Corporate Social Responsibility of Barclays Bank in the UK - Essay Example

ROLE OF STAKEHOLDERS WITHIN CORPORATE SOCIAL RESPONSIBILITY OF BARCLAYS BANK IN THE UK 14/15 Bashayr Hussain Al-dosari ID: 13366481 TUTOR NAME: David Anderson QUESTION NUMBER: 2 WORD COUNT: MODEL CODE: JUN0005 SEMINAR LETTER: C DAY SEMINAR: MONDAY TIME OF SEMINAR: (11:00 - 12:00)  Submission date: 12/1/2015 Role of Stakeholders within Corporate Social Responsibility of Barclays Bank in the U.K Introduction Corporate social responsibility can be defined as the set of conducts as well as actions that go beyond the requirements of regulations, trade rules and the law. In the modern society, Corporate Social Responsibility is a way of operating in a responsible manner within a competitive business environment; the concept argues that social conducts of organizations are the parameters of measuring their success (Blowfield, 2005). CSR development throughout the world had gone through numerous stages as well as faces after its introduction into the world of business with a history of in excess of 100 years in various developed economies. The first stage was introduced by the philanthropy, then social activism that focused on the protection of the environment. Then again, enactments with respect to the rights of consumers were created that resultantly compelled the change of the corporate practices and humored them to engage in conducts that would make them more agreeable in social, legal and client fulfillment setups(Williams, Siegel and Wright, 2006). The phase that followed in the development of CSR, in the corporate world, rested with the retention of social role which was to be aligned with the profit-taking practices of organizations’ owners. It is important to note that over the years organizational stakeholders, both internal and external, have played a critical role when it comes to the development as well as implementation of CSR. Stakeholders may have a negative or positive influence in CSR. Therefore, in order to understand the role of stakeholders within CSR this paper will look at the influence that both secondary and primary stakeholders of Barclays’ Bank in the U.K have in relation to the bank’s CSR approach. As a way of undertaking stakeholder role, the paper will look at the stakeholder’s theory of CSR with an aim of understanding the role that stakeholders are supposed to play in the bank’s CSR strategy development and implementation. Finally, the paper will look at the role that different stakeholders of the bank play in its CSR. Description of the Barclays Bank and its Stakeholders Barclay is a multinational bank that is British-owned. It provides financial and banking services to its clients. The organization’s headquarter is in London. It is an all-inclusive bank with operations in retail, investment and wholesale banking. The bank is also involved in wealth administration, home loan provision and offers Master card services. It has operations in excess of 50 nations and regions and has customers approximated at about 48 million customers. As of 31 December 2011, Barclays had absolute resources worth $2.42 trillion thereby making it one of the seventh-biggest banking institutions in the world. Barclays is built on certain business bunches. These include wealth and investment administration, corporate as well as investment banking, and business and retail banking. The investment and corporate banking, investment and wealth administration bunch contain three specialty units. These are corporate money keeping, investment management and speculation and wealth management (Barclayscorporate, 2014). The business and retail banking section involve four specialty units which are Africa business and retail banking, Barclaycard, UK business and retail banking and Europe business and retail banking. Barclays follows its roots to a goldsmith who managed a business account created in the City of London in 1690. James Barclay turned into an accomplice in the business in 1736. In 1896 few banks in London and the English territories, including the Backhouses Bank as well as Gurney’s Bank, united as a joint-stock bank under the name Barclays and Co. Over the decades Barclays expanded into a worldwide bank. In 1967, Barclays became the worlds first money distributor. Barclays has been basically listed on the London Stock Exchange and is a constituent of the FTSE 100 Index. It had a business capitalization of about £22 billion as of 23 December 2011 thereby becoming the 22nd biggest organization among the companies that are listed on the London Stock Exchange. The bank also has a secondary listing in other markets such as on the New York Stock Exchange. It is important to note that there are primary and secondary stakeholders who play a critical role in shaping the bank CSR approach in the UK market. The bank’s primary stakeholders are the individuals or groups that are directly influenced, either absolutely or adversely, by an exertion or the activities of the bank. On the other hand, the bank secondary stakeholders are individuals or groups that are indirectly influenced, either positively or negatively, by an exertion or the activities of the bank. Therefore, the bank’s main stakeholders include customers, employees, shareholders, regulators, government and suppliers. On the other hand, the secondary stakeholders of the bank include NGOs, communities and industry associations. Stakeholders Theory on CSR Stakeholder hypothesis are focused around the idea that past shareholders have an enthusiasm towards the activities and choices of organizations. Stakeholders can be defined as groups and people who benefit from or are hurt by, and whose rights are abused or regarded by, corporate activities, notwithstanding shareholders. Stakeholders incorporate government, workers, clients, suppliers, and the communities within which an organization operates. Stakeholder hypothesis attest that organizations have a social obligation that obliges them to consider the diversions of all groups of stakeholders affected by their activities (Antonacopoulou & Meric, 2005). The administration of a firm ought to not to think of itself as shareholders in the decision making methodology. Additionally any individual affected by business choices is considered a stakeholder. As opposed to the traditional perspectives, the stakeholder perspective holds that the objective of any organization is or ought to be the flourishing of the organization and all its stakeholders. Different authors on their studies in the past have recognized primary and optional stakeholders. Primary stakeholders tend to be those, without them proceeding with the investment the enterprise cant make due as a business venture. They include shareholders and financial specialists, workers, clients and suppliers, furthermore governments and groups that give foundations and markets, whose laws and regulations must be complied, and to whom assessments and different commitments may be expected (Freeman & Moutchnik, 2013). On the other hand, secondary stakeholders tend to be the individuals who impact or are impacted by a firm, however, they are not involved in transaction of the company and are not fundamental for its survival. The main challenge of stakeholder theory lies in considering what is known as mute stakeholders as an organizational stakeholder. This on the grounds that most of the definitions of stakeholders generally treat them as people or groups; subsequently barring the natural environment as an issue of definition in light of the fact that it is not a community or group of people as it may seem (Stieb, 2009). It is contended that no one but people can be considered as hierarchical stakeholders and censure endeavors to give the common habitat stakeholder their status (Freeman & Moutchnik, 2013). One method for looking at the environment as key stakeholder is by taking into account the interest related to future generations. In any case, it is difficult to solicit the presumption from the future generations or the natural environment, given that they cannot be part of a consultative board of trustees within an organization. In this way, the issue is that people are fit for producing the important commitments for making stakeholder status and of the fundamental volition in the acknowledgement of benefits of a commonly beneficial, agreeable scheme within which an organization should operate. Power is a stakeholder trait that has been utilized to recognize and prioritize stakeholders; with a few creators proposing that organizations react to the most influential stakeholder issues (Johnson-Cramer & Berman, 2007). For instance, different authors have found that ranger service organizations in Canada as well Sweden concentrated on issues that were pertinent to the most influential stakeholders as opposed to on those issues that were significant from a social or moral responsible point of view. The ‘social extremist’ point of view tends to share with stakeholder hypothesis the thought that organizations are responsible to all stakeholders beyond their shareholders (Coombs and Holladay, 2012). Henceforth, they ought to act to effectively advance social diversions when it is not expected or requested by the society. Organizations ought to be included effectively in projects which can help come up with solutions to different social ills. This can be done by giving business employment opportunities to everybody, enhancing the environment in which the community lives and advancing overall equity regardless of the fact that it will end up costing shareholders money (Key, 1999). Role of Barclay Bank Stakeholders’ Within CSR This part of the paper is concerned with the understanding of the role of Barclay bank’s stakeholders within its CSR. CSR is the idea that gives hypothetical backing to the change in business administration from striving for a quantitative development to striving for subjective change (Williams, Siegel and Wright, 2006). Presently, there is no universal meaning of CSR. Despite having measures that can affect the assessment of the bank’s CSR, the assessment can be done through CSR framework. The framework comprises of a triple primary concern of social, economic and environmental and social issues. An essential issue that needs to be considered within the bank is the relationship that exists between its stakeholder and its overall perspective of CRS. To start with, taking into account, for instance, the case of shareholders, these being the paramount stakeholders within the bank, they play a role in the big profits for their investment within the bank. Hence, in this way they request higher benefits and share prices and growth within a firm. In the event that these are not attained, they frustrate the administration by means of the shareholders council or may decide to sell the shares they hold within the bank. At the end of the day, the activities of shareholders constitute a major variable on the bank’s related activities. Additionally, there have been moves made by shareholders in connection with CSR. The roles related to Socially Responsible Investments (SRI) trusts can be given as a sample within the bank. This is where shareholders have made efforts with an aim of transforming their perspectives about the sole goal of the bank’s management in making profits for them. The SRI initiative has greatly influenced the bank’s approach to its CSR. As a result, most of the potential investors in any organization are considering the social responsibility performance as well as its financial performance (Coombs and Holladay, 2012). Thus, Barclays bank’s management has no option but to ensure that it engages in social responsible activities in order to attract the best investments from different shareholders. This has thus compelled the bank to develop the right programs aimed at improving its image among potential investors as an institution that is concerned about the long term welfare of all its stakeholders. An alternate issue is the connections between the bank’s CSR and associations that are not revenue-driven (NPOs). These are progressively being seen as stakeholders of the bank. The NPOs, that are part of the third sector, notwithstanding government as well as business, have as of late been progressively active in different fields. For example they have been active in welfare, education and environment protection. They are currently creating different connections, as stakeholders, with the CSR activities carried out by the bank. Profit-making organizations and NPOs are in a general sense distinctive. Little is shared between the two and their interests are generally antagonistic. When bank engages in activities that are not in line with what promotes the general welfare of the community or have poor working conditions through prioritizing the quest for benefit, they are overwhelmingly condemned or forcefully uncovered by NPOs (Valor, 2005). Therefore, in this case, NPOs as a secondary stakeholder influences the bank’s CSR by ensuring that the firm engages in activities that contributes to the greater good of other stakeholders, such as the employees and the community (Matten and Crane, 2007). They provide support to individuals who have been wronged by the bank. As a result, the NPOs have over the years forced Barclays bank in the UK market to engage in a socially responsible way for fear of being exposed by these NPOs. Additionally, costumers as stakeholders have greatly influenced the bank’s CSR approach in the UK. Traditionally, the bank was more concerned about introducing products in the market and targeting customers with an intention of making profits only. In the recent years, however, the need to ensure that the products offered by the bank will help in improving the quality of life of its customers has been more evident. The management of Barclays has set up various investment advising sections in most of their branches. The need to retain customers and improve their welfare has played a great role in ensuring that the bank does not only focus on making profits, but also offers the support needed to customers so that they can benefit from its activities. Other critical stakeholders of the bank that have played a vital role in shaping its CSR approach are its employees. The bank’s employees are responsible for developing and implementing its strategies. Therefore, their inputs are important to the overall success of the bank when it comes to the development and implementation of various CSR programs. The main role of the bank’s employees is to ensure that it engages in social responsible activities. In this case, they are expected to involve themselves in activities that promote the bank’s CSR programs rather than damaging the image of the bank in all its operations in the UK market. Furthermore, both primary and secondary stakeholders of the bank have played a crucial role when it comes to providing information to the bank needed to move forward its CSR agenda. The bank has been involved in dialogue with various stakeholders such as employees, shareholders, members of the communities and others on the way it should operate. This has been done with an aim of ensuring that its activities contribute in improving the welfare of the greater members of the society (Williams, Siegel and Wright, 2006). For instance, from the dialogues, the bank has been able to come up with new products and social programs, such as sponsoring football matches, environmental protection programs and other activities. Therefore, the stakeholders of the bank have played a key role in shaping the bank’s CSR programs by providing information needed to develop and implement the CSR activities. So far, the discussion has considered the various relationships that exist between the bank stakeholders and Barclays bank’s management and between the bank’s CSR programs and its stakeholders by focusing on CSR. Thus, it is clear that the connections that exist between the bank and its stakeholders can be clarified as exchange and restriction (Coombs and Holladay, 2012). From the perspectives of the bank, stakeholders work as prohibitive variables and as an asset that can be used in moving the bank forward. Thus, when the bank provides a careful consideration to their associations with stakeholders, the particular attributes of these connections lead to new approaches in which the role of stakeholders in the bank can be assessed. Nonetheless, the new approach has compelled the bank to view different stakeholders as sources of information that can be used in value-creation (Blowfield, 2005). This is especially stamped on the account of the connections between the bank’s CSR and its stakeholders. As already clarified, the qualities of these connections can be either prohibitive or exchange-related. However, in the new, progressively broad pattern, vivacious dialog happens between the bank and its stakeholders and they endeavor to recognize new business administration (Blowfield, 2005). It is clear that, through dialogues and various relationships that exist between Barclay and its stakeholders, the bank has been able to create value from its operations for various parties that are either directly or indirectly impacted by its activities. The value-creation process has been greatly influenced by the bank’s stakeholders who have given their input on what they need from the bank’s operations to look like. Additionally, some of the stakeholders have acted as watchdogs of the bank’s operations thereby forcing it to create value for its primary as well as secondary stakeholders in the long run. For instance, NPOs, regulator and government as stakeholders have greatly influenced by the way the bank provides its services. This has been done by ensuring that it maximizes the value it gives to customers, employees and communities in which its operations are located. Conclusion From the stakeholder perspective, Barclays bank’s stakeholders have played a critical role in its CSR programs. The research reveals that the bank’s stakeholders play a role in providing information that is used in developing the bank’s CSR and at the same time implementing it. For instance, most of the bank’s current CSR programs have come as a result of dialogues where information was exchanged between the bank management and its various stakeholders. Secondly, from this research it is clear that the stakeholders of the bank play the role of enhancing the value of the services and products that the bank offers to its customers and the members of the public within its CSR strategy (Key 1999). Lastly, the bank has greatly focused on the stakeholder perspective when it comes to implementing its CSR strategy. As a result of this, its goals in the recent years have been mainly to ensure that all stakeholders reap different benefits from its operations. In conclusion, the interrelationship that exists between the bank and its stakeholders cannot be depicted as basic contractual exchanges. Besides, it is connections as opposed to exchanges that are the definitive sources of the wealth of the bank and its capacity to secure and keep up such connections inside its whole system of stakeholders that decides its long haul survival and performance (Weber 2008). The bank can, therefore benefit greatly by ensuring that the interests of all stakeholders rather than only its shareholders are fully taken care of; both in the short term and in the long term. References Antonacopoulou, E. P., & Meric, J. 2005, A critique of stake-holder theory: management science or a sophisticated ideology of control?, Corporate Governance, 5(2), 22-33. Barclayscorporate.com, 2014, Corporate Banking | Barclays, [online] Available at: http://www.barclayscorporate.com/ [Accessed 21 Dec. 2014]. 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