Managing Corporate Social Responsibility and Sustainable Development - Essay Example

Managing Corporate Social Responsibility and Sustainable Development: Learning Journal Name Institution Name Date Introduction Organizations and businesses have to consider the impact of their processes and activities on the economic, environment and society. Different theories and frameworks have been proposed and integrated into the management of these organizations. An example of such frameworks and theories include corporate social responsibility, business ethics, and sustainability. Companies apply these frameworks and theories differently and the purpose of the report is to reflect the application of theories and frameworks on organizations. The focus of the paper is to analyze the implementation of the theories/frameworks in organizations and the effectiveness of the theories/frameworks. The paper starts with a discussion of corporate social responsibility; the second part analyses Lululemon core values based on business ethics, while the third and last part present the sustainability approach and ethical dilemmas that Timberland faced in addressing the Amazon sustainability objective. Corporate Social Responsibility Description of the topic Corporate social responsibility (CSR) continues to gain traction because of numerous variables. The inefficiency of the government, which relied only on regulation and legislation to deliver environmental and social objectives continue to fail, and the solution is for companies and organizations to integrate the CSR into operations (Crane & Matten, 2016). In addition, the demands from the customers and other stakeholders such as activists, communities, employees and suppliers force companies for greater disclosure. In increased customer interest, the customers believe and appreciate large companies should contribute to sustainability beyond providing financial support. Investors also force companies to advance CSR because investors use ethical concerns to inform on investments decisions (Ameer & Othman, 2012). The employees also view beyond the benefits and paychecks and continue to seek out for employers who share similar principles when it comes to operating practices. In hiring and retaining skilled and experienced employees, the companies are forced to improve the working and operating conditions, to incorporate different facets that impact the business. Application of a relevant theoretical framework The general definition of CSR is continuing commitment to operate ethically, contribute positively to economic development, championing human dignity, and improving local society and community. Milton Freidman and Kirk Russell have extensively discussed CSR. Milton Friedman states that the social responsibility of any company is to utilize resource effectively to increase its profit provided it operates within the rules of operation (Brammer, Jackson & Matten, 2012). Conversely, Kirk Russell presents that any organization has a duty and each freedom should be complemented with a corresponding responsibility. Therefore, an organization has to operate within genuine freedom in which social realm and moral realm are championed (Ameer & Othman, 2012). Apart from the profitability aspect, the focus should be to the benefit of other stakeholders such as the community, which the Freidman perspective does not address. Reflection on theoretical concepts and models describe of topic The companies continue to formulate and implement strategic objectives depending on goals (Kim, Park & Wier, 2012). The focus of any organization is the sustainability of the business and the CSR influences the entire process. For instance, if an organization does not support the community, the community can operate against the organization or lack of goodwill, which can impair an organization. The example of Freidman illustrates the role of government in social and environmental sustainability, while an organization employing Russell approach does not require legislation (Schaltegger, Lüdeke-Freund & Hansen, 2012). An organization has to operate morally and ethically to ensure the expectations of different stakeholders are considered. Business Ethics Description of the event Lululemon Athletica Inc. is a Canadian company dealing in the apparel industry and focuses on yoga sector. The company is a designer and producer of technical clothing line that operates local and international stores. The company deals with a variety of products including yoga accessories, pants, shorts and shirts (Lululemon, 2017). It competes in the same sector with Under Armour, Nike, and Athleta. Lululemon’s products are premier and the prices are comparatively higher compared with competitors because of the argument of advanced product formulation and implementation. Lululemon emphasis on sustainable business and operating the business in an ethical manner through embracement of economic, environmental and social health. Moreover, the core values Lululemon champions include greatness, fun, entrepreneurship, balance, integrity, product and quality. Even though the company has defined business ethics through the core values, the company has numerous shortcomings in ethical operations and processes. Lululemon blames customers because of the quality of their products, especially after the see-through problems of the yoga pants. Dockterman (2013) points the company blames the problems of the yoga apparel on the size of women’s thigh after complaints that the pants tore between the thighs. Lululemon also makes false claims about the quality of products such as the use of seaweed to make clothes. Story (2007) states that after numerous independent tests on the VitaSea shirt, the results indicated there was not a difference of the fabric content with normal cotton fabric. The company acknowledged the problem, but it indicates the continuous lying of the company (Baumann-Pauly et al. 2013). Regarding the working conditions of the employees and supply chain requirements, the company somehow supports poor labor regulations stating that it is better for the children to produce the clothes rather staying without employment. The argument is an ethical dilemma weighing between labor rates and alternative source of incomes. Application of Theoretical Framework In the view of Immanuel Kant’s ethics, the poor working conditions overlook human rights and human dignity. The theory states that human beings should be treated as an end product rather than a means of achieving the end product (Ameer & Othman, 2012). However, the argument is against the Shareholders Theory that defines business ethics or sustainability objective is based on profit maximization through reduction of expenses and costs. The aim of the shareholders is an increase in returns and hence an organization has an obligation of capitalizing on returns (Dhaliwal et al. 2012). Utilitarianism theory also supports the sweatshop since the actions taken maximizes the utility for both the workers and the company. The workers are able to earn while the shareholders benefit from the investments. Lululemon continues states that products are of high quality including the engagement with the customer. However, the company is dishonest and does not uphold integrity has contained in core values and ideological business framework (Dhaliwal et al. 2012). For example, saying clothes are made of seaweed and after testing, it is found false, it means the business operates unethically (Ameer & Othman, 2012). The premium pricing of the products lies in the communicated quality of the product, and other production processes, which have been found as false such as the “see-through thigh problem” and wrong claims of raw materials. Reflection on theoretical concepts and models description of Event Lululemon has defined core values, which is expected to be upheld. However, the company does not uphold the business ethics of integrity, honesty even though it champions shareholder expectations. The company has continuously stated it utilizes modern technologies to design and develop products, but some of the products do not meet these promises (Ameer & Othman, 2012). Fat shaming regarding the see-through pants is also ethically and morally wrong because the human dignity should be upheld. The working conditions and the exposure of children to child labor create ethical issues because these children should be learning or participating in childhood related activities (Dhaliwal et al. 2012). The working conditions can affect the health and safety of the children beyond the working period. The Shareholders Theory focuses on maximization on returns, which is appropriate but the company should know it does not operate in a vacuum. It operates in a society, and focusing on shareholder theory may affect the business in the long run if the customers avoid the products or faced with legal/regulatory problem. Sustainability Description of the event Greenpeace and other environment activists have stated that companies such Timberland contributed to deforestation and global warming due to activities in Amazon region (Gaworecki, 2009). The activists argued that Timberland did not support sustainability measures because it continued acquiring leather products from Amazon suppliers, such as Bertin (Nelson, 2009). Greenpeace was arguing that Timberland should implement policies and frameworks similar to other purchases such as Nike but Timberland wanted to take a different philosophy and approach. Swartz (2010) stated that the company engaged with different stakeholders because Greenpeace and other activists were threatening with protests and campaigns to ask customers not to acquire the products. The view of Timberland was not to withdraw from the Brazilian market because the suppliers and other industries supporting the leather industry would be affected. The aim of Timberland is to ensure sustainability through ensuring the suppliers in Brazil upholds sustainability measures, ensuring the cattle-rearing communities understood the importance of sustainability and environment protection while ensuring each of the stakeholders is satisfied. Greenpeace was advocating for Timberland to stop acquiring the raw materials from Brazil, which would have affected the socioeconomic conditions of the community. Timberland proposed solution to Amazon problem was the creation of awareness, educating the society/community, and effective tracking leather lifecycle to prevent new deforestation. Application of relevant theoretical framework The appropriate theory to understand the operations of Timberland is the triple bottom line. Triple bottom line is an accounting framework that incorporates three parts, which are financial, environmental and social. The argument is to go beyond the normal aspects of “profit” and “loss” to other variables impacting business operations. The financial (economic) aspects focus on financial solidity for prolonged and stable action (Aguinis & Glavas, 2012). Timberland aims to maintain profitability for long-term, and the framework provides mechanisms for achieving this requirement. The social aspect focuses on the people/communities, and impact of the business conditions while the environment aspect focuses on protection and affirmation that natural resources are limited (Dhaliwal et al. 2012). Timberland understands the impact of the respective processes and procedures on the social and environmental fronts, and continuously formulates and implements to address the problem. For example, Timberland may decide to stop sourcing the raw materials from Brazil, which would avoid the company from numerous environmental controversies but the company factored the social aspect in which the livelihood of the dependents of cattle was to be considered. Reflection on theoretical concepts and models description of event The triple bottom line framework addresses the approach in which Timberland took to advance the sustainability requirements. If Timberland was another company, the company should have considered shareholder value rather than the impact to the entire stakeholders (Dhaliwal et al. 2012). The decision to engage and collaborate with the suppliers aimed at ensuring the socioeconomic aspects are championed while also sustaining the environment (Aguinis & Glavas, 2012). It results in a win-win situation across the different facets and contributes to long-term profitability. The profitability is attributed to the positive image from the customers, supporting the livelihoods of the Brazilian suppliers, while contributing in creating and implementing measures targeted at sustainability. Conclusion Business main obligation is to address shareholders objective of profitability. However, the aspiration conflicts with the social and environmental concerns since the management of the businesses have to balance numerous variables. Businesses seeking for long term profitability have to understand the benefits of sustainability, and supporting economic, social and environmental requirements. Balancing these numerous variables and factors are crucial in ensuring the different stakeholders are satisfied. Traditionally, businesses were viewed from the profitability and loss angle, but changes within the business sector have introduced new measures such as social accounting in which the success of an organization is viewed from economic, social and environmental prudence. References Aguinis, H., & Glavas, A. (2012). What we know and don’t know about corporate social responsibility a review and research agenda. Journal of Management, 38(4), 932-968. Ameer, R., & Othman, R. (2012). Sustainability practices and corporate financial performance: A study based on the top global corporations. Journal of Business Ethics, 108(1), 61-79. Baumann-Pauly, D., Wickert, C., Spence, L. J., & Scherer, A. G. (2013). Organizing corporate social responsibility in small and large firms: Size matters. Journal of Business Ethics, 115(4), 693-705. Brammer, S., Jackson, G., & Matten, D. (2012). Corporate social responsibility and institutional theory: New perspectives on private governance. Socio-Economic Review, 10(1), 3-28. Crane, A., & Matten, D. (2016). Business ethics: Managing corporate citizenship and sustainability in the age of globalization. Oxford University Press. Dhaliwal, D. S., Radhakrishnan, S., Tsang, A., & Yang, Y. G. (2012). Nonfinancial disclosure and analyst forecast accuracy: International evidence on corporate social responsibility disclosure. The Accounting Review, 87(3), 723-759. Dockterman, E. (November 13, 2013). What Lululemon Could Learn From Abercrombie About Fat Shaming. Time. Retrieved from http://ideas.time.com/2013/11/13/forget-feminist-outrage-by-shunning-plus-size-customers-lululemon-is-making-a-terrible-business-decision/ Gaworecki, M. (July 23, 2009). Timberland needs to step up. Greenpeace. Retrieved from http://www.greenpeace.org/usa/timberland-needs-to-step-up/ Kim, Y., Park, M. S., & Wier, B. (2012). Is earnings quality associated with corporate social responsibility? The Accounting Review, 87(3), 761-796. Lululemon. (2017). Homepage. Retrieved from http://shop.lululemon.com/ Nelson, B. (July 29, 2009). Timberland Leather Won't Come from Amazonian Cattle. Planetsave. Retrieved from http://planetsave.com/2009/07/29/timberland-leather-wont-come-from-amazonian-cattle/ Schaltegger, S., Lüdeke-Freund, F., & Hansen, E. G. (2012). Business cases for sustainability: the role of business model innovation for corporate sustainability. International Journal of Innovation and Sustainable Development, 6(2), 95-119. Story, L. (November 14, 2007). ‘Seaweed’ Clothing Has None, Tests Show. The New York Times. Retrieved from http://www.nytimes.com/2007/11/14/business/14seaweed.html Swartz, J. (September Issue, 2010). How I Did It: Timberland’s CEO on Standing Up to 65,000 Angry Activists. Harvard Business Review. Retrieved from https://hbr.org/2010/09/how-i-did-it-timberlands-ceo-on-standing-up-to-65000-angry-activists Read More