Measuring the perceived importance of
ethics and social responsibility in ﬁnancial
services: a narrative-inductive approach
Musa Obalola and Ismail Adelopo
Purpose – This paper aims to reﬂect the argument that the impetus to engage in socially responsible
actions is ultimately reinforced by the perceived belief that doing so will be beneﬁcial to the corporation
in the long run.
Design/methodology/approach – The paper uses a narrative-inductive approach to make important
contributions to the corporate social responsibility-organizational effectiveness literature. Data were
collected through a semi-structured interview, and analyzed using qualitative analysis strategies.
Findings – The study reports a profound perceived usefulness of ethics and social responsibility for
business in the insurance industry in Nigeria. Furthermore, the study presents evidence that indicates
that consciousness about the role of ethics and social responsibility in organizational effectiveness in
this context is low, but, nevertheless suggests a positive posture towards the constructs. This positive
posture seems to have been driven by the negative image of the industry and the need to remedy the
situation. It suggests that this can be achieved through a show of genuine concern for the needs of the
consumers, and the need to reinforce their trust and conﬁdence in insurance as a loss mitigating
Practical implications – While shareholders’ value maximization was shown as one of the
considerations for ethical and social responsible behavior compromise, ﬁndings from the study also
suggest that stakeholders’ value maximization would be an effective consideration for the industry to
improve the present low market penetration. The paper draws out the need to amend short-term goals
for long-term goals by sacriﬁcing short-term proﬁts for long-term proﬁts and survival.
Originality/value – Although the strategic importance of ethics and social responsibility has been
investigated using the deductive approach in other industries, this work provides an alternative to this
existing bulk of positivist investigations by using an inductive approach with subjects drawn from the
insurance industry. The study also seems to the authors’ knowledge, the ﬁrst to investigate the strategic
importance of this construct in a developing and apathetic market such as Nigeria.
Keywords Ethics, Social responsibility, Organizational effectiveness, Insurance industry, Inductive,
Shareholders, Stakeholders, Nigeria
Paper type Research paper
There is ample evidence to suggest that social responsibility is increasingly gaining
acceptance in the corporate world. It has now become fashionable for organizations of
different sizes and concern; from proﬁt to non-proﬁt organizations to paint a picture of being
ethical and socially responsible. This is evidenced, at least, in the manners in which social
activities are being reported in corporate websites and annual reports (Crowther, 2004).
There is no doubt that CSR has become truly global. Empirical evidence has also shown that
social responsible behavior is associated with certain advantages (Fombrum et al., 2000;
Turban and Greening, 1997; Maignan, 1997; Dawkins, 2004). For example, Maignan (1997)
suggest that customers are likely to keep buying from companies that are perceived as
doing the right thing (ethical), and do associate positive images with their products.
Furthermore, Dawkins (2004) reported that customers were more willing to support
SOCIAL RESPONSIBILITY JOURNAL
VOL. 8 NO. 3 2012, pp. 418-432, Q Emerald Group Publishing Limited, ISSN 1747-1117 DOI 10.1108/17471111211247992
Musa Obalola is Senior
Lecturer in the Department
of Actuarial Science and
Insurance, University of
Lagos, Lagos, Nigeria.
Ismail Adelopo is based in
the Department of
Accounting and Finance,
De Montfort University,