Drivers Pushing Companies towards Corporate Social Responsibility - Term Paper Example

Supply chain management Supply chain management Introduction Supply chain management falls under the logistics and procurements and refers to the movement of goods and products from the producer, past the supplier to the consumer (Ducassy, n.d.). Companies need a good procurement sector to ensure that their products are sold to the consumers in time. Hence, this ends up increasing the productivity of the company as well as the general performance of the company (Ducassy, n.d.). Corporate social responsibility being employed by various private sectors plays a major role in ensuring that the social cohabitation of the industries is improved as well as the supply of products and services. Corporate social responsibility promotes a vision of business growth and accountability to a wide range of the stakeholder, investors and shareholders of the organization. Key areas of consideration are the environmental protection and the employee well-being, community and civil society both now and the future. Traditional views about competition are being swept away, and instead many companies are considering merging to ensure that their profit levels are maximized as well as productivity increases (Chopra & Meindl, 2007). Apple, for instance, has partnered with Starbucks to ensure that it profitability is not only maximized in the two companies but also their procurement, and logistic sectors get a wide improvement (Chopra & Meindl, 2007). Discussion Drivers pushing companies towards corporate social responsibility Companies tend to move to corporate social responsibility due to various reasons that include economic reasons, consumer disclosure and stakeholders’ interests. Under the economic reasons that there is a continuous change in the way the companies are adapting to the ever changing global economic trends (Ducassy, n.d.). The companies and organizations are also opting for the CSR due to the demand for a greater disclosure (Ducassy, n.d.). Over the years, pressure has been directed to the corporates to merge in order to ensure that productivity is attained (Ducassy, n.d.). Stakeholders and investors play a role in advising the organizations to merge in order to ensure that the performance of the organization is boosted either in the short-run or the long-run (Ducassy, n.d.). Hence, the pressure from the stakeholders has seen to it that these companies merge. Merging of companies is necessary because it leads to an increase in productivity. Corporate social responsibility has also been on the rise due to consumer interest (Scott, n.d.). Research states that the ethical conduct of the organization will always influence the purchasing power of the consumer (Scott, n.d.). Consumers will always prefer an organization that has upheld good ethical values and cater for the society. When companies merge, they maintain a good code of ethics that attracts the consumers. Moreover, it increases the customer base by significant figures (Scott, n.d.). Another factor that leads to CSR is the growing investor pressure (Scott, n.d.). In the present, the investors assess the organizations depending on the ethical values as well as performance (Scott, n.d.). Reports by the non-governmental organizations advocating for efficient management of supply chains, have revealed that the performance of an organization lies solely on the social responsibility of the organization as well as the society in general (Scott, n.d.). Investors play a vital role in influencing the performance and operations of the organization (Scott, n.d.). Hence, they have an influence on the company’s management and operations. Moreover, the labor market is becoming competitive as days go by attributed to the fact that employers prefer employees who are guided by codes of ethics and their operations and philosophies match their principles (Werner, n.d.). In order and retain skilled employees, companies are being advised to change their working environment (Werner, n.d.). Clearly, this has been the reason for the eruption of the corporate social responsibility. The competitiveness of the labour market has also come from the fact that the increasingly qualified employees prefer companies that have a good record of performance (Werner, n.d.). Finally, supplier relations have seen to it that most of these global organizations adopt the corporate social responsibility (Wynne-Powell, 2004). As stakeholders are becoming increasingly interested in business affairs of the organization, many companies are taking steps to ensure that their partners conduct themselves in a socially responsible manner ( Corporate social responsibility (CSR), 2015). Some are introducing codes of conduct and ethics for their suppliers, to ensure that other companies policies or practices do not tarnish their reputation. Coca-Cola, for instance, has ensured that it follows strict regulations and rules that guide their conduct to ensure that it is highly regarded by the consumers (Corporate social responsibility (CSR), 2015). Corporate responsibility is a matter of the way the organization, suppliers and society interrelate. CSR is an increasingly important tool to maximize the positive development impact of organizations and commercial activity in the developing world. In Bangladesh, companies, civil society organizations (CSOs)/NGOs, and development partners have adapted international practices of CSR to the local context and are working in partnership to improve employment opportunities and health care for excluded groups (Corporate social responsibility (CSR), 2015). A massive growth in the industries has been witnessed in those countries that have employed the CSR, as employment opportunities have significantly been on the rise in these countries (Corporate social responsibility (CSR), 2015). Moreover, the supply chain management of these countries has been very effective, leading to consumers getting the products from those companies in time (Corporate social responsibility, 2015). Positive outcomes arising when a business adopts social responsibility When companies employ CSR, it leads to an improved financial performance of the company due to the increased revenue collection as well as reduced costs of production (Werner, n.d.). In 2007, for instance, when Apple Inc. partnered with Starbucks in the supplies and marketing of the products, both companies benefited greatly from the partnership as witnessed by the increase in revenue collection by the two companies. Apple recorded a 4% rise in profits collected in 2009 compared to the 2% rise in 2008 (Werner, n.d.). Moreover, it leads to lowering in costs, because, when two companies come together towards producing a given product, they pool resources that ensure that production is witnessed. A pool of resources leads to the reduced costs of production as could be the case when the company would be single operating. CSR also leads to increased sales and productivity and at the same time enhance brand image and reputation. When companies partner, they ensure that they uphold their conduct leading in customer loyalty and increased sale in their products (Werner, n.d.). Customer loyalty is very necessary for the success of any business. It means that these customers will prefer the goods of that company to that of the rival firms (Werner, n.d.). Hence, this leads to product safety and reduced liability of the products (Werner, n.d.). In either the long-run or the short-run, the company ends up increasing its productivity. It also leads to the company having the ability to retain its employees. Employees play a vital role in any organization because they are the ones that ensure that the operations and tasks of the organization are kept to check. Skilled and experienced employees help in driving the organization to the skies. However, due to labor competitiveness, these employees may decide to seek greener pastures. In this case, CSR will ensure that these companies retain such employees. Moreover, it enhances workforce diversity as well as easing the delegation of duties and tasks (Werner, n.d.). CSR also has benefits to the society and the public in general. The increased charitable events carried out by the organization have impacted positively on the society (Werner, n.d.). There has an improved social amenities and infrastructure in areas that the organizations have been involved in the charity works (Spence & Bourlakis, 2009). Corporate involvement in community education, homelessness, and employment programs has been effective towards raising the standards of living of the society (Ducassy, n.d.). When individuals get employed, it is rather obvious that their social status changes to the better (Ducassy, n.d.). The employee volunteer programs help in enhancing the reputation of the organization. Moreover, it is a marketing strategy that ensures that the consumers get to learn more about the organization. In return, the organization ends up winning the hearts of the consumers as a result of participating in the volunteer programs. Finally, CSR enhances product safety and quality and hence it leads to the marketing of the products to the consumers (Ducassy, n.d.). Corporate social responsibility also has positive impacts on the environment in terms of recyclability of the wastes from the organizations (Ducassy, n.d.). Moreover, there is a better product durability and functionality (Corporate social responsibility, 2015). Renewable resources are mostly put into use by these organizations because of their ability to be used from time to time. Employment of environmental management factors into business plans, and the business include life-cycle assessment and costing, environmental management standards, and eco-labelling. When the wastes are not put into the environment, it leads to the conversation of the environment that in terns lead to the company getting recognized by not only the society but also the environmental bodies (Ducassy, n.d.). In the long-run the organizations end up attracting various stakeholders and shareholders to invest in the company (Supply Chain Management Essentials, n.d.). Social responsibility has been the reason behind the growth of most companies around the globe (Supply Chain Management Essentials, n.d.). Partnering in supply chain management in the construction industry CSR is an evolving business concept around the globe and is based on ethical norms and transparency that contributes to the internal development of the internal and external stakeholders in ensuring that there is growth in the business activities and operations of a given company (Supply Chain Management Essentials, n.d.). Most organizations are now partnering in the supply chain management to ensure that their logistics and procurement sectors are functional and productive. A socially-responsible construction company holds a holistic view of its relations with the stakeholders and measures its performance based on the financial results and its overall productivity (Supply Chain Management Essentials, n.d.). Strategic CSR is increasingly being integrated in the construction industry especially in the supply of the manufactured goods and if implemented it has a number of benefits ranging from increased innovations as well as competitive advantage and opportunities arising on the daily basis (Supply Chain Management Essentials, n.d.). Strategic CSR also ensures that the company focuses on minimizing potential negative operations that may be affecting the organization (Special Topic Forum on Supply Chain Management in Emerging Markets: Critical Research Issues, 2013). CSR is meant to address these problems by addressing any negative value-chain impacts while supporting business strategies and the needs of the community. The supply chain is the focus of for more effective way of creating value clients, as a vehicle for improvement as well as the continuous innovation in the organization, hence leading to an increase in profitability of the organization (Supply Chain Management Essentials, n.d.). Value creation is continuously being viewed as a process facilitated through the supply chain that is a network of relationship that the construction industry is positioned. Firms must build networks to ensure that there is complementariness between the internal and external exchange. In construction, we observe clients, consultants, constructors and suppliers connected by a linkage comprising knowledge transfers, information flow, direction and financial as well as contractual relationships. A typical supply chain starts with the ecological, biological, and political regulation of natural resources, followed by the human sourcing of raw material, and includes several production chains such as construction of the component, assembly, and merging before moving on to several layers of storage facilities of decreasing size and increasingly remote geographical locations, and finally reaching the consumer (Special Topic Forum on Supply Chain Management in Emerging Markets, 2013). Supply chain modelling in a construction industry There is a variety of supply chain models, and their usage depends on the type of company it has been set for. The supply chain operation reference is one of those models and is used on an upward stream level (Special Topic Forum on Supply Chain Management in Emerging Markets, 2013). Supply Chain Operation Reference measures supply chain performance and is used in most of the construction companies (Scott, n.d.). It is a process reference model for supply and performance and is used for delivery and order fulfilment requirements (Scott, n.d.). Moreover, it involves inventory fulfilment, delivery of the products, inventory and asset returns. The American Productivity and Quality Center (APQC) Process Classification Framework (PCF) SM is a high-quality model that is being used by most of the construction industries across the globe (Scott, n.d.). The supply chain model id effective and ensures that suppliers reach the consumers on time. Moreover, it has led to an increased productivity of most of those companies using the model (Corporate social responsibility (CSR), 2015). The PCF organizes operating and management processes into 12 enterprise level categories, including process groups, and over 1,000 processes and associated activities (Corporate social responsibility (CSR), 2015). When these models are used effectively by the construction companies, they end up yielding positive returns to the companies (Corporate social responsibility (CSR), 2015). Supply chain management Supply chain management was incorporated to ensure that there is need to integrate the key business processes from the original suppliers to the end-users. The original supplier refers to the manufacture that is where the products originate while the end user refers to the consumers of the product. The supply chain needs to be managed effectively to ensure that there is an adequate flow of market information as well as an exchange of goods that benefit both the producer and the consumer of the product. Information accessibility is necessary to any company as it ensures that the productivity of the organization and the running of the supply chain are done in an organized manner that bores fruits. Such a good organization leads to better planned overall production and distribution that cuts costs and leads to the production of a high-quality final product (Chopra & Meindl, 2007). In case of a partnership, it leads to improved productivity and sales and thus leads to an impressive revenue collection (Supply Chain Management Essentials, n.d.). Usually, this is always referred to as vertical integration and is employed by most of the construction companies (Supply Chain Management Essentials, n.d.). Incorporation of the supply chain management to leads to a new form of competition that does not involve a company competing with another company but one form of a supply chain versus another form. The basic objective of the supply chain is to fulfil the consumers’ demand for supplying the resources in the best method is currently being used in many organizations around the world and is aimed at ensuring that productivity is impressive (Supply Chain Management Essentials, n.d.). Effective supply management is efficient in ensuring that there are a long-term business process and performance; identify key environmental and social concerns that affect the overall business (Scott, n.d.). Moreover, it is important to ensure that the business supply chain is effective and well maintained as this leads to adequate delivery of the goods and products. Fostering good relationship is effective in ensuring that the operations of the supply chain are well operational and leads to good results (Scott, n.d.). It is believed that a good relationship in the supply chain fosters innovation that ends up leading to the betterment of the procurement system. Countries that have unique procurement systems have seen to it that they benefit from the supply of the products in the most effective way. Apple, for instance, has the best supply chain management system in the world and is advocated due to the fact that the system is unique and values the satisfaction of the consumers. When it comes to supply chain management system, feedback is always very necessary (Tate, Ellram,& Kirchoff, 2010). What the consumers say about the procurement system is always necessary as it leads to either the upward spiral of the organization or the downward spiral. There are various management approach systems when it comes to the procurement systems in the construction industries. All the approaches are meant to ensure that the supply chain system is effective. Project management and the direct procurement guide the direct procurement of goods and services from the organization and the business unit. Hence, the function develops the direct procedure for the business unit incorporated in all the business organizations. The indirect procurement manages the indirect corporate goods and services and the related expenses in the construction industry. The function is responsible for maintaining good relationships with the key suppliers under the organizational framework. When there is a good relationship in the supply sector, it means that the overall operations of the organization will go as planned and will be very effective. Operations manage the supply of goods and services associated with the management of the operation of the organization. Procurement life cycle in the construction industry Procurement goes through a number of phases starting from the point of production to the point when the consumer receives the goods and services (Chopra & Meindl, 2007). The cycle starts with an identification of an opportunity under the procurement that is followed by the proposition of the opportunity (Chopra & Meindl, 2007).. The next step is planning and developing the approvals followed by a detailed and improved tender. Under the detailed and improved tender designs, a number of procurement processes take place. It is then followed by the construction and delivery of the products to the consumers. Usually, this always the last stage in the procurement system. Advantages of the supply chain in the CSR The partnership of companies under the corporate social responsibility is very crucial and has various advantages. When companies come together in order to achieve a single goal, it means that the level of productivity increases either in the short-run or in the long-run (Supply Chain Management Essentials, n.d.). The companies come together and amass funds and resources that they use in the production of goods and services. Hence, a lot of goods are produced within the shortest time possible and meets the consumers’ demand (Supply Chain Management Essentials, n.d.). Consumers always prefer it when the goods reach them on time, and this is the reason why the Apple Inc. supply chain has been the best around the globe. Moreover, the brand and the reputation of the company are enhanced in the case of partnership because companies prefer to keep a good record of ethics and conducts so as to win stakeholders and more consumers (Chopra, & Meindl, 2007). Stakeholders are a vital tool in any organization because they invest in the company (Supply Chain Management Essentials, n.d.). Investment into the company means that they pump funds into the company and this lead to a growth in the organization. Moreover, when these organizations are involved in charity works, it leads to a good relationship between the society and the organization. An existence of good relationship is one of the many ways that are used to sell the company’s brand to the consumers. Moreover, a good supply chain plays a core role in ensuring that there is job creation that ends up raising the standard of living of people in the society. Moreover, supply chain in conjunction with CSR leads to the production of quality goods and services through the good relationship with the society, leading to the company having an edge over the other companies in the market (Werner, n.d.). Challenges and obstacles facing supply chain management in the construction industry Some companies lack ethical norms and good conduct in the business world and hence, they end up tarnishing the name and brands of those companies they have partnered with. Moreover, some suppliers may decide to sell the goods of the company to rival companies leading to unfair competition. Moreover, supplying the company’s products to rival firms leads to the company registering losses and market share (Ducassy, n.d.). The business field lacks key indicators that show the progress of the organization as well as most industries have failed to appreciate the use of CSR in the supply chain (Tate, Ellram, & Kirchoff, 2010). Transparency can help to improve the business in terms of raising the trust between suppliers and consumers (Chopra & Meindl, 2007). The government also needs to impose embargos and penalties to those companies found operating outside their ethical circle. Such penalties include confiscating of the licences from those organizations as this will prevent them from operating in the market as well as doing any business transactions. Conclusion Partnering in the supply chain management in the construction industry is one of those business strategies that are effective in yielding positive returns in the business market, including a good relationship between the organization and the suppliers (Wynne-Powell, 2004). Moreover, corporate social responsibility has ensured that the supply chain systems are effective, because of the belief that when industries merge, they increase their production base (Chopra & Meindl, 2007). On a wider scope, production has increased under the CSR, and the procurement systems have also been effective (Scott, n.d.). However, challenges of lack of trust among the suppliers and internal wrangles affect the supply chain negatively because the suppliers do not trust the producers as seen in the case of most corporate organizations around the globe (Spence & Bourlakis, 2009). Reference Coporate social responsibility (CSR). (2015, May 1). Retrieved May 2, 2015, from https://www.iisd.org/business/issues/sr.aspx Werner, W. (n.d.). Corporate Social Responsibility Initiatives Addressing Social Exclusion in Bangladesh. Retrieved May 2, 2015, from http://www.ncbi.nlm.nih.gov/pmc/articles/PMC2928098 Special Topic Forum on Supply Chain Management in Emerging Markets: Critical Research Issues. (2013). J Supply Chain Manag, 49(3), 112-112. doi:10.1111/jscm.12029 Wynne-Powell, I. (2004). Partnership in supply [supply chain management]. Manufacturing Engineer, 83(2), 34-37. doi:10.1049/me:20040206 Scott, S. (n.d.). Corporate Social Responsibility and the Fetter of Profitability. Social Responsibility Journal, 31-39. Ducassy, I. (n.d.). Does Corporate Social Responsibility Pay Off in Times of Crisis? An Alternate Perspective on the Relationship between Financial and Corporate Social Performance. Corporate Social Responsibility and Environmental Management, N/a-N/a. Tate, w., Ellram, l., & Kirchoff, j. (2010). Corporate Social responsibility reports: a thematic analysis related to supply chain management. Journal Of Supply Chain Management, 46(1), 19-44. doi:10.1111/j.1745-493x.2009.03184.x Spence, L., & Bourlakis, M. (2009). The evolution from corporate social responsibility to supply chain responsibility: the case of Waitrose. Supply Chain Management: An International Journal, 14(4), 291-302. doi:10.1108/13598540910970126 Supply Chain Management Essentials. (n.d.). Retrieved May 2, 2015, from https://cscmp.org/online-courses/scm-essentials Chopra, S., & Meindl, P. (2007). Supply chain management: Strategy, planning, and operation (3rd ed.). Upper Saddle River, N.J.: Pearson Prentice Hall. Read More