Corporate Social Responsibility - Case Study Example

CORPORATE SOCIAL RESPONSIBILITY Executive Summary Customarily, corporations disregarded CSR and those with a little knowledge about its practices would develop rapidly above the rest of the competitors. CSR, then, would attract the attention of customers and use its practices to meet their needs. It was an economic era where CSR practices were vague and the multiple theories existing today were not prevalent. However, today, due to multiple advancements in technology and the corporate world, CSR is has become an important facilitator of attaining organizational objectives, and vision for the stakeholders. This report explores corporate social responsibility in different organizational and national contexts focusing on its six core characteristics, theoretical avenues and the diversity of theoretical concepts in CSR. With a firm foundation and understanding of CSR, the final section focuses on Nike’s current strategic approaches to fulfilling their responsibility to the public. Upon evaluating this, there are recommendations on how Nike could develop their overall CSR strategy for better results. Corporate Social Responsibility, Core Characteristics and Theoretical Avenues Today Due to multiple advancements in technology and the corporate world, CSR is an important facilitator of attaining organizational objectives, and vision for the stakeholders. Nonetheless, there are factors that companies still neglect such as improvement of workers, the public and the external settings of the organization. Definitely, these factors require extended attention since they are among the core determinants of the CSR policies and programs’ success according to the multiple stakeholder orientation and internalizing or managing externalities characteristics. The CSR concept helps an organization have an impact on the external environments and the community overcoming segregation and focusing on the economic bodies; however, the concept works when the societal and virtuous aspects of the corporation are not among the core determinants of CSR development (Agarwal, 2013). Initially, corporations used CSR as a tool for competition with the core objectives revolving around market dominance, extended financial gains and survival over the rest of the competition as opposed to the alignment of social and economic responsibilities concept that integrates profitability and corporate social responsibility. However, through vast studies and debate on the CSR topic, the corporate world has developed with most of the companies focusing on how their business can have significance in the broader society as part of the organizational objectives(Carroll, 1999). For instance, since 2010, Nike has adopted the strategy of recycled polyester where the company uses waste bottle as the core material for manufacturing high-performance gear (Nike, 2015). Essentially, CSR has developed over a short period with the industrial sectors, organizations and nations pulling more resources and interests towards the strategic approaches. Nonetheless, only a few of these bodies have a clear definition of social performance; despite its importance and being the core aspect of CSR, social performance is among the most derided aspects. In fact, it comes second to augmenting profitability and other financial gains. Among the core objectives of most companies is reasonable development; a goal that most the industrial sectors, organizations and nations have a hard time achieving and the indifferences from their achievements of this are because of the disability to internalize/manage externalities with aspects such as timeframe, definition of the CSR strategies and background of the company acting as determinants. Appreciably, CSR guarantees sustainability and progress depending on resources and time used on the strategies; however, others would argue that managements and the depth of improvement in corporate practices should be incorporated in the strategies for organizations to flourish. Normally, concrete CSR strategies consider about environment and social implications before the economic insinuations. Nike has been in the limelight for excellent CSR approaches that focus on making the environment a better place i.e. Reuse-a –shoe initiative where the company collects worn out athlete shoes and transforms them into high performance gear (Nike, 2015). Typically, the social and environment factors develop a situation for progressive conglomerate thus facilitating justified development (Peppas, 2009). The discrepancies in justified development lie in the CSR programs’ practices and values. Even though some of the companies’ main aim is the profitability aspect, most of the 21st century industries, organizations and nations understand that the strategies should focus solely on giving back to the society, improving the organization’s environment and showing the consumers their significance in organizational development. Essentially, companies with standard CSR interests also need the financial gains but the difference is their ranking of priorities and perspective of what CSR strategies should entail. The profitability aspect only applies as remuneration. However, organization objectives of CSR objectives mostly create pressure between corporations and their consumers. This results from the modern world’s imbalance between positive practice and less expenses. Resultantly, the customers feel the most effect from this modern conception because according to their understanding, experiences from the past dictate the present and future. How companies used to act before CSR’s prevalence has more impact than what they are doing today relative to meeting public interests. Although, CSR concepts and characteristics are popular today, there are companies that still defy these characteristics, which affect the perception and trust of customers. Many of the leading companies acknowledge the importance of having CSR strategies and even though the key element is meeting public interests; private wealth is the main target, especially for the management teams and corporate leaders. In fact, most of these companies violate labor and human rights through the CSR programs unconsciously yet the employees and consumers are at the center of its social impacts. However, other companies, with Nike at the forefront, work to improve the lives of employees by creating workplace environments that focus on collaboration, partnership and transparency, especially in contract factories (Nike, 2015). Unlike most of the modern world CSR strategies, this approach displays assurance towards work engagement and working conditions that are conducive. Personal interests are the main facilitators of most failures but CSR programs in the modern world are not successful because of multiple factors. Definitely, self-interests are the core influencers of CSR failure together with the organizations lacking to suffice pecuniary, permissible, moral and preference prospectsof the public (Logsdon, 2005). Appreciably, the CSR topic has developed to great heights and a few economists and business researchers have formulated theories and concepts relative to the essentials of CSR. These theoretical avenues form a standard foundation that influences organizations on strategic approaches towards CSR. Among the multiple theories and principles discussing the ethics and morals of CSR, the Principles of Ability and Contribution make comprehensive arguments regarding the best strategies, approaches and initiatives organizations should take. Primarily, the Principle of Ability explicates the significance of corporations applying CSR initiatives that aim at spreading out their success and development to the community. However, the CSR strategies should be as a form of gratitude and exploitation of the power and resources the organizations have (Alzola, 2008). The utilization of corporate resources without any benefiting expectations is the general idea behind the Principle of Ability. Then again, the Principle of Contribution emphasizes on inadvertent and principle accountability of companies underlining that in occurrences where customers need amends; that particular company should observe their rights. Nonetheless, these reparations should make CSR appear as a duty to the society, which is a good example of the beyond philanthropy characteristic of CSR. Unfortunately, similar to the perception of this characteristic,most companies are not popular with the principle of contribution yet it escalates and inspires the idea of meeting public needs (Viser, 2010). Commonly, the public, particularly those who are part of a corporation’s external environment should relish the advantages and possessions resulting from organizational development. Summary of Nike’s Strategic Approaches in Corporate Social Responsibility Nike Inc. is among the most developed companies today due to substantial strategic approaches in most of the corporate projects. In corporate social growth, Nike uses innovation and inspiration as the core strategies for development and countering most of the challenges (Connor, 2014). According to their recent report, this strategy is a depiction of the athletes, consumers and investors’ expectations enabling standard elevations in overall performance, which automatically raises competition (Nike Inc., 2015). This CSR approach acts as countering strategy towards the modern world unprecedented changes such as rapid population increase, discriminating connectivity, controlled resources and augmented demand. As far as Nike is concerned, their CSR approach is more of changing point because through the observation of the six essential characteristics; the company has experienced multiple benefits and attained sustainability. Nike’s CEO says the key secret towards achieving this is establishing the power path of innovation between the social and environmental sustainability (Nike Inc., 2015). Additionally, among Nike’s concern under their CSR strategies is the labor and human rights, which remain to be a corporate worry in their production of footwear, apparel and equipment. The production of multiple brands, particularly in the apparel factories, has always made it complex for Nike to maintain the required standards (Connor, 2014). Even with such substantial CSR strategies and understanding of the multiple stakeholder orientation characteristic; monitoring of the workplace conditions, salaries and overtime is difficult for Nike. Appreciably, Nike Inc.-through the CEO, admit that this sector is the most challenging, relative to their CSR initiatives and they cannot point out multiple challenges in this section (Connor, 2014). However, based on the elaboration and current affairs, the challenges emanate from their incapability to identify and adapt to long-term and nation-wide changes, which also reflects on the company’s recent audit. As stated in the report, the company had a few targets fall short last and with utter evaluation, they discovered a consistent pattern, especially in the audit of the set strategies aimed at the development of workers. However, the alterations are not systematic meaning there is hope for countering the current CSR-related challenge. According to Nike, the best way to counter this is formulating new strategies for sustainable (long-term) improvement of workers (Nike Inc., 2015). Among the core suggestions was a complete alteration of how the concerned teams in Nike engage and link with the overall supply chain as further focus on the multiple stakeholder orientation, which could worker but there are other aspects to consider relative to the other five characteristics. Recommendations Based on Nike’s current CSR strategic approach, they need to consider the role and integration of management as among the main alterations. In CSR, the main responsibilities of management teams are making sure there is a comprehensive acknowledgement of rights and considerations of all stakeholders. Nonetheless, today’s corporate leaders assume their responsibilities forcing other stakeholders such as investor to put extensive effort in achieving the CSR objectives. The distractions emanate from the idea that CSR programs should give financial gains, which most of the managers take advantage of by bringing their personal interests first (Matten, 2003). Obviously, stakeholders, consumers and other parties in the organization question the objectives and the results of the CSR initiatives but the managers use their corporate power to protect their true intentions but they are the key facilitators of the important alterations in the CSR initiatives. Normally, managers play the paramount roles in corporate development and in addition to the common leadership practices; they supervise, control, observe staff members’ rights and overall development of the organizational culture. Relative to the importance of CSR, management knowledge and authority are in a better position to review and understand the strategic goals for succession. The core reason why management teams should be at the forefront of Nike’s CSR approaches relates to their familiarization and adherence to the business ethics of conduct. However, this will only work if the managers understand that self-interests come secondary or tertiary to societal needs thus should not affect the success of the CSR (Lindblom, 2010). Customarily, corporations disregarded CSR and those with a little knowledge about its practices would develop rapidly above the rest of the competitors. CSR, then, would attract the attention of customers and use its practices to meet their needs (World Bank Institute, 2007). It was an economic era where CSR practices were vague and the multiple theories existing today were not prevalent. However, even CSR started as a trend for most companies, it led on to become a biased activity after corporations came up with new ways to gain profits from it. This alone gives enough reason for Nike to consider additional approaches as their core CSR strategies (Carroll, 1999). Assertively, Nike should integrate a new approach as part of their core CSR strategies, the focus should be on philanthropy and innovation. Generally, perspective is the core aspect in this approach because the understanding of the general corporation and the customers is equally significant. With a firm foundation of the innovation module of the CSR strategy, the philanthropy section aims at securing certain resources or other techniques to support the community without any expectations of gains. However, the rational self-interest plays a significant is such an approach because it enforces the use of ethical behavior for business practices (Woody, 2007). For instance, Nike could produce new and advanced products for the athletes and consumers but pressure from investors could force them to sell at high prices, which eliminates the purpose of CSR. Innovation should come up only as a development on ideas the community could benefits from Nike’s success in the market. After achieving the CSR goals, the company can now decide to sell the product or exploit the societal interests to surpass the competition. Essentially, the comprehensive CSR approach needs to consider all beneficiaries, particularly the community and stakeholders. This is the only format to deepen pellucidity and accountability simultaneously countering most of the relative challenges. Accordingly, concrete talent management programs form the foundation for talent attraction and retention; however, most corporations overlook the fact that corporate social responsibility strategies could also apply, but through the set programs. Relatively, the control of talent and retaining employees is essential to the development and triumph of any corporation; moreover, the talent initiatives should go hand in hand with engagement and reward strategies, as part of organizational cultures (Allen, 2010). Essentially, this creates a better understanding of people and different traits making it easy to retain and nurture talent; also, it reduces relentless turnover that affects the performance or counters problems relative to labor and human rights as experienced by Nike. The company should consider incorporating retention and recruitment approaches in the CSR as the first step towards the improvement of workers. Firstly, the starting point would be initiating career triangulation and individual classifying approaches that aim at ensuring the employees involve in the overall organization CSR strategy as much as possible. This entails asking for their insight on the strategy, motivation and engagement factors; resultantly, the results of this questions act as a basis for the development. The development process is about improvement and providing equal workplace privileges to every employee (especially those working in the industries) considering personal views and perspectives about various organization facets (Lipman, 2014). Naturally, this will assist in planning, setting concrete objectives and definitely, give the necessary support; certainly, it will make the employees feel appreciated hence giving them more reasons to continue working in the organization. Secondly, trust should be part of the organization’s CSR strategy as a way of creating impressive public relations. This will not only influence retention but also augment staff recommendations (recruitment) and decrease expenses from acquiring talent. Increased performance and retention levels result from inclusive CSR strategies that promote pellucidity (i.e. including employees in the formulation) and trust in all activities; additionally, it reduces the turnover and other relative costs. Finally, the sections of CSR strategy could apply in recognition of worthy performance especially when employees meet the set objectives or surpass everybody’s expectations. This creates an atmosphere of appreciation and gratitude unlike when management overlooks efforts and the staffs feel ignored hence demoralization. The form of recognition does not necessarily have to be about financial or monetary rewards, it can entail many rational actions such as appreciating the contributions as a workforce and community through engaging CSR approaches; however, it is important that managers communicate on what the employees would prefer and come up with initiatives acting as feedback (White, 2014). Different employees have dissimilar interests and knowing personal motivating aspects gives the organization on the best rewards to offer their employees. Generally, this will facilitate the retention of the employees making them feel as essential parts of the organization too. Conclusion Decisively, irrational self-interest is the core facilitator of shortcomings relative to the implementation of the set CSR strategies. The stakeholders should be at the center of these strategies and the financial gains corporations aim at acquiring break the trust of the customers leading to additional crucial damages (Bobby, 2008). Nonetheless, Nike has the chance to be among the first beneficiaries from CSR strategies that acknowledge the significance of philanthropy and putting social obligations prior to other objectives. The recommendations provide a standard solution that Nike could consider as the breakthrough for their labor and human rights challenges. Bibliography Agarwal, G. 2013, ‘Impact of Corporate Social Responsibility on Consumer Behavior’: Journal of Marketing, Vol. 61, no.1, pp.32-115 Allen, D. 2010, ‘Retaining Talent- Investing in the Future of HR’: SHRM Foundations, viewed 15 June 2015, http://www.shrm.org/about/foundation/research/documents/retaining%20talent-%20final.pdf Alzola, M. 2008, ‘when Urgency Matters, On Non-Discretionary Corporate Social Responsibility’: Human Systems Management, Vol.27, no.1, pp.273-282 Bobby, S. 2008, ‘Corporate Social Responsibility- the Good, the Bad and the Ugly’: Critical Sociology, Vol.34, no.1, pp.51-72 Carroll, A. B. 1999. ‘CorporateSocial Responsibility, EvolutionofDefinitional Construct’: Business and Society, vol.38, no.3, pp.268–295 Connor, M. 2014, ‘Nike- Corporate Responsibility at a Tipping Point’: Business Ethics. Viewed 15 June 2015, http://business-ethics.com/2014/01/24/2154-nike-corporate-responsibility-at-a-tipping-point/ Lindblom, L. 2010, ‘Changing Corporate Behavior’: The Nathan Cummings Foundation, Vol.19, pp.1-27 Lipman, V. 2014, ‘How Companies Can Better Engage Critical Skill Talent’: Talent Management, Forbes, viewed 15 June 2015, http://www.forbes.com/sites/victorlipman/2014/03/28/study-explores-how-companies-can-better-engage-critical-skill-talent/ Logsdon, J. 2005, ‘Global Business Citizenship and Voluntary Codes of Ethical Conduct’: Journal of Business Ethics, Vol.59, 55-67 Matten, D. 2003. ‘Behind the Mask:RevealingtheTrueFace of Corporate Citizenship’: Journal of Business Ethics,Vol.45, no.2, pp.109–120 Nike Inc. 2015, ‘Our Sustainability Strategy’: Corporate Social Responsibility Report, Nike. Viewed 15 June 2015, http://www.nikeresponsibility.com/report/content/chapter/our-sustainability-strategy Peppas, S. 2009, ‘Comparison of the Attitudes of Future Managers in China and the USA’: Management Research News, Vol.32, no.4, pp.383-391 Viser, W. 2010, ‘Evolution and Revolution of Corporate Social Responsibility’: CSR International, Vol.21, no.2, pp.1-9 White, T. 2014, ‘How to Retain Top Talent’: Seattle Business, viewed 15 June 2015, http://www.seattlebusinessmag.com/business-corners/how-retain-top-talent Windsor, D. 2006, ‘Corporate Social Responsibility- Three Key Approaches’: Journal of Management Studies, Vol.43, no.1, pp.94-114 World Bank Institute, 2007, ‘Corporate Social Responsibility and Corporate Citizenship in the Arab World’: Centre for International Private Enterprise, Vol.21, no.2, pp.1-12 Woody, V. 2007, ‘Corporate Social Responsibility, Impact on Applying and Buying Behavior’: Faculty of Economics and Business Administration, Vol.14, pp.1-70 Read More