Challenges to Strategy Implementation by Global Manufacturer of Mining and Construction Equipment - Case Study Example

Assignment 2 Name: Lecturer: Course: Date: Caterpillar Introduction Caterpillar is a major global manufacturer of mining and construction equipment as well as natural gas and diesel engines. For over 85 years, the company has made sustainable progress in advancing human rights and promoting positive environmental impact. The company is a major employer boasting of a staff around 132,000 members worldwide. Given its extensive global network, the company has made advances in causing positive change to the environment and the society. It has therefore strove to keep a balanced relationship between promoting human rights and positive environmental impacts1. In this respect, the company has made its core objective to involve itself in protection of the environment and human rights. To formalize its commitment, the company is a member of the United Nations Global Compact and has been globally recognized for fronting social and environmental performance in its respective industry. Despite these advancements, the company still believes that a range of changes have to be made and projects launched to express its compliance with the principles of global compact. The company is therefore of the opinion that it has to advance its commitment based on principle 1 and 22. Principle 1: "Businesses should support and respect the protection of internationally proclaimed human rights." Principle 8: "Businesses should undertake initiatives to promote greater environmental responsibility." Principle 1: With this regard, the company has made its key objective to ensure enjoyment of human rights across its global network, where it has been involved in protecting all employees of natural harms or actions of others and supporting life through corporate social responsibility. Until now, the company’s commitment to human rights responsibilities has been through voluntary codes and projects. Assessing the company’s key operations and product line in these areas shows that the company seeks key recommendations to both of the principles. Principle 2: Caterpillar’s continual engagement with corporate social responsibilities (CSR) in fields of environmental protection, sustained education and its philanthropic donations are some of the key areas where the company has been committed to. For instance, Caterpillar China has won several awards in these fields. In 2011, the company was awarded China Sustainability Award for its efforts in promoting sustainable energy consumption and in creating sustained economic value. For years, the company has been an active promoter of sustainable development through green projects. In China for instance, the company has showed commitment to promoting advancements in using gas power and coalmines in Zhejiang, Shandong, Shanxi among other provinces in China. On other areas, the company has launched a range of educational projects to assist children from poor backgrounds attain educations and vocational skills. For instance, the company’s equipment have been on numerous occasions found in disaster relief areas such as earthquake, while at the same time Caterpillar Foundation and the company’s employees have made donations for victims of natural disasters globally. In 2013 for instance, the company initiated a number of projects such as Job Shadow Day, Caterpillar Forest and microfinance institution to farmers in Beijing. The company has established a set of principles to guide it on its path towards promoting human rights and positive environmental impacts. 1. “Enable economic growth through infrastructure and energy development, and to provide solutions that protect people and preserve the planet.” 2. “To promote the world in which all people’s basic requirements—such as shelter, clean water, sanitation and reliable power—are fulfilled in a way that sustains our environment.” Positive and negative lessons Caterpillar has made efforts in promoting human rights and positive environmental impacts through giving back to the community and manufacturing green products. Despite the CSR objectives causing some financial constraints to the business, the activities have promoted the company’s image and repute by demonstrating their commitment to communities, people and the environment3. Recommendations The company proposes to adopt a set of standards for its overseas operation based on United Nations Global Compact and environmental standards. It also seeks to adopt mandatory annual public reporting on CSR using global reporting initiative principles as well as investor disclosure provisions for mutual funds. The company also proposes to adhere to social and environmental standards that would be facilitated through appointing independent committee to investigate complaints of violation of human rights within the company. The findings of the committee would be assessed by tri-partite compliance review committee which would make recommendations basing on procedures to be taken by employees or business subsidiaries considered to be in violation of human rights4. The company also proposes to initiate information and promotional campaigns that catch the attention of the public to seek to promote human rights and positive environmental impacts. This is viewed on the basis that insufficient knowledge on human rights and sustainable environmental poses a major challenge to and a key barrier in promoting its innovativeness and responsibility. The company also recommends remunerating employees for their efforts that they put in promoting the company. It proposes to review the prescribes salary scales of its employees to ensure equitable packages for workers such as benefits, fair pay, pension land and paid vacations. This is viewed in respect to the fact that it will promote a healthy working environment where employees are motivated to work towards meeting the key objectives of the company in promoting sustainable environment and human rights – such as ensuring that safe working place is ensured and that workers are not exposed to work under dangerous and unhealthy conditions5. Benefits to stakeholders The company proposes to apply the theory of CSR in adopting the recommendations. The theory postulates that the company will in itself benefit from these recommendations by helping to create stable workforce and thriving communities. The company is also expected to benefit from a good image as a human rights promoter. The surrounding communities will also be able to benefit from these recommendations. The company will commit its wealth and resources to ensure that the environment is not damaged and that it contributes knowledge on use of renewable energy, energy conservation and using eco-friendly alternatives. The company is also expected to benefit from a good image as a promoter of using environmentally friendly products. Challenges to recommendations The key challenges to effective implementation of these recommendations include the fact that the company is faced by the challenge of promoting organizational culture that is in compliance with the strategic objectives of promoting human rights and sustainable environment. This is based on the fact that the company operates through a global network comprising of employees from various backgrounds. With this regard, employees have different expectations of the company which would have to be aligned for the recommendations to take off6. Conclusion Caterpillar Inc has made advances in causing positive change to the environment and the society. It has therefore strove to keep a balanced relationship between promoting human rights and positive environmental impacts. It believes that a range of changes have to be made and projects launched to express its compliance with the principles of global compact. The company is therefore of the opinion that it has to advance its commitment based on principle 1 and 2. References Caterpillar. Caterpillar China Recognized For Sustainability Efforts, [Accessed 29 Dec 203] , 2013. CSR. Recommendations on the implementation of Corporate Social Responsibility Concept in Poland, [Accessed 29 Dec 203] , 2012, pp.13. Daniels Fund Ethics Initiative (2012). Caterpillar, Inc. Becomes an Ethical Role Model. University of New Mexico. [Accessed 29 Dec 2013] , 2012, pp.1-3. Lozano, Josep & Prandi, Maria. Corporate Social Responsibility & Righst. [Accessed 29 Dec 203], 2012, pp.183-184 Polakiewicz, Jorg. Corporate Responsibility to Respect Human Rights: Challenges and Opportunities for Europe and Japan, 2012, pp.45-50. Read More