Corporate Social Responsibility; Walmart and MSC Initiative - Case Study Example

CORPORATE SOCIAL RESPONSIBILITY By: Corporate Social Responsibility; Walmart and MSC InitiativeCorporate Social Responsibility is a consistent pattern that is upheld by private firms doing more than their expectations as required by the laws and regulations regarding worker health and safety, environment and investments within the regions in which they operate (Crane, Dirk & Laura, 2014). The practices will involve taking place in initiatives that are beneficial to the society. The key significance of participation in corporate social responsibility is to enhance sustainability. There are various tactics that different organization or rather companies will apply. Marine Stewardship Council is a nonprofit organization that has dedicated its operations to ensure sustainable fishing (MSC, 1998). Their mission states, that they are focused, contribute towards the health of the oceans and bring about environmental and economic benefit. This paper seeks to discuss the Corporate Social Responsibility undertaken by Walmart and explain the theories by Levy and Kaplans on the same. In addition, the paper will discuss how the initiative has offered opportunities for civil regulation in reference to the Levy and Kaplans framework. Walmarts participation in the Marine Stewardship Council MSC was set up in London in 1997. Since MSC was inception, it has experienced rapid growth and focused on its role in promoting sustainable fisheries. The organization is able to counter this through the establishment of concrete criteria and principles for fisheries assessment. To ensure credibility, MSC follows the UNFAO guidelines that govern eco labeling of fish and any products related from the marine capture fisheries. MSC takes the role of an accreditor and facilitator through provision of a framework and guidelines regarding sustainable fishery. Most at times, the organization does not involve itself in the whole physical process of certifying fisheries; they focus on endorsing the list of ASI (Accreditation Services International) for the companies that show capability of engaging in the process. In 2006, Walmart announced the availability of MSC product in their stores. Walmart is one of the largest American multinational retail corporations whose main significance is to help people save money and live better lives within the global context. It came into operation in the early 1960s having been founded by Douglas McMillon, operates a chain of stores, and warehouses whose main headquarters are in Arkansas. Walmart operates in close to thirty countries all over the world and has various business units that seek to make a difference in the community. Moreover, Walmart observes the culture of integrity and have different resources to empower and educate the workers on how to make ethical decisions (Krieg, 2013). MSC has three core principles and criteria that define what sustainable fishing entails. First, a fishery has to be carried out in ways that do not result in depletion or overfishing of the exploited populations. It adds that, in case the populations are already depleted, the fishery has to show concerns that lead to recovery. Second, the operations connected with fishing must have space for maintenance of productivity, function, structure, and diversity of the ecosystem. Lastly, fishery should portray a system of effective management that respects the laws and standards within all levels; the local, national and international. In addition, it should incorporate operational and institutional frameworks that observe responsible and sustainable use of resources (MSC, 1998). In order to manage fisheries against the MSC standards, the organization has set twenty-eight performance indicators. In addition, the fishery clients elect an accredited CAB whose main task is to analyze their practices and activities. The organization ensures that there is pre-assessment fishery evaluation and surveillance that take place every year to ensure standards observance. To acknowledge MSC existence, most companies that have links to fishery have adopted the MSC and passed assessment. In the efforts to promote seafood sustainability at world levels, Walmart required all frozen, fresh, farmed, and wild seafood products they sold to be certified as sustainable using the standards set by MSC (Tkacz, 2013). Walmart ensured that all the uncertified fisheries ad suppliers forwarded their work plan to verify their certification and show progress through reports. Walmart gave strict measures to the fisheries that did not meet the requirement threatening to cease from purchasing their products. The primary objective of this initiative was to develop criteria to evaluate seafood sustainability programs. Walmart became a shareholder of MSC since their project was going to boost the operations of the organization. The civil groups have a role in the Walmart-MSC initiative. The civil groups are any relationships that individuals communicate and treat each other to the wider society as a member of a community. MSC, being a nonprofit organization, ensures that all members within the society play part in decision-making. This is the main reason why the civil groups had to get involved and voice their ideas. Critics claim that the main intention of Walmart engaging in such responsibility was for interests for profits for their business, and this was likely to influence the society both negatively and positively. The Walmart-MSC initiative was beneficial since it would ensure that the suppliers maintain reputation and ensure sustainable working. Levy and Kaplans (2009) on CSR In the recent decades, Corporate Social Responsibility initiatives are on the rise particularly in the global political economy. The Multi-National Corporations are expected to show greater responsibility, accountability, and transparency are leading to the formation of new governance structures to control behavior (Levy & Kaplan, 2009). The new structures of governance encounter collaborations among civil society actors, international organizations, and governmental agencies. On the other hand, there exist frequent conflicts and bargains; Levy describes CSR as one of the key sources of global governance that entail mechanism collective decisions concerning transitional challenges with or without the participation from the government. A few factors are responsible for the rise of Corporate Social Responsibility initiatives globally. First, the renewed concerns with influence and power of Multi National Corporations in the early 1990s have affected the developing countries particularly regarding human rights, the environment, and employment. These concerns were first experienced in the 1970s. Multi National Corporations are viewed as platforms of the globalization process that encompasses economic integration and convergence (Levy & Kaplan, 2009). On the other hand, it may bring about uneven development and rising inequality. As the Multi-National Corporations try to weave the networks of global production that link economic, political and geographic divides, they encounter differences in the labor and living standards, individual rights and healthcare. In addition, they induce processes of diffusion and cultural hybridization that pose challenges to the local identities. It is, therefore, a fact that Multi-National Corporations have a likelihood of becoming symbols of imperialism, colonialism and exploitation in the new age (Sacconi, 2011). The growing concern of governance deficit within the international arena has lead to many organizations and companies embracing corporate capacity (Visser, 2012). International economic integration uses its transnational social and environmental impacts to create more demand for responses to restraining the capacities by the existing institutions. The governments of most developing countries have changed their positions regarding restriction towards the Multi-National Corporations and have come forward to collaborate with them that entail support for Corporate Social Responsibility. Engaging in business with issues of corporate responsibility has been attributed to two main motivations, political and financial factors (Crane, Dirk & Laura, 2014). The CSR advocates use this advantage to take good care of a wide range of stakeholders for the best long-term interests of the firm. There are economic rewards that are attached to Corporate Social Responsibility. Regarding the demand side, there exist attractive niche markets for the green products and opportunities for reducing materials, cost of energy and waste disposal on the production side. Corporate Social Responsibility has the capacity to generate positive market image, minimize insurance, legal compliance and liability costs, and improve the morale of the employees (Sacconi, 2011). The Multi-National Corporations indeed have many benefits gained through supporting growth and market expansions within global developing countries. Regardless of these claims, there exist weak relationships between measures of financial performance and social responsibility. The market demand for Corporate Social Responsibility faces limitations from the narrow niche segments making it a challenge to realize the financial value of supplying CSR to stakeholders as opposed to consumers. The political character within CSR explains the weakness in the economic argument. CSR portrays changes that are happening in the balance of social forces. Such social forces include growth of consumer pressures and the nongovernmental organizations. There is evident political motivation by companies to participate proactively with societal pressure meant to allow business to dilute the pressure and ensure that there are changes that favor the business. Corporate environmental management is the effort meant to retain political sustainability through the social and regulatory problems. This implies that corporate social responsibilities is a way of accommodating pressures, further portray the organization as a moral agent, and reduce the regulation threat. Evidently, the Multinational corporations seek to shape the real meaning of corporate social responsibility through avenues that deflect their radical capability hence stressing on voluntarism as opposed to the legal obligation. As a system of multi-level standards, norms, rules and expectations, corporate social responsibility exemplifies the real meaning of global governance (Levy & Kaplan, 2009). CSR, in organizational terms, comprises of an organization that is socially constructed. The institutional theory illustrates the aspects related to corporate behavior that have no connections to the competitive pressures in the market. The legitimacy of corporate social responsibility is guided by the national context. Corporations take a post-structural perspective that entails individual’s subjection and identities (Sun, Jim & David, 2010). Likewise, Global governance is seen as pervasive mode of power that originates from the disciplinary and constitutive effects of discourse. In reference to this framework, corporate social responsibility takes the position of a representative of discursive practices and texts that illustrates the corporate subjectivity and all the sections that the corporate operates as domains of actions that are socially acceptable. CSR does not only represent a struggle over practices, but rather a degree of governance authority that offer potential avenues towards stakeholder transformation from outside petitioners and observers into organized and legitimate decision makers. In the context of democratic governance, CSR is associated with the emergence of global civil society. In addition, it portrays diffusion within the state authority that leads to network of actors that are more decentralized (Levy & Kaplan, 2009). The civil society has shown potential in its significance as an aspect of global governance. The diffusion of authority illustrates a positive development and possible improvement in democracy, capacity in solving problems and accountability that requires action at global levels. As privatized governance, CSR portrays the locus of authority in the corporate sectors as opposed to civil society elements; reflects a corporate economic rationality. Enforcement of the private regimes operates through auditing, reporting, and inspection that is done by other private authorities. There is also evidence of privatization of governance within the substantial corporate influence geared to come up with formal international regimes. Application of the framework As seen in the case of Walmart- MSC initiative, the stakeholders show desires of taking advantage and using it to boost their share value. The initiative offers opportunities for civic groups to regulate the activities and operations since MSC is a nonprofit organization. The positive effects of the association include attracting more consumers using the environment friendly values, improving Walmart competitively and further increasing their profits as a result of the good image to the society. Using this initiative, Walmart ensure that the society does not view them as a company that is thirsty of profits but rather as an organization concerned with the betterment of the society. Contrary, Walmart may face challenges that include struggle in finding suitable providers that may result to rise in prices. Due to the smaller variety of choices, Walmart may experience loss. The framework by Can Levy and Kaplans provides illustrations of the political effects of global governance initiatives such as this one by MSC and Walmart. The civil groups have impacts on the actions of MSC since they want to be viewed in an ethical and positive manner. The initiative is beneficial to suppliers since there is sustainable working and reputation while, on the other hand, it might be expensive to implement. Bibliography Crane, Andrew, Dirk Matten, and Laura J. Spence. Corporate Social Responsibility: Readings and Cases in a Global Context. London: Routledge, 2014. Levy, D.L. & Kaplan, R. (2009). “Corporate Social Responsibility and Theories of Global Governance: Strategic Contestation in Global Issue Arenas”. In A. Crane, A. McWilliams, D. Mattn & J. (Moon (eds.), Oxford Handbook of Corporate Social Responsibility, Oxford University Press, Oxford. Krieg, Katherine. Sam Walton: Founder of the Walmart Empire. 2013 Marine Stewardship Council, and International Collective in Support of Fishworkers. Fish Stakes: The Pros and Cons of the Marine Stewardship Council Initiative : a Debate from the Pages of SAMUDRA Report. Chennai: International Collective in Support of Fishworkers, 1998. Sacconi, Lorenzo. 2011. Corporate social responsibility and corporate governance: the contribution of economic theory and related disciplines. Houndmills, Basingstoke, Hampshire: Palgrave Macmillan. Sun, William, Jim Stewart, and David Pollard. Reframing Corporate Social Responsibility Lessons from the Global Financial Crisis. Bingley, U.K.: Emerald, 2010. Tkacz, Bob. "Walmart Launches Project to Evaluate Seafood Sustainability - Alaska Journal of Commerce - October Issue 2 2013 - Anchorage, AK." The Alaska Journal of Commerce. Last modified August 7, 2013. http://www.alaskajournal.com/Alaska-Journal-of-Commerce/October-Issue-2-2013/Walmart-launches-project-to-evaluate-seafood-sustainability/. Visser, Wayne. Corporate Sustainability & Responsibility An Introductory Text on CSR Theory & Practice - Past, Present & Future. Cork: BookBaby, 2012. Read More