Corporate Social Responsibility Initiatives - Assignment Example

 CSR Initiatives Introduction Corporate social responsibility (CSR) functions as a self-regulated corporate function in winch a business tries to give back to the society and environment through its different socially responsible activities in adherence to the international rules and ethical practices. The corporate social activities have emerged as critical factors for determining the sustainability of a business in the globalised world. The corporate social responsibility activities aim to create a responsible behaviour of the corporate towards the community, employees, consumers and the environment. There has been much controversy regarding the effectiveness of the corporate social responsibilities for the profitability of the business. Some researchers have proposed that these activities bring about long term benefits to the company in terms of profit and goodwill whereas, according to some other researchers, the corporate social responsibility activities lead to a distraction of the business from its key economic objectives. Corporate social responsibility activities are known to benefit companies across the world in different arenas such as risk management, human resources, brand differentiation, image building and sales increase. Discussion Answer 1 The Better Cotton Initiative (BCI) is an organization founded by IKEA with an aim to establish a commitment to reduce the environmental hazard created by the cotton production processes. The BCI is a multi-stakeholder initiative towards improving the living standards of people in the cotton producing regions. The organization also aims to create demand for organic cotton, i.e. cotton which is sustainably produced to protect the environment from the harmful hazards of the general cotton production system (Bakan, 2005, p.115). The organization consists of a number of stakeholder partners including producers of cotton, retailers of cotton and garment companies, different garment brands which are active takers of cotton, manufacturers and suppliers of cotton (Heath, 2006, pp. 533–557). The manufacturers and suppliers may include spinners, ginners, financial institutions, mills, cut and sew industries, and traders. The members of the Better Cotton Initiative (BCI) include different big companies such as H&M, Nike, Marks & Spencer, Adidas, Levis Strauss etc., as well as different environmental and social organizations such as the International Labor Rights Forum and the World Wide Fund for Nature (Zimmer, 2011, p. 114). This organization aims to transform the textile industry by making it more sustainable in accordance with the changing global demands and concern for protecting the environment (Crane and Matten, 2010, pp. 57–58). Hennes & Mauritz (H&M) is an active participant of the Better Cotton Initiative (BCI). The company uses 100% organic cotton for manufacturing its products. The cotton used by H&M has been certified by different certification authorities under the Organic Content Standard. The company focuses on the benefits of using organic cotton for the environment and the business. The manufacturing process of organic cotton involves no use of chemically harmful fertilizers or chemical pesticides and facilitates the reduction in water usage for the manufacturing process (Ruggie, 2004, pp. 499–531). H&M has a mission of using only organic cotton sourced from sustainable sources by 2020. The company also ensures that recycled cotton is extensively used in the manufacture of its products. H&M actively participates in different social activities of the BCI, such as educating and supporting farmers for producing better organic cotton (Lawrence, Post and Weber, 2005, p. 415). The factor of civil pressure on the organisation has been a major reason for H&M joining the Better Cotton Initiative (BCI) as part of their corporate social responsibility portfolio. Civil pressure on the companies has increased with the advent of globalisation because the consumers have become more conscious about the companies whose products they use. The choice of companies to buy products from depends majorly on the responsible image of the companies with respect to society and the environment. The majority of labour in the cotton manufacturing and garments industry include children and women, which makes it very important for companies such as H&M to pay close attention to the responsible behaviour demonstrated towards their workers. The labours in this industry have very low wages due to increased occupational divisions and discrimination in the wage levels. Therefore, different environmental non-profit organisations such as the World Wide Fund for Nature (WWF) have carried out strict observations and criticised the cotton manufacturing industry. This has increased the civil pressure on the giants in the textile industry, such as H&M, to increase their concentration on the improvement of the lives of people in cotton producing areas, alleviate the health risks of workers and reduce reliance on pesticides and other harmful chemicals. These pressures have caused companies such as H&M to behave more responsibly towards the community, people and the environment, and thus focus on socially responsible projects (Griseri and Seppala, 2010, p.90). One of the many activities taken up by the company to ensure giving back to society and protecting the environment has been through participating in the Better Cotton Initiative (BCI). Therefore, working with other organisations and NGOs to improve the production processes and take up green initiatives in the process would act in the best interests of the company (Bendell and Murphy, 2002, pp. 27–30). The civic groups, or NGOs, engaged in the BCI can be divided into three major groups (Spar, Lane and Mure, 2003, pp. 451–452). The first are the civic groups who work in the field with the farmers in order to support them in improving the condition of farming. Another group of civic organizations help in supporting the BCI to decide and implement their strategic activities. One more group of NGOs involved in the BCI is those which take decisions autonomously without being impacted by different corporations. Different international civil society organizations, such as UNICEF, World Health organization (WHO) etc., have been actively engaged in the Better Cotton Initiative (BCI) with an aim to improve the living conditions of the workers and the general public in the cotton producing region, focus on the human rights issues related to the cotton producing industry, and create environmental benefits thorough the production processes and supply chains of cotton (Fowler, 2002, pp. 171–181). Answer 2 According to Levy and Kaplan (2009), the corporate social responsibility (CSR) activities of different companies have started encouraging democratic governance but are also trending the concept of privatized governance (Levy and Kaplan, 2009, pp. 431–451). Different businesses have started participating in activities that were previously considered as traditional governmental activities. Multinational companies have started engaging in different socially and environmentally beneficial activities such as protection of human rights, improvement of public health, treatment of major diseases such as HIV and AIDS, removal of illiteracy and malnutrition etc. These activities are considered as traditional actions of government authorities (Maxwell, Lyon and Hackett, 2000, pp. 513–516). The performance of these activities by private businesses, which are actually considered as government actions, promotes privatized governance in the world. Many businesses have been active members of the United Nations Global Compact with an objective to fill the gaps in the regulatory systems created with the advent in globalization (Scherer and Palazzo, 2011, pp.899–931). Multinational companies perform different functions of implementing, enabling and protecting different citizenship rights, which have traditionally been considered as the responsibility of government authorities. These activities make the multinationals assume the role of government authorities (Witte and Reinicke, 2005, p. 16). The economic role of businesses is stretched to the state, such as governance roles, with the implementation of different corporate social responsibility activities of businesses (Schreck, 2009, pp. 441–442). These activities of different multinationals have demonstrated the increasing involvement of multinationals in the regulatory landscape of the global businesses. Multinationals have also started affecting the regulatory policies through different corporate social responsible practices, which was earlier in the sole discretion of the state and its agencies (Vogel, 2005, p. 180). According to the theory of Levy and Kaplan (2008), the CSR activities have become a potential source of global governance in which the roles and responsibilities of the government authorities and the multinational companies have become blurred. The whole regulatory framework has shifted from being a state controlled one to a multi-level system in which the multinationals have major roles to play. The political corporate social responsibility activities make the regulatory framework to be majorly dominated by an increased level of privatized governance. This makes it easier for the multinational companies to influence the regulatory policies in keeping with their business requirements. Thus, the CSR framework act as a double movement in which a lot of societal protectionism is gained as well as the influence of privatized governance increases. With increasing CSR activities into the foray of development, the international businesses and the governance practices have become correlated with the political perspective of these activities becoming more and more significant in influencing the decision making processes of the regulatory systems. Answer 3 The participation of H&M in the Better Cotton Initiative (BCI) would ensure much strength of the business through achieving sustainability on the back of the changing global scenario. The company is likely to experience growth in its profitability as well as more corporate strength in influencing the regulatory activities (Friedman, 1970, pp. 61–62). The corporate social responsibility of the company by engaging in the activities to promote the production and use of cotton in a socially and environmentally beneficial way increases the strength of the company in influencing the practices and rules in the textile industry. The participation of H&M in this initiative will lead to the company having more control on the whole supply chain of cotton which is the main raw material for their business. Controlling the supply chain elements like the manufacturers and distributors of cotton would help the company to boost their business as well as become a powerful player in the regulatory system. The company will have more control on the regulations and policies as well as more support from the people in the cotton manufacturing region. This will help the company to assume a more powerful role from the political perspective with much control gained on the governance of the countries in which the Better Cotton Initiative (BCI) is implemented. There may be various political effects of the company’s involvement in the Better Cotton Initiative, which would help the company to majorly transform the market (Baron, 2001, pp. 7–45). The socially responsible activities of H&M through the Better Cotton Initiative have driven new mechanisms of governance, which are likely to dominate the textile industry in future (Steurer, 2009, p. 14). The company has been efficient in using its resources and capital for ensuring that the economic conditions and lifestyle of the cotton producing regions are supported and improved, thus making it a strong influencer in the trend of private governance (Laufer, 2003, pp. 253–261). The company, along with other members such as corporations, nonprofit organizations and other non-governmental players, influences the establishment of new regulatory regimes. Conclusion Corporate social responsibility activities have emerged as critical influencers of the political and regulatory systems. The different initiatives taken by multinationals to improve the societal factors have driven the popularity of the trend of private governance over democratic governance. Much of the CSR activities are designed and implemented by the multinationals with an objective to influence the system of governance in the specific countries in which they operate. Along with the benefits to the society, these activities are intended to suit their requirements as well because all CSR activities are aimed to be beneficial for the companies. An impact on the governance activities help the companies to have a better control in the policy making process and if necessary they can also influence the regulatory system through increased private governance. H&M has implemented major corporate social responsible practices through its participation in the Better Cotton Initiative (BCI) and other corporate social responsible activities. The corporate social responsible activities taken up by different multinationals have started driving the trend of privatised governance. The privatised governance is encouraged by the public as many gaps have been filled by multinationals, which have been left unattended by the state and other related agencies. References Bakan, J. 2005. The Corporation: The Pathological Pursuit of Profit and Power. London: Constable. 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