Kia Motors Corporation Sustainability and Human Resources - Literature review Example

? Kia Motors Corporation Sustainability and Human Resources Executive summary Sustainability does not come as a single pack of ideas; it involves incorporation of various concepts of business management. The main issues addressed or assessed by these frameworks include ability or inability by organisations to have business sustainability, short-term and long-term goals, ability or inability to manage risks, and the ability or inability by organisations to maintain corporate social responsibility. In general, internally, organisations should have the ability to have innovation and repositioning, as well as, cost and risk reduction. Externally, organisations should be in a position to have a growth path and trajectory, as well as, reputation and legitimacy in place. This paper utilised Sustainability Life Cycle Assessment (SLCA) framework in assessing KIA Motors sustainability and human resource managements. Although there is still much to be done by KIA in order to realise full sustainability, the company has proved to have put some measures that would help it towards this effect. Introduction It is apparent that, in every business, sustainability is an ingredient and key to success. However, this does not just come without deliberate attempts by organisations to strategically develop and maintain the sustainability. In light with this, organisations have to analyse the required tools that would help to maintain the sustainability. Basically, sustainability does not come as a single pack of ideas; it involves incorporation of various concepts of business management. Notably, Galea1 (35-48), noted that these range from setting organisation’s objectives, mission and vision statements, effective human resource management, and appropriate strategic plans to keep and oversee efficient running of the organisation. In assessing firms’ sustainability and human resource, various frameworks may be employed towards this effect. The main issues addressed or assessed by these frameworks include ability or inability by organisations to have business sustainability, short-term and long-term goals, ability or inability to manage risks, and the ability or inability by organisations to maintain corporate social responsibility. In relation to KIA Motors Corporation, this paper is going to utilise Sustainability Life Cycle Assessment (SLCA) framework. SLCA tools are based on the framework for strategic sustainable development. The evaluation system for KIA will be set against the life cycle stages of KIA products, corporate social responsibility, and human resource management. KIA human resources According to KIA website1, the company has been able to thrive in the market as a result of “the leadership of ambitious and industry-focused management team who play an imperative role in the day-to-day activities in growing the brand around the world.” According to literatures, any company that needs to maintain its competitive advantage has to have a proficient and result oriented workforce. However, this is abroad concept that incorporates several aspects of leadership. Firstly, according to Galea1 (35-48), employees are one of the primary assets of any organisation. Nevertheless, for employees to be able to deliver top results there must be an effective management team to oversee effective and smooth running of the organisation. Arguably, KIA has been able to recognise and employed that concept in its operations. According to Stuart 7 (59-83), there has been a transformation for capitalism from old capitalism to modern capitalism. However, today’s capitalism is faced with challenges such as environmental change, economic inequity, and financial meltdown, which organisations must address in order to maintain sustainability. In light with this, KIA can be argued to have put that into consideration when defining its sustainability model. In essence, in order to counter the above challenges, an organisation should have strategies put in place. One of these strategies is to have workforce that can handle and manage activities geared towards facing and conquering these challenges. Analytically, internal management of an organisation is core to effecting these strategies. According to KIA CEO, customer satisfaction is the company’s foremost priority (KIA Motors) 5. In 2011, although business environment was fraught with uncertainties, KIA Motors toppled its previous year’s best-ever highs in terms of sales volume and operating profit. The CEO further noted that these feats were made possible by KIA employees’ painstaking efforts over years. In this regard, it is apparent that human resource plays a critical role in lifting organisations to higher grounds. However, in order for employees to have the morale and motivation in producing top results, some incentives have to be included in the overall sustainability strategy. Studies have documented that, in order for organisations to have their sustainability maintained; there must be a creation of organisational culture, which among other things raise brand value and maintain sensible labor management relations. However, if this is something to go by, it then means that a broader sense of deliberating organisational culture must go beyond the simple definition of constituents of organisational culture. For example, in order for KIA to have managed to have its future-oriented organisational culture, most of its strategies must have been on how to maintain sensible labor-management relations (KIA Motors Sustainability Magazine) 6. In detailed sense, as noted by McNall3, sensible labor-management relations can only be achieved if the organisation brings on board all necessary incentives that not only motivate employees, but also binds them together in order to work as a team (14-36). For example, in 2010, KIA Motors launched an incentive compensation management system, which aimed at boosting sales, force motivation, and performance. Tencati4 noted that, one of the best ways to attract and retain result oriented employees is by organisations putting in place a management team that can pull all the necessary incentives and apply them in their employee retention and motivation schemes (42-76). These incentives should include monetary and non-monetary incentives. Monetary incentives encompass attractive remuneration, subsidised remedies and other wellness programs. Studies have found out that employees are attracted to work in organisations that compensate their employees well. This is what is termed as the view of work as valuable, which enables employees to feel that their effort is accurately compensated. In addition, Liebowitz8 noted that when organisations engage in promotion of wellness programs such as health care programs, it is apparent that its employees tend to build their loyalty to the organisation (50-58). In another dimension, non monetary incentives/rewards have been found to be more effective than monetary rewards. These include recognition and appreciation rewards. For example, a company may decide to recognise a hard working employee by publicly acknowledging their efforts, promoting proactive employees, and use of positive and appreciative comments by managers. In addition, some organisations go a mile ahead and involve employees in decision making processes. In regard to KIA Motors, the company promote its employees self realisation and foster a win-win relationship with its partner companies (KIA Motors) 5. This is enhanced by a way of advancing reasonable labour-management relations. In light with this, KIA employees are committed to and practice volunteerism and environmental friendliness. With KIA management and human resource well structured and ready to deliver top results, the company has strategically laid down strategies to maintain its competitive advantage through continued sustainability. The subsequent section articulates of how organisations can create and maintain sustainability. Though sustainability is a broad term, KIA has categorically put together all concepts of sustainability in a bid to keep the fire burning. KIA sustainability Sustainability is a broad concept that incorporates different concepts. This is arguably true because managing today’s business, but at the same time building tomorrow’s opportunity involves integration of several issues that revolve around sustainability. Stuart7 (59-83) noted that, this can be achieved by incorporating both internal and external management. Internal management involves having strategic plans to have cost and risk reduction strategies, and this requires or calls for new skills repositioning. Some of the integral ingredients of internal strategies that can help organisations achieve their cost and risk reduction objectives include greening, emission reduction, eco-efficiency, risk management, environmental management, waste reduction, and resource productivity. Conversely, Galea1 (35-48), argued that external management involves engaging external constituents such as remaining open to external views in order to build reputation legitimacy. This requires organisations to focus on the growth path trajectory. Some of strategies for reputation legitimacy building include stakeholder management, corporate citizenship, transparency, and corporate governance. With regard to this, companies have to think about the whole life cycle of what they do. The focus should not only be on focusing on the immediate customer, rather, the focus should be on the whole life cycle of their products. This according to Liebowitz8 includes finding out what happens to the product after consumption, the effects of their products on consumers, and how the product can be improved (50-58). With all these deliberations analysed, it is evident that in order for organisations to maintain their sustainability, innovation and repositioning remain key to all issues revolving around sustainability. This is true because this involves engaging the internal management in implementing strategic plans that oversee effective management of sustainability. In this regard, eco-effectiveness, sustainable technology, and knowledge and service intensity are vital components to drive innovation and repositioning, which is used as the primary management of sustainability. In regard to KIA internal management, corporate governance is cited to have propelled the company to its current position. Its business operations are founded on an institutional framework that enables coherent coordination and regulation of interest of its managers, shareholders, employees, and its customers (KIA Motors Sustainability Magazine) 6. This has been termed as KIA corporate control system. Rezaee2 (14-36) outlined that one of the ways through which organisations realise their sustainability is through adoption of corporate social responsibility (CSR). Since 2007, after KIA declared its commitment to CSR, it has concentrated its effort on the dissemination and full adoption of its key CSR goals of trust management, environmental management, and social outreach (KIA Motors) 5. This is part of what Stuart7 (59-83) termed as base of the pyramid. In his projection, Stuart7 noted that concepts such as CSR should offer solutions to organisation’s social and environmental problems (59-83). To comply with Stuart’s argument, KIA has put in place enterprise-level CSR Committee chaired by the chief executive officer. Through diverse communication channels for internal and external stakeholders, incorporation of their feedback in its business strategies has helped to improve products and services. All this aims at tackling social challenges. According to UN report 2011 state of future, climate change and sustainability was echoed to be the foremost of 15 global challenges. By May 2011, the CO2 concentration in the atmosphere was recorded to be the highest in 2 million years. Transportation sector is responsible for 23% of the direct emissions from the industrial sector. In light with this, KIA Motors adopted Green and Clean technology in its entire automotive manufacturing process and life cycle. This, among other things, involves enhancing energy efficiency in order to curb CO2 emissions across the entire manufacturing process (KIA Motors) 5. KIA also continues to release new vehicles that are greener and more affordable by enhancing their fuel economy. Since, according to KIA, CSR does not only deal with moderating on CO2 emission, KIA considered the heightened demand for businesses to fulfill social responsibility in terms of giving back its customers and society at large. Towards this effect, last year, (2011), KIA established a global social outreach scheme to give back its customers and the society. This scheme aims at enabling KIA to strive to think from the customer’s point of view and provide products and services that are responsible and reliable. As outlined by Stuart7 (59-83), drawing on innovative and creative organisational culture, KIA Motors has continued to raise individual and enterprise-level competencies to enhance its sustainability. In addition, since sustainability entails having a comprehensive life cycle of products, KIA has designed a management system to raise brand equity. This ensures that, right from the manufacturing point to consumption point, its products are compatible with the needs of its customers and society, as well as being friendly with the environment. In support of this initiative, KIA established the Great Work Place (GWP) program that aimed at forming close personal relationships among employees. This was, in addition of conduction of employee-training programs that aimed at strengthening global capacity in every sector of its business. Conclusion In today’s business, sustainability is viewed as an alternative to old capitalism whereby the benefits accrued from any form of business strategy aimed at benefitting managers and shareholders. Sustainability should see to it that organisations can be able to manage their current business operations, but at the same time, build tomorrow’s opportunity to advance their brand equity while meeting the needs of every stakeholder including shareholders, employees, customers, and society at large. Arguably, if the internal management is prioritised, studies have documented that, the external management, which tends to build a reputation and legitimacy can easily be realised. The internal management will have the capacity to design programs for life cycle management, stakeholder management, corporate citizenship, transparency, and corporate governance. Besides, it is noted that, when both internal and internal managements are well managed, organizations can easily maintain their sustainability. After many deliberations towards this effect, KIA has tried to align its strategies in order to have its sustainability maintained. Recommendations 1. Although KIA has put in place mechanisms of maintain its sustainability, it is apparent that there is still a need to have a more comprehensive approach on how external management can be improved. For example, the company need to walk the talk on the issue related to innovating green automotive technologies, which it pledged to look at in order to shape its future. 2. Rather than focusing on internal management and how this can foster external management, KIA needs to broaden its spectrum in order to accommodate every aspect of sustainability as outlined by Stuart so that its sustainability strategies should cover clean technology (sustainability of products created by potentiality to realise major improvements through new disruptive technologies), pollution prevention (eliminating wastes), base of the pyramid (corporate vision should direct KIA towards the solution of social and environmental problems), and product stewardship (focus on implications of product design and development). Bibliography: 1. Galea C. Teaching business sustainability. Sheffield, UK: Greenleaf; 2007. 2. Rezaee Z, Brockett A. Corporate sustainability: integrating performance and reporting. Hoboken, N.J.: Wiley; 2012. 3. McNall S. The business of sustainability: trends, policies, practices, and stories of success. Santa Barbara, Calif.: Praeger; 2011. 4. Tencati A, Perrini F. Business ethics and corporate sustainability. Cheltenham, Glos, UK; Northampton, Mass.: Edward Elgar Publishing; 2011. 5. KIA Motors. Available from: http://www.kiamotors.com/ 6. KIA Motors Sustainability Magazine 2012. Available from: http://www.kiamotors.com/FileRootMain/pdfFiles/2012ekia-sr.pdf 7. Stuart H. Capitalism at the crossroads: aligning business, earth, and humanity. Upper Saddle River, N.J.: Wharton School Pub; 2007. 8. Liebowitz J. The role of HR in achieving a sustainable culture, Journal of sustainable development. 2007; 3 (4): 50-58. Read More