Corporate Social Responsibility And Recent Events Management Essay
Hopkins (2003) defined Corporate Social Responsibility (CSR) as treating the stakeholders of the firm, ethically or in a responsible manner. According to Wan-Jan (2006) is the best working definition that best depicts the concept of CSR. This definition depicts CSR both as an ethical stance and as a business strategy. This also conforms to the argument that CSR should not put emphasis on getting rewards or payback. The definition does not emphasize that practicing CSR should have its rewards.
CSR is very important in this era of globalisation. Globalization is generally seen but not exclusively, as an economic process (Sparrow, Brewster & Harris 2004). The level and pace of global economy change is still at its early stage, yet the pace of change of the economy is rapidly accelerating. This challenge is posed to international human resource management professionals to be become more complex and strong. Also, it has provided significant opportunities for organizations in reconfiguring their strategies in their respective supply chains as well as the globalization of their production systems.
This paper shall discuss how CSR is an important concern for both society and corporations. This shall also argue whether or not CSR is an effective means of corporations in bolstering their reputation and provide responses to pertinent issues. Sample cases will be presented in order to provide evidences for the mentioned points of discussion.
Corporate Social Responsibility
On the recent events brought about by the earthquake in Haiti, Motorola Foundation, along with Motorola and its employees have donated cash and kind relief efforts to the victims of the said calamity. The foundation is the charitable and philanthropic division of Motorola. This organisation is responsible in making strategic grants, pushes strong partnerships with the community, fostering of innovation and engagement of stakeholders. This foundation’s focus it’s funding especially with the need in education, science and technology, engineering and math programming among others (CSR Digest 2010).
The case of Motorola is one example that an organisation really paves way to have a separate division that focuses in CSR. Although as the description of the foundation reflected that its funds are especially focused in education particularly in science and technology, which is mainly the nature of Motorola’s business (CSR Digest 2010).
Another evidence for Motorola’s focus in technology and development is its collaboration on the reference design for phones that have Blue tooth technology (Portable Design 2004).
Herbert and Schantz (2007) argued that corporate actions of organizations are being subjected to more scrutiny than ever. There is an attempt to legitimize the roles of corporations and as seen in the corporate social responsibility as a part of a framework, which is triple bottom. In the study that they have conducted, credence values such as corporate social responsibility and business ethics are still intangible. Thus, the corporate brand becomes a guarantee for the social values that are being communicated.
Johnson (1958) considers that one of the most important changes that took place in the recent generation of corporations is the development of a new role in the corporate citizenship with the corporation. The economic and social responsibility is hence being recognized.
There are several measurement methods for CSR being implemented by different organizations. According to Sethi (1975), a structural framework to facilitate analysis of corporate social activities should have at least the following two properties. First, categories for classifying corporate activities should be stable over time, which makes historical comparisons possible. Second, the definitions of various categories should be applicable across firms, industries, or even social systems, making comparative analysis possible.
CSR has also been described as a tool to build good corporate reputation. Lewis (2003) found that public perception on the role of companies’ in society has changed significantly. In late 1970s, two-to-one of the British public agreed that the profits generated by large companies make things better for their customers. In early 2000s, two-to-one disagree. At the same time, 80% of the public believes that large companies have a moral duty to society. But 61% believes that companies do not really care about the environment and social responsibility. The dissonance between what the public expects firms to do and what they think the firms are actually doing is worrying. But Lewis argued that companies have a new basis to regain public trust – through exercising their CSR. Lewis believes that CSR can become a competitive edge/core competence for those companies who can exploit it properly. Porter too echoed the same opinion (Porter, 2003) when he stated that ‘today’s companies ought to invest in CSR as part of their business strategy to become more competitive’.
The extent of social responsibility of corporations, it is anticipated that there will be an increase in the resonance of corporate citizenship. It is also associated in the in the participation of a wider polity and aspirations that are normative. In the fulfillment of such demands, it is required from the society to give strong pressures as well as from the corporate leaders in order to bring about a true separation of economic spheres and politics. This is an implication in the reverse mechanism of routine mobilization (Barley, 2006).
Implementation of Effective CSR Report through a Business Plan
Strategic planning is the organization’s projection its destination in a certain period of time and how the organization will go there (Farrah et al 2001). It is a systematized planning process that involves a number of steps identifying the current status of the organization, including its mission, future vision, operating values, operational needs, goals, and prioritized actions and strategies, action plans and monitoring plans. The most important concept of strategic planning understands that in order for an organization to succeed, every member should contribute in achieving it.
Business development strategies are needed to achieve a sustainable development in an organization. There are seven steps in managing an organization according to sustainable development principles. These are performing a stakeholder analysis; setting policies and objectives for sustainable development; designing and executing an implementation plan; development of a supportive corporate culture; development of measures and standards of performances; preparation of progress reports; and enhancement of internal monitoring processes.
There are ways suggested in improving the strategic planning of organizations. There are five suggestions namely: starting with the issues; the right people should be brought together; planning cycles should be adapted to the needs of each organizations; strategic performance management system should be implemented; and human resources should be integrated on the strategic plan.
A CSR report will be created to evaluate all the economic viability of the company including the description and analysis of all the company’s business prospects. It will define and focus the company’s objective with the use of appropriate information and analysis. Also, the business plan can be used as a selling tool when dealing with important business relationships including investors, lenders and banks. The business plan can also reveal omissions and weaknesses on the company’s operating processes. Finally, the business plan can be used to solicit suggestions and opinions from people in relation with the business’ processes and operations.
The contents of the business plan are the company’s vision statement, the people, the company’s business profile, economic assessment, cash flow assessment and the company’s marketing and expansion plans.
The company’s vision statement should be concise and state the company’s purpose and goals. The people portion should have the most important individuals in realizing the set goals of the organization. The business profile should define and describe the business and the specific plans in carrying out the set goals. The segmented market on which the business aims to target should also be included.
The necessary factors in a very effective business plan shall include a sound business concept, an identified and well understood market, a stable industry, capable management, a very able financial control, and a consistent business focus.
Business plan implementation is a vital stage in business planning. Execution of the developed strategies should focus on two levers more powerful than structural change. These are clarification of the decision rights, specifying who the owner of each decision is and who should be responsible in providing the inputs. Another lever is ensuring the information flows wherein it is needed.
The most important levers in the most successful strategy execution are the decision rights and information flow. In decision rights, every individual in the organisation should know which decisions and actions they are responsible for. Higher level managers and officers should know how to delegate operational decisions.
In the flow of information, it should be ensured that important information in the competitive environment is quickly flowed in the corporate headquarters. In this way, the upper management can formulate quickly the best practices in the entire company. Also, the facilitation of information flow across organizational boundaries is very important. Lastly, managers and officers should help those field and line employees in understanding how their everyday choices affect the bottom line of the company.
In a successful strategy execution, there are seven rules to follow. These are: keeping everything simple; challenging assumptions; same language should be spoken in the organization; resource deployments should be discussed early; priorities should be identified; performance should be monitored continuously; and execution ability should be developed.
The Chief Executive Officer (CEO) must be the steward of all the strategies that define the organisation and what will it become. As the company’s chief strategists, the CEO should translate the business’ purpose into practice. You must be open to the possibility that this purpose might change. You should everyday watch the strategy which is your greatest opportunity in shaping the company as well as to outwit the competition.
In the preparation phase of planning, the CEO should be the one determining the parameters; you should be clear in mind the scope of the planning. You should also be the one to determine the composition of the strategic planning team. The selection of the planning facilitator should also be in your responsibilities. Finally, the CEO should also set the climate for the strategic planning process.
In the creative process phase of the session, you should be the one to formally open the activity. During the deliberation, it is your role to listen on what the team ahs to say and just ask two questions: “is that where we want to go?” and “are these the people who will get us there?”. As the session ends, it is also your duty to formally close the strategic planning session.
In the implementation phase, you will be the overseer of the approved discipline. You should regularly check the team’s performance on the formulated action plans. When the action plans are completed, it is your role to recognize the success of the entire team and appreciate their efforts for a job well done.
The SBU managers and other functional executives shall perform very vital roles in the strategic planning process. The key roles include interpersonal roles which will serve as the plan’s figureheads, leaders and liaison officers; informational roles which functions to monitor, disseminate information and serves as a spokesperson for the respective business units; and decisional roles which serves as innovator, disturbance handler, allocates resources and negotiator.
These managers will initiate and form the strategic planning process team. They will mobilize change through executive leadership. These strategies will be translated into operational terms which will be defined and executed by the SBU managers and functional executives. The formulated strategies will be aligned by these people into the goal of Lawrence Manufacturing. These officers shall motivate their people to make strategy everyone’s job. Finally, it is these people’s responsibility to monitor that the formulated strategy will be a continual process in the organization.
To evaluate the individual department’s performance, each officer will be required to practice the balanced score card system in monitoring their respective area’s developments. The balanced score card is a part of the strategic planning process.
In an article written by Hagel, Brown, and Davison (2009) in Harvard Business Review, they have formulated ways in shaping strategies in this world that is constantly disrupted. According to this article, very few companies act proactively and adapt to shape their strategies. Strategists can attract a critical mass of participants by developing these strategies by means of opportunities are convincingly articulated to the participants; standards and practices are defined so that participation are easy and affordable; and the demonstration that the organizations have the conviction and resources for success and will not be in competition with the participants.
In formulating a shaping strategy, the three elements should be considered. The first element is the shaping view. In order to achieve this element, five factors should be considered: the organization’s view should express a long term direction and how it perceives change; the organization should clearly identify attractive business opportunities; opportunities should be seen as a broader economic, cultural, and technological force in the organization; views should have a sufficiently high level of allowing unexpected developments; and views should be aggressively and continually communicated within the organization.
The second element of the strategy is a shaping platform. In order to achieve this component, there are five factors to be considered: the platform should promise financial benefits especially by reducing costs and increasing revenue generation; it should support a diverse set of participants and offering a values of opportunity; platforms should scale up in accommodating large numbers of participants; should likely generate increase in returns as the organization grows; and the platform’s functionality should continually evolve and providing the participants to regularly engage in it.
The third component of a shaping strategy is the shaper’s acts and assets. In order to achieve this component, six factors should be considered: shapers should be able to convince potential participants; shapers should be able to gain access to assets that will prove to participants the ability of sufficient resources; potential participants should be able to be assured that there will be no competition; senior management and other members of the executive level should have the tolerance to risk and the patience in committing the assets and in taking the essential actions in being successful; organizations should be capable of mobilizing and attracting enough number of participants; and the organization’s top management should have the enough personality to build a shaping platform.
Many evidences have been discovered and CSR has been perceived by many individuals as a social strand that is important for development. This is due in no small measure to the lack of formal study of the topic, despite the widespread debates it provokes. Moreover, it is a complex subject that currently lacks even a single broadly accepted definition.
The field of comparative CSR, ultimately, addresses a research question of critical practical importance: how best to structure global enterprise to import best practice in CSR in order to produce economic development that is consistent with raising labor standards and encouraging environmental protection? Strike, Gao and Bansal (2006) have produced empirical evidence that clearly states the challenge, by virtue of their findings that international diversification of firms increases both CSR as well as corporate irresponsibility, given the difficulties of managing semi-autonomous subsidiaries in different countries. Other further comparative investigations are necessary in order to better understand the concept of CSR. Such research may provide an empirical and theoretical basis for developing policies to encourage CSR and for conceptualizing which kinds of pressures are likely to be effective in encouraging a positive relationship between international businesses and society. This is also important in gearing towards globalisation.
Based on estimation of a disaggregated model, they report that there is a positive relation between firm performance (measured using market value added) and strategic CSR and a negative relation between altruistic CSR and firm performance.
Analysis of the strategic implications of CSR is hampered by cross-country/cultural differences in the institutions that regulate market activity, including business, labor and social agencies. Institutional differences lead to different expectations and different returns to activity. For firms operating in multiple countries/cultures this complicates the process of determining which activities to engage in and how much to invest. As the knowledge base of CSR develops worldwide, we will be better able to analyze and advise on CSR.
We are in the Globalization era. Globalization takes place when there is acceleration in the movement of people, products and ideas. Today, companies are more international than ever. According to the United Nations, there are more than 60,000 multinational companies (Mott, 2004). As a company becomes an international corporation, the criticism against it for damaging the world increases, as does the expectation that the company take responsibility for these damages. The notion of corporate social responsibility is an important tool for corporations to use in response to various concerns about them in the globalization era (Rampton, 2004). Corporations and public relations/advertising practitioners have tried to respond to the criticisms by conveying CSR messages that they are contributing to society in various ways, both locally and globally (Alfonso & Sharma, 2005; Prabu, Kline, & Dai, 2005).
Under the post national constellation of an emerging global order, we need a fresh view on the role of business in society. In our contribution (Scherer & Palazzo, 2007), we were critical that many CSR scholars have largely neglected the consequences of that tectonic shift and still build on the idea of an intact national regulatory power. We described the growing positive and negative impact of corporations on democratic institutions and their participation in global processes of governance with and without government as the politicization of the corporation, and we proposed a new concept of political CSR.
We have been criticized by Edward and Willmott for dismissing the concept of corporate citizenship. They advance several arguments in favor of that concept, which already includes concern in the advancement of corporations’ willingness and capacity in their participation in the public process (2007: 1109). Finally, CSR should be observed at all times by all organizations if possible. This will not only create a good image but also addressed the responsibility that we all have towards our community.