The of the United Nations Global Compact - Case Study Example

? Social Responsibility Practices at Company A This report deals with social responsibility practices at companyA and is addressed to the CEO, Julie Karabetian. It introduces the term Corporate Social Responsibility (CSR) and explains the concept. It delves into the significance of CSR and enumerates socially responsible business practices. It concludes by a mention about the future of CSR. Table of Contents 1. Introduction 3 2. Concept of CSR 3 3. Importance of CSR 4 3.1 Limiting Litigations 4 3.2 Protecting Brand Image 4 3.3 Customer Satisfaction 4 3.4 Employee Satisfaction 5 3.5 Criticism of CSR 5 4. Socially Responsible Business Practices 5 4.1 Designing Facilities 5 4.2 Developing Process Improvements 6 4.3 Discontinuing Product Offerings 6 4.4 Selecting Suppliers 6 4.5 Choosing manufacturing and packaging materials 6 4.6 Providing full disclosure 6 4.7 Employee Welfare Programs 6 4.8 Measuring, tracking and Reporting 6 4.9 Children’s Marketing 6 4.10 Access for the disabled 7 4.11 Privacy for Customer Information 7 4.12 Plant, outsourcing, retail location decision 7 5. Conclusion 7 6. References 8 1. Introduction Corporate Social Responsibility (CSR) as a field of study has created a niche for itself among the academia, corporate, the government and other agencies. Starting at the beginning of the twenty first century, there has been a growing interest in Socially Responsible Investment. There is always a conflict of interest between business and society. From an ethical standpoint, CSR helps create an ideal society due to the actions of companies. However, the economic view is that profit should be maximized. As Leonard and McAdam point out, CSR includes issues such as human rights, workplace, unfair trade practices, ecology, consumers, community involvement and social development among others; and it has a bearing on organizational aspects like manufacturing, marketing, packaging, pricing, and distribution (27-29). CSR has evolved gradually from a ‘compulsory’ attitude to an ‘instructional’ one to a ‘suggestion’ one. This implies a process towards a complex and nuanced framework to define the concept and implement the practice of CSR. 2. Concept of CSR The World Business Council on Sustainable Development (WBCSD) defines CSR as “the commitment of business to contribute to sustainable economic development, working with employees, their families, the local community and society at large to improve their quality of life” (as qtd in Centidamar and Husoy 164). The best CSR initiatives are taken voluntarily on behalf of companies. Encouragement rather than punishment is a better alternative. The stakeholders in CSR should include customers, employees, suppliers, local neighbourhood etc. A softer relationship rather than a formal one should be the basis for collaboration with various stakeholders. Further, CSR brings together various organizations i.e. makes a network among them or builds communication channels between them (Centidamar and Husoy 165). As long as companies can benefit economically, they will implement CSR. Environmentally sound technology is the perfect example for this trend. Increased investments in technology will finally result in increased profits. Not only can innovations improve the corporate image, but also reduce the costs involved (165). Quality is part and parcel of CSR. The lower the company’s ethics, the lesser will be the success of Total Quality Management (TQM). Moreover, the brand image of a corporation is affected if it ignores quality. 3. Importance of CSR The following is a description of some of the merits and the criticism of CSR which together explain the significance attached to this growing field. 3.1 Limiting Litigations Every company has to cross swords with the law of the land at some point of time. Litigations arise when there is an aggrieved party who does not have faith in the company finding a solution that is fair to him/her. CSR is an attitude and a way of doing business. Implementing CSR can reduce litigations to a great extent. Either an honourable solution can be found to the problem or some sort of compromise can be brokered before the case comes up in court. CSR also denotes open and transparent communication between those involved. Misunderstanding that can lead to the court can be avoided at the outset itself. 3.2 Protecting Brand Image The way a company projects itself is as important as how it is perceived by the public at large. Brands need to be nurtured carefully. They not only connote a product but also serve as the yardstick for the reputation of the company. The image of the brand should be stable and positive in order to calculate its brand equity. This necessitates a firm policy of CSR in the organization. The brand image projected does not suffer any damage whatsoever if the company fulfils its CSR. The positive effects of the CSR impact favourably on the brand image. 3.3 Customer Satisfaction The firm is in business to serve the interests of its customers in the first place. The customer is the reason behind the existence of the firm. Hence, a CSR policy will always be in the interests of the customers among several others. Only if the customer is satisfied will there be word of mouth publicity and repeat purchases for the firm. CSR ensures that the customer is not exploited in any way by the company. The CSR acts as a consumer forum to look into any lack of service or below par products. 3.4 Employee Satisfaction Customers are not the only persons who need to be contented. The employees also should be satisfied with the organization they work for. When this is the case, the amount of absenteeism can be reduced. This is because of the amount of motivation due to CSR that makes the employees involved in their work. Contented workers would not usually leave their organization, if the remuneration is not a factor. Firms try to retain as many employees by reducing training and other costs involved in hiring newer employee. Any firm with high Employee turnover will not be able to take itself to greater heights if it keeps reinventing the wheel. CSR ascertains that employee grievances are sorted out at the earliest and that every employees feels confident and worthy in the organization. 3.5 Criticism of CSR CSR is dubbed as being only 5 percent action and 95 percent rhetoric. While all the processes are in place, there is no solid output from the work that goes on in the name of CSR. On the other hand, people shy away from taking risk. It is also argued that resources have been diverted from the core area in case of CSR. However, the more a firm is responsible; the more it need not be profitable. The reverse need not be the case either. As Vogel points out, though shareholders are interested exclusively in the monetary aspect of the firm, it does not mean that they withdraw from the firm since the firm is rooted in its CSR (12- 13). 4. Socially Responsible Business Practices 4.1 Designing Facilities Facilities should be designed for the purpose of environment and safety. The aim could be to conserve energy resources and reduce costs or for providing safety to the workforce and customers. Health and medical costs of the employees can be brought down. 4.2 Developing Process Improvements Processes should be improved by not recycling hazardous waste. Such waste should be disposed in incinerators to reduce the damage to health. Poisonous gases and liquids or chemicals should be eliminated from the manufacturing process. 4.3 Discontinuing Product Offerings Similar to the point above, products considered unfit for sale due to health or other reasons should also be withdrawn from the market e.g. Supersize portions of Mc Donald’s French fries. 4.4 Selecting Suppliers Suppliers should also agree to the company’s policies. The suppliers should be sensitive to environment issues and enthusiastic about going green. They should be suitably rewarded for their work and involvement. 4.5 Choosing manufacturing and packaging materials Such materials should be sourced from registered vendors. The material should not be hazardous. The quality of the materials being used for packaging should be examined and graded. 4.6 Providing full disclosure All the details regarding the products etc. used should be fully mentioned. Details like height, weight, age of items used to create products should be clearly provided to whoever asks for such information. 4.7 Employee Welfare Programs Facilities for wellness like gymnasiums, health care, and day care centre for children, etc. can be provided for the employees. Other such facilities include pension, recreation etc. for the employees. 4.8 Measuring, tracking and Reporting All goals and actions need to be reviewed from time to time. To understand the effectiveness of measures taken, these should be tracked. The reporting should be done objectively. 4.9 Children’s Marketing Guidelines should be made regarding the marketing on offer to children below eighteen years of age. Care should be taken to prevent misleading advertisements from being aired in front of this segment. 4.10 Access for the disabled The number of differently abled persons is increasing day by day. They should be offered special enclosures and/or ramps for mobility. All employees should be sensitized to the requirements of the disabled. 4.11 Privacy for Customer Information Customer information is to be used strictly for marketing purpose of the company. This could be for conducting surveys or for intimating the customers. The database should not be handed over to anyone who is not authorized to handle it. 4.12 Plant, outsourcing, retail location decision Location decisions should take not only the company but the local community into confidence. The setting up of any plant should not affect the lives or the health of the local community. 5. Conclusion There is growing interest among managers in CSR in general, and among executives in large corporations, in particular. The various aspects of CSR could vary across borders, organizations, nations etc; and the pressure to implement CSR from various quarters is ever-increasing (McWilliams et al). CSR requires that there should be vision. A short-sighted approach can only give temporary results in terms of profit in the short run. Good committed leaders are needed to give CSR the crucial direction. There is a need to understand the current state of mind of a manager. The manager’s psychology should be channeled such that he/she can understand the implications of CSR and implement it. Since 2000, CSR has entered an integration phase. According to White, this phase comprises alignment with business objectives, integration across areas and entities, and institutionalization that makes processes integral to the fabric of the organization (6-7). With the right proportion of resolution and knowledge, the future may see a shift from single-minded shareholder mentality towards next generation CSR that leads to both wealthy nations and wealthy companies. Works Cited Centidamar, Diek and Husoy, Kristoffer. “Corporate Social Responsibility Practices and Environmentally Responsible Behavior: The Case of the United Nations Global Compact”. 2007. Web 17 Nov 2013http://research.sabanciuniv.edu/9571/1/corporate.pdf Leonard, Denis and McAdam, Rodney. “ Quality and ethics, Corporate Social Responsibility”, (2003). Web 17 Nov http://www.texas-quality.org/SiteImages/125/Reference%20Library/Social%20Responsibility%20-%20Leonard.pdf McWilliams, Abagail et al. “Corporate Social Responsibility: Strategic Implications”. Journal of Management Studies (43, 1, 1–18: January 2006). Web 17 Nov 2013http://onlinelibrary.wiley.com/doi/10.1111/j.1467-6486.2006.00580.x/full Vogel, David. The Market for Virtue: The Potential and Limits of Corporate Social Responsibility. Washington: The Booking Institutions, 2006. Prnt. White, Allen L. Et al. “Fade, Integrate or Transform? The Future of CSR”.Business for Social Responsibility, 2005. 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