Corporate Social Responsibility At New Balance - Essay Example

Corporate Social Responsibility At New Balance Introduction: Corporate social responsibility or the corporate citizenship should ideally be built-in and self regulated so that the business embrace responsibility of its actions on environment and stakeholders. It is an intentional enclosure of social concerns in decision making at corporate level. New balance, an athletic footwear manufacturer, started its operations in 1906, gradually grew in operations, expanded internationally and currently ranks fourth after Nike, Adidas and Skechers. An extensive clientele and supply network within and outside the country demands a comprehensive CSR to be included in the business framework. Furthermore, an increasing social awareness and concerns also require the corporation to behave more ethically and in an eco-friendly manner. New balance and CSR: Despite a long history and a strong commitment to the corporate citizenship by the leaders and the employees, the company has some loopholes that must be looked upon to build an effective image of the business as socially responsible entity. The given case highlights some important areas that must be focused on in order to build a far-reaching and effective CSR strategy. At the first place, the leadership should incorporate the CSR in company’s formal structure. This can be done by forming a department of corporate responsibility. The department should include a CEO of the company in its executive committee. The Executive committee should also have managers responsible for consumer insights, operations, designs, footwear, apparels and brand management. This would result in increased focus on the company as well as of employees towards social responsibility. Another positive effect would be the formal disclosure of the activities done by the department, internally and externally. Once the department would be made, the other issue can be looked into more deeply. Since the organization is doing extraordinarily good in some areas and facing risks in others, it should concentrate more on the already flourished ones (supply chain management, employee volunteering, community involvement etc.) to be the leader in them. At the same time, the leadership should also take into consideration the risky areas and their efficient management. Both the steps are necessary for the achieving its goal of responsible leadership. It requires an address and concern to the following issues: The better and integrated communication of the activities related to the CSR to general public as well as to the employees. A clear definition and communication of achieved and targeted horizons. Minimizing the footprint at the same time improving productivity throughout the company’s operating sites through supply chain innovation- both within and outside US. Booming the already flourished area of operations and integration of CSR into it more effectively, providing a leadership to the whole industry. The first issue that must be addressed by the CSR department is the clear and consistent definition and communication of the organization’s view of responsible leadership. As stated in the case, there is a lack of communication about the progress in the relevant fields both externally and internally. Moreover, it is also mentioned that certain activities and principles that can be included under the umbrella of CSR are not assimilated and conversed. Consequently, the employees, customers, general public and other stakeholders remain unaware of them. Overall communication has so far proved to be a challenge and a barrier to position itself as a responsible leader. Unlike its competitors, the company has not yet brought out any CSR report available internally and externally. For example, the practices like the domestic manufacturing and use of rails instead of trucks for shipping reduced footprint, but it was not measured and communicated. The area of increased public awareness about the company is crucial for acquiring and maintaining an image of responsible leader. For being the industry leader, two things must be focused on, the continuous internal improvement and championing the public. Innovation and improvement are the pride of New Balance since its inception. It provides more technical novelty in designs and product lines that competitor brands do not. For example, a blend of gel inserts, heel counters, greater selection of sizes particularly for extremely narrow or wide measurements. Though the company has done excellent jobs in certain areas such as operations and worker’s safety and morale improvement over the years, the lacking areas include the difference in the facilities between the employees within the US and outside the US. The organization should genuinely focus on the problems. The supply chain management is exceptional when concerned inside US as stated in the case, but outside the country the case is opposite. To make it better and well organized, the company must partner with industry peers and other nongovernmental organizations. (NewBalance) This will help in the improvement of the existing structure of the supply chain and will also bring into light new areas of improvement that can help the company in achieving its goal of a responsible leader. The supply chains must be more transparent. As stated in the Nike CSR report 06, “(there is) no competitive disadvantage from bringing greater transparency to our supply chain. In fact, many of our suppliers have welcomed it for leading to streamlining and harmonization of monitoring approaches, reducing the burden on them, and allowing partners to collectively focus resources and energy on more than just policing.” (NikeInc.) Being the industry leader, Nike is adopting the practice and is benefitting from it. Conclusion: As the fourth largest footwear brand on the globe, the organization has the opportunity to take the CSR to an advanced level. The growing consumer demand and awareness and increased restrictions and pressures by the government and industry require a comprehensive and breakthrough strategy for the company to maintain its position. Such a strategy may also help in the acquisition of a sustainable competitive advantage, leading to increased profitability. New Balance has to incorporate the CSR into its formal organizational structure by the formation of a separate department for it. A better and direct communication of the activities taking place is also required by the authorities, consumers and the employees for a better understanding of company’s vision about the responsible leadership. Furthermore, the company should focus on the already excelled areas at the same time concentrating on the lacking features of its strategy. For this purpose, the involvement of the upper management and leadership’s concern is of critical importance. References NewBalance. "Responsible leadership." New Balance. 23 June 2010 . NikeInc. "Corporate responsibilty report." 2006. SUn, William. How to Govern Corporations So They Serve the Public Good: A Theory of Corporate Governance Emergence,. New York: Edwin Mellen, 2010. Visser, D. Matten, M. Pohl,. The A to Z of Corporate Social Responsibility. 2008. Yu, Xiomin. "Impacts of Corporate Code of Conduct on Labor Standards: A Case Study of Reebok’s Athletic Footwear Supplier Factory in China ." Journal of Business Ethics (2007): 5513-529. Read More