Connection of Social Responsibility and the Need of the Human Being - Essay Example

1. Introduction: This paper seeks to answer two sets of question. By answering both questions a discussion and analysis will be made on the ship management issues including how social responsibilities evolved and the business policies to address the same, external environment of business and how companies in the industry cope with or influenced them. 2. Questions and Answers 2.1 Question 1 - How have the social responsibilities of ship management business managers changed over the years? What now is a major part in their business policies? Give relevant examples of genuine companies if possible. (Not NYK). 2.1. a. Answer to Question 1 To answer the question requires to under first the meaning of ship management business in order for us to know how business operates. Ship management must be considered as part of the maritime industry (Donn, 1989), which is in turn, is a part of the transportation industry. It could thus be said that any development in the transportation industry could affect the social responsibilities (Massie, 1987) of those in the maritime industry which will also affect the social responsibilities of these in ship management business. Ship management although made specific must be deemed as still part of business management (Werhane,1999) For the purpose therefore of answering the question, efforts were exerted to focus on those closest to ship management business. Before proceeding further it is also proper to have a working definition of what is social responsibility. Industry Canada (2007) defined social responsibility as “a concept with a growing currency within Canada and around the globe” that may assume “similar approaches such as corporate sustainability, corporate sustainable development, corporate responsibility, and corporate citizenship” and “many see it as the private sector’s way of integrating the economic, social, and environmental imperatives of their activities.” It also believed CSR to also involve “creating innovative and proactive solutions to societal and environmental challenges, as well as collaborating with both internal and external stakeholders to improve CSR performance.” Given the concepts we could now clearly answer the questions. It is very evident that there is a need to collaborate with internal and external stakeholders to improve sustainable development. The stakeholders could include almost many people surrounding the business such as customers, employees, the government, and the general public. To illustrate, let us take the case V. Holdings (2007) which declared its pursuit of a strategy of corporate and social responsibility (CSR) as a business imperative. Making it imperative means that it has become very important for the company to implement and do the same if it wants to survive in business or wants to have sustainable development. One of the ways of improving its CSR is by “building trust” in the company. V. Holding (2007) recognized the importance of trust “for influencing the way in which employees, customers, suppliers and the broader public judge a company.” It explained that building trust and credibility is central to company’s “future success and will result in part from the development of a corporate and social responsibility (CSR) policy.” It added about creating trust among the employees who work for the company as they recognise the company as good to work for. Their customers and suppliers trust to V. Holding as a reputable organisation to do business with, including the support and trust of investors and financiers to see the company as worth backing. For the communities where it has an impact, the company also cares about and responds to social issues. As proof, it created charitable foundation in 2006 to enable the to support those communities it work within to a greater extent (V. Holdings 2007) (Paraphrasing made). As to how it will attain its CSR, V. Holding (2007) said that it intends to put in “place a number of programmes and an investment in resources dedicated to CSR.” It explained that its “V. Ships Training Report process promotes the concept of continuous professional development, setting training targets amongst sea staff and defining their objectives for the year ahead.” It also claimed to have “instituted a broader crewing strategy with a greater emphasis on crew welfare, training and development.” (V. Holdings 2007) Explaining that one of its CSR elements is safety, V. Holding (2007) said that it must conduct its operations in a “safe and secure manner to protect our employees, the people they work alongside and the locations in which they work.” Claiming compliance with ISO9000 that gives the company a framework to implement in its operation quality management system can be operated.” It also claimed to have incorporated in it Safe Ships policy “a series of initiatives and education promoting on-board safety and environmental protection.” (V. Holdings 2007) (Paraphrasing made) The company claimed also to continue building communities by operating and donating to local fundraising efforts as well as match funds raised by our individual employees. It claimed that in 2006 it “supported the Tour Pour La Mer, a 200km charity cycling event involving 300 riders from the maritime industry to raise £250,000 for The Mission to Seafarers and The Sea Alarm Foundation.” (V. Holdings 2007) It believes that the essence of its CSR policy is “being socially responsible benefits almost everybody done effectively. It meant identify the actions that will have most impact on its particular company, managing them in a professional way – and communicating what they are doing. And this is the essence of our CSR policy.” (V. Holdings 2007). In promoting responsible business, the V. Holdings (2007) said it’s “clients demand products and services that are fit for purpose and good value” and the company realized that in “today’s more socially aware environment they are not prepared to source from companies that behave irresponsibly.” It also claimed that “many large companies, including oil majors and blue-chip shipping companies, are now building socially responsible performance into the criteria they use for selecting suppliers.” It added, “In certain cases existing or prospective V. Holdings clients expect their suppliers and subcontractors to perform to their own high standards – particularly in the area of environmental performance, Health and Safety and on the issue of human rights.” (V. Holdings 2007) In attaining to have a professional workforce as part of its CSR, the company said, believes that success of its business “depends on attracting and retaining the best people – both shore-based and seabased.” It believed in MORI research throughout the 1990s consistently which found that the “vast majority of people believed a company that supported society and the community was a good company to work for.” In announcing that it’s “CSR policy will play a vital role in our recruitment of the very highest calibre employees”, it explained that empirical research confirmed the “direct correlation between the improvement of a company’s environmental performance and policies and its business results and staff retention.” (V. Holdings 2007) In expanding the application of its CSR, the company claims to have management support to be “currently developing a comprehensive set of CSR policies, practice and programmes that are integrated throughout our business operations and decision-making processes. (V. Holdings 2007) What now is a major part in their business policies? The major part of companies if ship management business has responsible business. As V. Holdings (2007) claimed earlier, there is the reality of clients realization that their demand for company’s products and services need to be also attuned with “today’s more socially aware environment” as these clients or customers “are not prepared to source from companies that behave irresponsibly.” It cited the fact that “many large companies, including oil majors and blue-chip shipping companies, are now building socially responsible performance into the criteria they use for selecting suppliers.” To see the wider effect of the demand for social responsibility in the policies of companies in the industry, V. Holdings clients (2007) “expect their suppliers and subcontractors to perform to their own high standards – particularly in the area of environmental performance, Health and Safety and on the issue of human rights.” V. Holdings (2007) 2.2 Question 2 - Explain how a new Container Terminal/Port Development may cope with or influence the external environment in which they operate. Give relevant examples of external environments, (minimum 7). 2.2. a. Answer to Question No 2: To answer the question, we define first the external environment (Perloff, 1969) as any factor that that could influence a new Container Terminal/Port Development in its decision making (Bursk and Chapman,1963;Donaldson Lorsch’ 1983) . In addition it must be made clear that problem of new container terminal (Hagelin 1997) or port development would also be the problem of present terminal or port operators since they would be belonging to the same industry (Daily Post,2004). After each external environment below will be followed in on how a new Container Terminal/Port Development may cope with or influence the external environment in which they operate. We will attempt to classify the environments in into political, economic, social, technological, environmental, legal and competitive. Political Environment Political environment could refer to political pressures brought by political processes and structures or as result of market regulations. One issue that is affecting the terminal container and port development business is the subsidy being created by government that which is claimed by UKMPG to destroy the working of the market in port development. Dempster (2006) of The United Kingdom Major Ports Group Limited (UKMPG) said, the port industry is “predominantly private sector industry and virtually all investment in ports are privately financed.” Although the UK industry is claimed as the most efficient in Europe, Dempster (2006) voiced the opposition to “the new arrangements for the valuation of ports for rating purposes which came into effect for the 2005 revaluation.” He claimed that UKMPG saw the current approach of Valuation Office Agency (VOA) as increasing the required rate of return of doing business in England and Wales to a level that really could delay or discourage new investment. UKMPG as an association claimed that nine of its members have control to about forty one (41) ports which is believed to account for about seventy percent (70%) of the cargo passing through the country’s ports. To solve, UKMPG “strongly urge that in considering issues such as payment towards landside infrastructure the Government should look at the totality of financial pressures facing the industry, including the new approach to rating, since there is a serious risk that combined pressures would render new investment unviable.”(Dempster, 2006) Economic Environment As an external environment, economics could refer to issues on sources of finance, stock markets, inflation, interest rates, exchange rates, government and EU economic policy and type of ownership of companies. To appreciate this external environment, we should take case of the unclear position of UK in relation with European ports policy. UK Container terminal and port development operators want to know more about European ports policy which it claimed to not discussed well in Port Policy Review by UK that could create a more level playing field with our continental European competitors. The UKMPG claimed to be not well informed about European policy on environmental regulation which affects their decision making. The Association claimed that what many commentators to have argued “that the pendulum has swung, and it is continuing to swing, too far in favour of environmental protection and conservation at the expense of economic prosperity.” (Dempster, 2006) (Paraphrasing made). This means that with the desire perhaps of the UK terminal and port development regulators to do its end of the environmental policy in relation to European policy, UK may unnecessarily imposing too much on UK entrepreneurs and investors on as against their counterpart the rest of Europe. Social Environment Social environment may refer to peoples’ attitudes, desires and expectations, degrees of intelligence, education, beliefs and customs of a given group or society. This include what people want at certain points in time such as their call for better living and working conditions, more efficient and cheaper transport. The UK government had attempted to stimulate employment by subsidising investment in new port facilities. Government with is broader rule adopts employment policies to maintain low unemployment rate if not to reduce further. Not all actions however of the state may solve the problems of which want to solve. The moves of the UK government to develop some of the ports appear to satisfy the need for employment but what happens in reality is actually a reduction in employment elsewhere. In effect, this appears to be an exercise in futility and creating no net advantage in terms of employment. Dempster (2006) said “with the possible exception of third country transhipment traffic, the construction of a new port or a new port facility will not of itself lead to any net increase in UK traffic as a whole.” As how is this being addressed would mean UKMPG to be not recommending the construction a new port or a new port facility. Technological Environment Technological environment may refer to technological needs of business such as needs to invest in technology, communications, e-commerce and technology potential. Henesey, et. al (n.d.) acknowledged the “needs for higher operational productivity, faster exchange of information, and speedier vessel turn-around times are just a few of many critical factors that are currently pressing port’s nodal position within logistics systems and supply chains.” They explained that “logistics chains are stretching across continents where production may be in one continent and the market in another. Cargoes and shipments from all over the world have been increasing exponentially. However, seaports have not kept with the pace that economic development has been growing. In fact, many seaports are experiencing difficulties. Henesey, et. al (n.d.) then suggested, “It is important that the definition of terminal operation system be explained in that it is an operating system managing the flow of cargo through the terminal, ensuring that the cargo all go the right places and that the cargo movements are handled in the most efficient manner.” Henesey, et. al (n.d.) added: “Ports and terminal operators are also cognizant of the coming changes and perhaps threats if they do not keep up with the pace of change.” Ethics Ethics which could part of the social environment may further refer to practice of social responsibilities and pollutions issues such as noise, water, air and waste disposal. Like any other kind of industry the maritime industry also caused pollution. As the problem of the environment is universal, Dempster (2006) recognized that “air pollution in or around ports, relating to shipping or road traffic can be a cause for concern.” When confronted with any suggestion, UKMPG invoked the presence of “national and international regimes for limiting and controlling emissions from ships and from road traffic.” Although emissions from ships in ports are acknowledged problem in some places, the association recommended that the “remedy lies in making better use of existing regulatory regimes and the association “strongly resist that any suggestion that ports should be required to use port charges as a means of enforcing environmental policy” (Dempster, 2006) (Paraphrasing made). Cultural Environment This type of environment may refer to international and national cultures regional cultures, local cultures, organizational cultures, cultural changes and classes. Associated British Ports Holdings PLC, (n.d.) did recognized the dynamism of culture in organizations. Hence, it attempted to influence its employees by training and education by in its “business within a culture committed to the highest standards of health and safety.” It therefore claimed its commitment to health and safety matters as being “promoted through employee training, awareness campaigns and by linking a proportion of employees’ bonus payments to health and safety performance.” The company also believed in its “senior manager’s exposure to different parts of the business to broaden their experience and retain an active and dynamic management culture. ” The company proved this the fact in 2005 with “17 per cent of delegates at our annual senior managers’ conference were in new roles compared to 2004” and this included appointing two new Port Directors to operational board (Associated British Ports Holdings PLC , n.d.) Legal Environment This aspect may refer to sources of law, codes of practices, legal pressures, employment laws, Competition legislation and Europeans legal pressures. Government regulation is an indispensable part of business and one of its rules is to promote competition in the industry. However, it could also distort the market by lack of uniformity or perception of inequality among industry players. The Port’ Review is one way to do government regulation. When the government conducts selective regulation, it may not encourage compliance since other areas prejudiced would complain. Dempster (2006) cited the selective review which is “only designed to cover England, Wales and Northern Ireland, whereas ports policy in Scotland will be addressed in the context of the Scottish National Transport Strategy.” It is for this reason that UKMPG suggested that “that policy on the key issues affecting ports should be closely aligned as between Scotland and elsewhere.” (Dempster, 2006). 3. Conclusion: We have seen that social responsibilities might have existed in the past when the ship management industry was born current developments may be giving more emphasis. to problems that are not only peculiar to the industry but to the whole world of human being living in one planet. From the nature of things it is not difficult to appreciate that social responsibility is directly connected with the need of the human being. Before the profit (Brigham and Houston, 2002, Meigs and Meigs, 1995) or economic objective (Van Horne, 1992) was the need by consumers to be satisfied so that it was the need that caused other things being good or detrimental to society. Remove the need and remove the industry. The need is therefore inherent in man while man lives. Man will always need to travel (Brilmayer, 1993) and to move (Stuebner, 1997) his or her things from one place to another and he will need the services of other people. The shipping management business is therefore a component of the maritime industry which in turn is part of the transportation industry. As far as the social responsibilities are concerned there could no much change far as the nature is concerned only that the concept was not given emphasis before. What has changed is the scope because of the globalization (Micklethwait and Wooldridge 2001). It is the realization that sustainability (Mcfarlane,002) has something to do with knowing how to sustain the market. As to the major part of business policies, this would include looking at the world with a broader perspective that competition (Fahy, J, 2001) has become global and that the problem of the environment too has become global (Redclift and Benton,1994) too. Whatever kind of business management one deals with, it has social responsibilities where it must need leadership (Shapiro and Stefkovich,2001) for the organization to attain objectives. As to how a new Container Terminal/Port Development may cope with or influence the external environment in which it operates, it must deal with a very broad issues which include the political, economic, social, cultural , ethical , technological and legal environment. Each environment actually asserts back their power to the business but business has the option of responding responsively or not. What is clear however, the good response will always be beneficial at the end. Each of the environment is actually related and connected to one another and that is man’s needs continue to stay and continue to be satisfied in the short and in the long run so long as man lives and so definitely no business entity including the container terminal and port development operators will intentionally avoid the sustainability of their business hence the requirement for good governance with social responsibility. References: Brilmayer, L. 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