Environmental Auditing and Management Systems - Essay Example

Environmental Auditing and Management Systems Introduction Environmental auditing and management systems usually determine an organization’s performance. Often, the external and internal environment of a company plays a critical role in terms of stakeholder relationships and its success, thus must be critically evaluated. This essay focuses on EMS as it relates to the suppliers’ environmental performance, because they form part of the external environment within an organization. It also involves a critical examination the methods for assessing the environmental performance, provides advantages and disadvantages of the methods. In addition, the essay will discuss into details three basic aspects of sustainability and the role of companies in addressing all these three aspects, including the CSR practices as they relate to the organization. The benefits and limitations of using EMS are also discussed at length and ways of identifying and improving social impacts of companies, after which it will establish sustainability indicators when using EMS as well as outlining CSR and sustainability standards. Moreover, the essay gives a detailed discussion on matters relating to shareholder theory in CSR and standardization. Task 1 Suppliers’ Environmental Performance In essence, suppliers’ environmental performance is important to a company adopting an EMS, whether certified or not because of a number of ways. The suppliers form part of the external environment in a company, thus their contribution has significant influence in running a company. Suppliers’ power comes into play when they demand that retailers pay a given amount of money for the supplied goods. Lack of compliance from the side of the retailer means the supplier will not provide the goods. Taking Tesco Company as an example, the entity has an advantage over the small stores as most people tend to do all their shopping in large stores and supermarkets. This enables Tesco to have the ability to dictate the price suppliers will sell goods as failure to comply on the part of suppliers will leave them with no market to supply their goods. According to Rigby, the government needs to increase protection for suppliers and reduce their exploitation by large supermarkets (24). Tesco has a range of its own product which gives it power to fully dictate their price since it does not have to wait for suppliers to provide the goods. These products have strengthened the company’s profits and increase its competitive advantage. In 2007, the company sales were ?42,633.4 million with a 21.9% growth rate in sales (Rigby 44). The suppliers’ environmental assessment fits within an EMS in a number of ways. For example, it promotes ethics and cordial relationships among different suppliers who might be transacting business with the company. In an organization, ethical behavior is imperative because it plays an integral role in helping it achieves the desired environmental management system. It also forms the culture of the organization and fosters the relationship between the stakeholders. Importantly, the analysis of the organizational ethical human behavior is very essential in making ethical managerial decisions, bearing in mind the need for consistency to the international principles of running the affairs of the company. In addition, ethical human behavior presents the dynamic relations, which the company could apply to realize its vision and mission based on the outlined objectives. Therefore, ethical human behavior comprises the fundamental aspects that the people in the organization should adopt in delivering better management services to the potential customers and other stakeholders. Those aspects are core when making ethical decisions about the code of behavior expected from leaders. The value of a comprehensive code of conduct to guide organizational activities is vested in the spirit of the leaders to exercise the organizational culture. As a leader, one of the primary responsibilities is to help shape a culture of ethics at the organization. This is achieved if the leader behaves in a responsible way to serve as a role model in the organization. Since personal values can be hurtful and destructive in an organization, carrying out self evaluation to each worker employed at different level could assist the organization and its people to increase the respect to personal and organizational values, thus being able to boost the volume and quality of production (Lawson 20). In such situation, issues of negative values such as discrimination that might be witnessed in most organizations would not arise. The reason justifying this argument is that an effective process evaluating the adherence to the outlined values ensures that each person understands the limits and the nature of relationship among the workers. This means that self assessment/evaluation helps in harmonizing the relationship between different categories of the workers, thus making it a better recipe for reducing prejudice so that there could be information flow from the higher level down the management system. Methods for Assessing the Environmental Performance Quantitative and qualitative techniques that could be used for the case study methodology sets out the structure and guidelines to be followed in assessing the environmental performance of suppliers must be done in a rigorous and consistent manner. In addition, it excels at helping the readers to understand issues or scenarios which may seem complex and can help strengthen existing data obtained through earlier research. They put emphasis on the details of contextual analysis and relationships of a limited number of conditions and events of a company. This qualitative research method has been widely used by researchers in examining contemporary real-life situations and offers an appropriate basis for the application of ideas as well as the extension of methods. Robert Yin, a researcher, defines case study methodology as an empirical inquiry that investigates an empirical phenomenon in its real-life situation, when the existing barriers between the phenomenon and its situation are not visibly clear; and requires the use of multiple sources as evidence (Yin 23). Advantages of the Methods Case studies generate an enormous amount of data that needs to be systematically organised in order to prevent being overwhelmed by the enormous data and prevent the risk of losing data. Secondary data is data that is already in existence, as it was collected by someone else. This will include published or unpublished articles, letters, library statistics, raw data, published reports, and directories as well as any other relevant data. Secondary data sources are effective as they act as supplementary data, for reference purposes, or act as bench marks for comparison purposes. The advantages include; they are quick, cheap, cover a wide range in terms of space and time, broad database leading to generalizations, and a chance to cross check with primary sources. On the other hand, some of the disadvantages include reliability, availability, suitability, and adequacy. Disadvantages of the Methods This method has been criticised in that the study of a small number of cases lacks ground for reliable conclusion of the findings generated. Also, it is viewed that the intense study carried out may cause bias on the findings. Others dismiss the method as an exploratory tool only. Despite all these, the method still continues to be used in business research with significant breakthroughs in well planned and crafted studies. Marketing reports indicate that qualitative research is a body of research techniques, which seeks insights, through loosely structured, mainly verbal data rather than measurements. Analysis is interpretative, subjective, impressionistic and diagnostic. The benefits of qualitative data research are enormous; one of the major benefits of this research method is that is allows the researcher to engage the sources of information both as the audience of the research and as the focus of the research (Lawson 102). This ensures an involvement in the subject matter as one can gain knowledge directly from them. This is particularly important for this case study, as it will play a great role in meeting the objectives by making it possible to have an engaged and stated relationship with the subjects and sources of information, therefore, obtaining “real” information and data that will help the researcher get closer to the perspectives being examined. A number of steps will be involved in carrying out this case study. These are: Determining and defining the research questions; Secondary sources of data; collecting data in the field and data evaluation and analysis (Lawson 105). Task 2 Three Aspects of Sustainability and the Role of Companies in Addressing All These Three Aspects In business, the three aspects of sustainability include social, economic and environmental. The role of companies in addressing all these three aspects depend on the management practice implemented in the organization. Therefore, as the company strives into the future, it should take keen interest on a number of strategic options. For example, the company should focus on global economic development so that it could change with the trends. This is important for the company’s success in all its business initiatives. Secondly, the company should strategically monitor the global monetary policies so that it could adjust based on the provisions of such regulations (Lynch 26). The company should also be able to detect international weaknesses and capitalise on them. This strategic option indicates that the company has to be agile and flexible in its operations so that it could capitalise on global business dynamics. The company should also avoid unnecessary sceptics in its strategic mission. This means the company could change its mode of operations to suit the state of economic affairs. Engaging in CSR practices is also another significant step that the company could use to address the social, economic and environmental challenges it faces. In this regard, companies are most likely to react to the evidence provided by pretending that the issue CSR does not exist. This owes to the fact that despite the pressure presented by the evidence, companies may not afford to ignore the insurmountable profits accrued to the unethical practices. Considering the amounts low costs of inputs invested towards the production of merchandise, organizations are most likely to ignore the evidence presented. This can continue until more pressure is enforced via other tools like the media. It is also possible that companies respond by pretending to withhold/suspend rather than completely stopping their production processes. They can do this by issuing press statements that give the wrong notion that production processes are stopped completely. A good example is the action taken by the Nike organization. Despite the mounting pressure to stop the unethical practice of child manual labor, the organization only opted to suspend its activities until the world cooled down. The organization pretended to give in the pressure presented that it was using child labor to produce its merchandise. However, it later resumed its endeavors despite the concrete evidence provided against its procedures. The bottom line is that it is extremely hard for organizations to refrain from production based on the evidence provided in the materials. Whichever option firms may take, they will always find a way to come back and enjoy the numerous profits. On the other hand, assuming that companies accept the legality and strength posed by the evidence, there are various measures that can be taken (Lynch 33). One is to improve the working conditions of the workers in third world countries. This can be achieved by ensuring that there are no instances of sexual harassment. Companies can reduce male dominance in the industry. Secondly, the organizations can make their workers in the third world nations proud of being part of the production process. One of the most vital ways of doing this is by eliminating the exploitive contractors at the grass root level. This will provide the organizations with the ability to monitor the level of pay accrued to the workers. If the companies accept the claims made, they can as well decide to involve their grass root workers in their decision making process so that they are made aware of all the companies operations. This will not only reduce the level of criticisms but will also integrate the workers in to the organizational operations. In addition, the firms may also respond to the substantiated claims by introducing a system that allows workers to work from their homes rather than from the industries. This will be of great merit to the workers especially the women. It will help alleviate issues of harassment both verbally and sexually that are because of male domination in the congested work place. Benefits and Limitations of Using EMS In respect to the individual and organizational values also increase the relationship that exists between different leadership levels, defines the relationship between the senior managers and their juniors, thus promoting EMS. Some of the benefits and limitations of using EMS is to achieve organizational goals and sustainable business as outlined bellow. Benefits of Using EMS It improves the quality of service delivery, promotes cohesions and employee relationships. It also increases the quantity of products manufactured. In addition, it improves efficiency in the production process. Limitations of Using EMS Some of the potential limitations include inadequate use of technology, leading to poor quality of the products. It might prove to be an expensive venture for small companies. Furthermore, it might increase the amount of labour required to facilitate production. Identifying and Improving Social Impacts of Companies In reality, it might not be easy to identify and improve social impacts of companies, but it is a necessary organizational practice. By comparison a progressive company implementing social practices with others, there are reasons why different companies do not changed voluntarily or has not been forced to adapt its strategy yet. People who work in several branches of their company in Europe need their jobs and also cheap items to cut their living expenses to improve the social well-being of their organization. A boycott of the cheap pricing policy would lead to increased living costs and perhaps also a loss of labour, a situation that might create adverse social impact in the company. However, if the company is not against their strategy, customers will support their ethical behaviour among employees so that it could improve its social outlook among potential competitors. This consults in an ethical dilemma. The government and the court try to eradicate the gaps in the law and remove the possibility for dumping wages. One reason for the dominance of the company is the lack of competition strong competition in this price level. Furthermore, its presence through its branches and its favourable location invites many customers. The company can be clearly identified as an example of the Shareholder Theory by Friedman. Jost-Stefan Heinig, the business executive of the company, sees its primary duty by maximising the profit and not acting on social responsibility and its impacts. The company has a special way of identifying and making sure that it attracts more potential customers, thus having competitive advantages without affecting its profitability and social impacts. Attracting customers by adopting effective action plans to reward them is a practice that will play a key role in ensuring that the strategies put forward by the firm are not just stories to make the competitors believe that the welfare of employees is put in to serious consideration (Mallin 46). The CSR that the company used towards its clients are improving the entity’s international image, defending the functioning situation and to prevent problems, which could eliminate the confidence of all the stakeholders. Implementing appropriate CSR ensure that the company will most likely to react to the evidence provided by pretending that problems do not exist among its stakeholders. This is due to the fact that despite the pressure presented by the evidence, the company may not afford to ignore the insurmountable profits accrued to the unethical practices. The reason is that it will affect the company’s reputation among the consumers. Considering the amounts low costs of inputs invested towards the production of different items, companies are most likely to ignore the evidence presented. This can continue until more pressure is enforced via other tools like the media so that the company reaches more customers. It is also possible that the company responds by pretending to withhold/suspend rather than completely stopping its production processes, but by promoting its relationship with the consumers (Lynch 49). The company can do this by not issuing statements that give the wrong notion that the production processes are stopped completely. A good perspective is the specific action taken by an individual company to improve its social impacts to stakeholders. Despite the mounting pressure to stop the unethical practice of child manual labor in manufacturing the items, the company only opted to suspend its activities until the issue cooled down. The company pretended to give in the pressure presented that it was using child labor to produce its merchandise so that it could promote its image. Apparently, there are several companies that do not have CSR, neither do they have strategies to improve the social impacts of their activities. Such companies risk becoming irrelevant in the market and could face potential collapse. Essentially, the post-colonial perspective of company-customer relationship arise because of lack of information regarding the role of those companies providing organization in terms of CRS. Owing to the fact that they are never informed of the policies, projects and objectives of the organization, exploitation is not part of their perspective. This means that lack of CSR in those companies is not working for them. As such, company-customer relationship is non-existent to them. Perhaps, the company has no information to think along such lines, thus resort to advertising so that the business increase sale other than engaging in CSR. Sometimes, it would be wiser to use the alternatives if CSR practices proove expensive. Normally, the Public appreciate and recognize CSR efforts by fashion companies because the practices make the entities closer to the customers. Establishing Sustainability Indicators The specific issues related to establishing sustainability indicators in a company include determining the organizational profitability, proper practice of CSR and adequate management. For instance, the concept of sustainability entails the achievement of growth and success ensuring that the systems and materials employed will not deplete natural cycles. In order to establish sustainability indicators, every business must ensure it earns profit and in the long run experiences growth and expansion. Without a rise in the number of sales it has, an organization stops existing. For it to ensure it sustains itself, the management should ensure it maintains the rate at which it brings in profit. An organization can achieve this by maintaining its clients, ensuring the image of the company is maintained and the workers of the organization who deliver the services are well taken care of. Devoid of adhering to these concepts an organization cannot survive. Without profits, the activities the organization is doing to the environment like charity work remain irrelevant because it will not exist. For the business to achieve environmental sustainability, it should ensure it minimizes the rate at which it contaminates the surroundings. This can be realised by depending largely on power that can be renewed. The organization should also put into consideration the processes it takes to ensure a product is converted from a raw material into a useful product. An organization should, for instance, offer recycling opportunities for its product. Those who produce harmful materials after manufacturing products like medicine for instance can devise a method in which the harmful products can be purified so as to be reused. CSR and Sustainability Standards In reference to Corporate Social Responsibility and sustainability standards, the general thought of CSR was that a company, which has implemented CSR, gives back to the society (Blowfield and Murray 4). They defined CSR as the following: “It refers to the obligations of businessmen to pursue those policies, to make those decisions, or to follow those lines of action which are desirable in terms of the objectives and values of our society” (Blowfield and Murray 6). Companies, governments and society had a particular interest in CSR, thus several definitions arose. Dahlsrud (1-11) for instance has identified and analysed the 37 most frequent definitions between the years 1980 and 2003 and identified the following Hopkins definition as a very precise one: “Corporate social burden is concerned with treating the stakeholder of the firm ethically or in a dependable way. ‘Ethically or responsibly’ means treating stakeholders in a way regarded satisfactory in civilised public orders. The social perspectives include investment burden in verifying that the group premiums are upheld. Stakeholders exist both within a solid and outside – case in point, the earth is a stakeholder. The more extensive point of social burden is to make increasingly elevated standards of living, while safeguarding the benefit of the partnership, for folks both within and outside of partnership”. The main aspects of Hopkins definition are the economy, stakeholder, social aspects and voluntariness. Dahlsrud (4) identified in his analysis of the 37 definitions of CSR five core dimensions: environment, society, economy, stakeholder and voluntariness. Only a few definitions of CSR encompass these dimensions. The European Union (EU) offers a widely recognised definition of CSR: “An idea whereby groups join social and earthy concerns in their business operations and in their connection with their stakeholders on a voluntary foundation” (COM 681 final 1). Shareholder Theory in CSR In a theoretical framework, the main content of the shareholder theory can be found in the headline of Milton Friedman’s article in the year 1970: “The Social Responsibility of Business is to Increase its Profits”. In Friedman’s opinion only individuals can act responsibly. This means a corporate executive as a person has a direct liability towards leading the company in the interest of the employer. Thus, the corporate executive’s primary goal should be to generate as much profit as possible by sticking to the basic rules of the society, for instance ethic and justice. Friedman implicates that if an employee acts social responsibly by, for instance, hiring unemployed instead of better qualified workers, the employee does not act in the interest of the employer. According to Friedman, the employee would spend money that does not belong to her or him. If her or his actions implicate a raise of products prices, lower wages or reduce return, she or he would spend money of customers, employees and shareholders. Friedman (2) argues that individuals can feel free to spend their money for charitable service, but the purpose of the company is maximising profit. Additionally, managers have lack of experience in solving societal problems, hence Friedman sees CSR as a main duty of the state (Friedman 1). Friedmans’ opinion was widely discussed in a critical edition of Mallin’s work in the year 2009, which states that “managers are recruited by the owner of a company with the long-term goal of maximising the profit”. Similar to Friedman, the economist implies that companies have a lack of competence to resolve issues of the society. The theory was challenged by Mallin (20) when he indicated that CSR implementers will have to work on data regarding their previous efforts made to stop such societal practices. This proved that the organization was sourcing labor from the country for its items production was never willing to cease from using labor provided by children. Although this may pose numerous challenges, the scholar was justified because the ability of the company to work together and prove their CSR practices will bear fruits. Standardization The company should intensively make use of standardized approach in addressing issues on clean energy, waste diversion and local food. For instance, it can successfully use standardized approach to successfully market its products and to reduce operational risks associated with the business. This will enable the company to generate more revenue that can be generating to other sustainability programmes (Grant 14). The company’s management’s strategies and decisions on handling issues on marketing are very critical in pursuing success. Precisely, the company has to make choices after carefully examining the internal and external factors, which the management assumes to have significant influence on the business. In reality, the extent to which the management understands and harmonizes the interplay between internal and external factors in the company influences the successful marketing strategy that they would adopt. Particularly, the internal factors have a crucial role in establishing the best way, in which the company would carry out their global strategy. To this end, it is of great importance to formulate and adopt expansion strategies so that the company can command a larger market for the volumes of products (Grant 28). Concerning the rationale for using the strategy, expansion is important especially when the primary market is already saturated and that not many people continue purchasing the company’s products. Conclusion In summary, the essay indicated that environmental performance is important to a company, especially when it adopts an EMS. Therefore, the suppliers’ environmental assessment is very significant to the organization because it promotes ethics and cordial relationships among different suppliers, a situation that may improve the organization’s profitability and reputation. In terms of the methods for assessing the environmental performance, the essay employed both qualitative and quantitative to ascertain the impacts of suppliers in the organization. On issues relating to sustainability, the essay established that aspects such as social, economic and environmental play an important role in determining the success of a business. In addition, the way and extent in which an organization engages in CSR impacts its reputation among the competitors. Essentially, improved reputation might increase the consumers’ preference to the organization. Although the use of EMS has limitations, its advantages are central to the success of an organization since they could lead to standardization of the products. Works Cited Blowfield, Michael, and Murray Alan. Corporate Responsibility. Oxford: Oxford University Press, 2011. Print. COM 681 final. Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions. Web. 2 December 2012. Dahlsrud, Alexander. How Corporate Social Responsibility is defined. London: Sage, 2006. Print. Friedman, Milton. University of Michigan. Web. 4 December 2012. Grant, Robert. Contemporary strategy analysis. Malden, MA: Wiley Blackwell, 2005. Print. Lawson, Robert. Strategic operations management: The new competitive advantage. London: Routledge, 2002. Print. Lynch, Richard. Corporate Strategy. Harlow: Prentice Hall, 2003. Print. Mallin, Christine. Corporate Social Responsibility: A Case Study Approach. New York, NY: Edward Elgar Publishing, 2009. Print. Rigby, Elizabeth. “Reform of code for big stores would aid suppliers.”Financial Times (2005): 1. Yin, Robert. Case study research: Design and methods. Newbury Park, CA: Sage, 1984. Print. Read More