Asian Management - Sustainability Issues in Asia - Case Study Example

Management Table of Contents Introduction 3 Critical Analysis 3 Conclusion 6 Introduction Sustainability issues have always been an important concernin Asia. It is vital to encourage sustainable development as it is positively linked with economic, social and environmental growth. Economic growth would be ensured only when there is reduction in poverty and living standards of people increase. In doing so, the country has to ensure that all its resources are used sustainably without harming the interest of the future generation. Resource management is essential for ensuring sustainable development. All the three factors are related to each other. Sustainability as an issue for enhancing growth has been recognized by the Asian Development Bank. It has developed a framework which is termed as, strategy 2020. This framework focuses on identifying core issues related to sustainability and then promotes sustainability as a vital plan for development in the long run. There are certain areas which are given significant importance to achieve a sustainable growth. The corporate world has started encouraging Corporate Social Responsibility (CSR) policies to ensure sustainable development. CSR is essential in a business organisation. It would help the corporate to ascertain that the business activities are honest and transparent (Smith and Jalal 2000, 25-60). Critical Analysis There have been various strengths and weaknesses in the process of pursuing sustainable development and CSR policies for most of the Asian countries. Such related issues are critically analysed in this part with respect to countries like China and Japan. The policies of both the countries are compared to understand the essence of sustainable development and CSR policies. China followed a traditional sustainable development and CSR policy in the initial years of the policy development. The policies were based on traditional frameworks governing economic, social and environmental norms. Japan also followed similar strategies to promote harmony in social culture. CSR activities were also strategized to enhance the societal accord. Such developments were ensured through environmental and labour laws. Steps were taken to condemn corruption. The policies are designed in a way that would help both the countries to protect its workers and labourers from exploitation. Sustainable development and CSR policies helped it to minimize risks associated with environmental damage (Chambers, Chapple, Moon, and Sullivan 2003, 40-53). Both the countries had the following strengths and opportunities while pursuing such policies: In China, many companies like Lenovo & TCL followed intensive CSR policies. This was possible due to the fact that they continuously valued and aimed at involving the stakeholders to non-core business operations. Stakeholders are important for a firm as they are the important source of wealth. Long term value is ensured in a corporation in the process to get sustainable development. The role of stakeholders change with various circumstances. The long term survival of business activities and stakeholder’s relationship with the firm enabled companies to pursue sustainable development and CSR policies. Similar opportunities were noticed in Japan. The CSR activities were not related to the core business. Stake holder pressure in Japanese companies was limited. The stakeholders encouraged and recognized the CSR policies (Chapple and Moon 2005, 415-441). The Chinese government always welcomed the process of sustainable development and CSR policies. The CSR activities in China were hugely driven by the state which proved beneficial in the long run. The state promoted laws and order that enhanced business environment. The government standards were appropriate for pursuing sustainable development and CSR policies. In Japan, the CSR activities were not driven by state. The state had limited role. Japan did not have regulatory constraints. The country preferred solutions which were more technological oriented. The country’s technological advancements helped it to implement the CSR policies and maintain sustainable development. The policies in Japan were more supply oriented. This helped in the pursuit of sustainable development strategy (Chapple and Moon 2007, 183-188). Both Japan and China stressed on religious and philosophical principles and this was reflected in their corporate activities. The business operations were guided by cultures and ethics. Business activities were value oriented. The business practices were designed to fulfill social responsibilities. The work culture was driven by honesty and integrity. Individuals in both the nations valued and understood the importance of societal benefits. In such situations, it was easier for both the countries to implement and pursue sustainable development and CSR policies (Matten and Moon 2008, 404-424). China and Japan faced various challenges in the pursuit of sustainable development and CSR policies. Both the countries experienced some contrasting favourable conditions which helped them to identify the scope of sustainable development and CSR policies in the respective nations. However, there were various challenges that hindered the implementation process in both the countries (Williams and Aguilera 2008, 452-472). The weaknesses faced while pursuing the framework can be explained as follows: The Chinese companies initially laid emphasis on the essence of American work culture. The policies and the framework designed by the country also reflected the American culture. The country failed to identify and understand that there is a huge cultural difference between the American and Chinese values and ethics that govern business activities. China adapted the American CSR policies which did not suit the Chinese work culture. There was a gap in implementation. Japan did not encounter such problems. However, Japan always tried to design policy frameworks which were very aggressive in nature. Most of the policies were designed to reflect dominance over business activities. The business environment become rigid and any societal changes are not encouraged. In such cases, it becomes difficult to implement CSR policies effectively to protect interest of the society. Sustainable development policies also cannot be implemented by the country as the environmental integration would be constrained by the rigid policies. In order to pursue sustainable development and CSR policies, it is imperative to value the opinions of the local people. The policies should be designed in a way so that the implementation can be done in a decentralized manner. It is very important to understand local needs and make policies that would also suit the grass root level. Both the countries could not involve the local people and organization. The problems of the multinational corporate were only identified while pursuing the CSR policies. This ultimately led to poor implementation of policies (Tang and Li 2009, 199-212). In China there were no independent unions. This was a major disadvantage for the country in pursuing sustainable development and CSR policies. There was absence of organized labor. Labor productivity was also low and unstable. The trade union did not function properly. They could not protect the interest of the workers. Workers problems were not identified in most cases. The work culture was also not healthy and safe. People lacked motivation. This was a major setback that hindered the development of CSR activities in China. Japan had union activities that gave importance to CSR policies and encouraged sustainable development. However, there was a communication gap between the unions and management as compared to other European countries. This led to various problems and the workers needs were not fulfilled in most situations. In China, the structure of corporate governance changes with the advancement in technology and operations. This forces the country to modify their relationships with their stakeholders. Sometimes, the dominance of the shareholders can restrict policies. The shareholders encourage the maintenance of transparency within the companies. In order to defend shareholder’s interest, the social benefits are overlooked. This poses a challenge for the appropriate implementation of CSR activities. For instance, there are cases where foreign countries decided to take back investment from Chinese companies due to gap in corporate governance. Japan follows strict corporate governance rules. They massively value their culture. The Japanese companies do not encourage diversity in work culture. Human Rights are not given much importance in the country. Various companies like Honda and Toyota fail to get listed in some financial market indexes that reflect adherence to social responsibility. Thus, such scenarios do not encourage CSR activities and as a result sustainable development is hampered (Fukukawa and Moon 2004, 45-59). Both Japan and China have relaxed regulatory forces. There are moderate penalties in both the countries. Laws are not very influential. People do not respect the prevailing regulation. In such situations, it becomes very difficult to pursue sustainable development and CSR policies (Fassin 2008, 364-378). Conclusion The study aimed at, comparing China and Japan with respect to the opportunities and Challenges in pursuing sustainable development and CSR policies. Both the countries have country specific problems and strengths. There were also instances where both the countries experienced similar conditions. After studying the situations in both the countries, it can be concluded that a balance can be achieved through the sustainable development and CSR policies if combined measures can be taken. This measure would include identification of proper regulatory forces, voluntary settlements, market oriented activities and enhancement of culture and information (Welford, 2004, 31-47). Reference List Chambers, Eleanor, Wendy Chapple, Jeremy Moon, and Michael Sullivan. "CSR in Asia: A seven country study of CSR website reporting." (2003). Chapple, Wendy, and Jeremy Moon. "Corporate Social Responsibility (CSR) in Asia A Seven-Country Study of CSR Web Site Reporting." Business & society 44, no. 4 (2005): 415-441. Chapple, Wendy, and Jeremy Moon. "CSR agendas for Asia." Corporate Social Responsibility and Environmental Management 14, no. 4 (2007): 183-188. Fassin, Yves. "SMEs and the fallacy of formalising CSR." Business Ethics: A European Review 17, no. 4 (2008): 364-378. Fukukawa, Kyoko, and Jeremy Moon. "A Japanese model of corporate social responsibility." Journal of Corporate Citizenship 2004, no. 16 (2004): 45-59. Matten, Dirk, and Jeremy Moon. "“Implicit” and “explicit” CSR: A conceptual framework for a comparative understanding of corporate social responsibility."Academy of management Review 33, no. 2 (2008): 404-424. Smith, Douglas V., and Kazi F. Jalal. Sustainable development in Asia. Manila: Asian Development Bank, 2000. Tang, Lu, and Hongmei Li. "Corporate social responsibility communication of Chinese and global corporations in China." Public Relations Review 35, no. 3 (2009): 199-212 Welford, Richard. "Corporate social responsibility in Europe and Asia." Journal of Corporate Citizenship 2004, no. 13 (2004): 31-47. Williams, Cynthia A., and Ruth V. Aguilera. "Corporate social responsibility in a comparative perspective." Oxford handbook of corporate social responsibility (2008): 452-472. Read More