industry and community in Ghana

There has been impressive growth in output and revenue of the oil and gas companies in Ghana for the last decade. However, our current review shows that there are vulnerable and untrustworthy relationships between companies and community members in the Sekondi-Takoradi district in Ghana, which is one of the major oil and gas mining areas. Although earlier research demonstrated that Corporate Social Responsibility (CSR) influences financial growth, current CSR research does not explain CSR, community-company trust, social performance and corporate performance relationships. CSR research is highly context-specific, with limited case studies in the Ghanaian context. Therefore, this research aims to validate the CSR, community-company trust (CCT), corporate performance (CP), and social performance (SP) constructs in the Ghanaian context and examines their relationships. This study also examines the effects of gender and stakeholder differences in the hypothesised relationships. This thesis defines CSR as the voluntary contributions of the Ghanaian petrochemical companies to the local community for the improvement of life standards and social wellbeing of the community while maintaining ethical values, ecological balances, and improving natural environment through mutual respect and better practices. CCT is defined as mutual belief aiming to work together to improve corporate business and social outcomes. CP is defined as company revenues, market share and profits; and finally, SP is defined as result-oriented outcome measures for the betterment of the society where the company is located. While CSR is corporate activities, SP is CSR’s outcome measure. The pragmatic research paradigm with the concurrent mixed-methods approach was followed. The pen and paper-based survey resulted in 211 valid responses for hypotheses testing and the one-on-one interviews involved 10 company executives and 20 community participants. The one-on-one interviews in the qualitative phase were used to explain the quantitative results. There were six causal and four mediational hypotheses that confirmed the research model of this thesis. The results of the Multigroup Analysis (MGA) also confirmed the effects of gender and stakeholder differences in the model. Survey data were analysed using the Partial Least Squares-based Structural Equation Modelling technique (PLS-SEM), and interview data were analysed through the content analysis procedure. The study shows that both CSR and CCT influence SP, and both CSR and SP influence CP. Although CSR is found to influence CCT, CCT does not influence CP. Results also confirm that CCT and SP have partial mediational effects between CSR and CP in the study context. The results of the multi-group analysis (MGA) also show that group effects are significant due to gender and stakeholder differences. The qualitative findings also revealed that bribery, corruption, gender bias, employment discrimination and poverty are of concern in the Sekondi-Takoradi community. The major theoretical contributions of this thesis include the definition and validation of the CSR, trust (CCT), corporate performance (CP) and social performance (SP) constructs in the contexts of the Sekondi–Takoradi petrochemical companies and communities in Ghana. There are methodological contributions to this study. These are the adoption of the pragmatic research paradigm with the concurrent mixed-methods approach, and the use of PLS-SEM in the data analysis procedure. In addition, each of the constructs included multiple items, and those were validated statistically. Corporate managers could use the CSR, CCT, SP and CP measures for periodic checks to examine how companies are performing. These checks can inform where managers are missing issues and need to improve, and where they have improved over time. The findings suggest a strong need for a consultative or participatory approach in the governance strategies at the local, regional, and national levels to determine the priority areas of CSR activities for the local community and its outcomes (e.g., social performance) both short-term and long-term. The research suggests developing and operationalising an agreement between companies, the community, and other stakeholders in order to strengthen relationships, build mutual trust and implement the CSR programs as promised. The findings revealed that there is a need for proper education and training programs in CSR, corporate and community relationships, governance, transparency, accountability and participation in government, in the company, and at the community level. Overall, this could enhance trustworthy and sustainable relationships. The policy implications of this study suggest, too, that Ghana should progress towards suggesting that companies become members of the International Council on Mining and Metal (ICMM) and implement strong and engaged relationships with the local community to establish trust and respect with the aim of achieving sustainable development goals (SDGs), corporate performance and social performance indicators and removal of poverty and unfair discrimination. However, this study only included two petrochemical companies and a community group located in the Sekondi-Takoradi area in Ghana, and thus the findings are formally limited to the study context