BOEING Aircraft Company: Corporate Social and Ethical Responsibility - Research Proposal Example

BOEING Aircraft Company: Corporate Social and Ethical Responsibility of the of the Introduction In current scenario, businesses have a rising concern towards protecting social environment. This research study would deal with various dimensions of corporate social responsibility. Business criticism process has eventually shaped relationship between business and society. There are wide array of factors taken into consideration by businesses in order to build a socially responsible image. Corporate social responsibility refers to different approaches adopted by firms to reduce impact of business operations on external environment. Social environment encompasses multiple aspects like education, awareness and affluence. Business criticism is initiated through rising expectations present within a society. Stakeholder concept also plays a significant role in context of corporate social responsibility. It can be stated that firm’s operations should be well aligned with all stakeholder’s interest. This enables accomplishment of common goals and objectives. Businesses have to design such strategies that can address these interests and build a strong corporate image. The research study will be centered towards analyzing CSR approach of Boeing Aircraft Company. This company is a part of aerospace defense industry and was founded in 1916. It is a multinational corporation of America and is actively indulged into manufacturing and designing aircrafts. The company is largest amongst aircraft manufacturers across the globe. Boeing Aircraft Company has undertaken series of corporate social responsibility activities in order to set a mark in the aerospace industry. Research aim, objectives and question Research study is based on some constant parameters like research aim, question and objectives. The research aim for this study is – “to analyze ethical and corporate social responsibility of Boeing Aircraft Company.” This study comprises of certain research objectives as discussed below: To determine corporate social responsibility of Boeing Aircraft Company To evaluate various CSR activities implemented by the company To identify importance of stakeholders in context of designing and implementation of CSR approach To apply CSR components – economic, legal, philanthropic and ethical responsibilities on Boeing Aircraft Company These objectives will form the basis of further analysis on this research topic. CSR mechanism of the company shall be analyzed from four perspectives. Research question for this study is – “what are corporate social responsibilities of Boeing Aircraft Company?” The entire study will revolve around this research question. Major objective of this study is to identify ethical behavior exhibited by the largest aircraft manufacturer across the globe. Literature Review According to Freeman and Hasnaoui (2011), corporate social responsibility is all about striking a balance between business power and its societal responsibility. Relationship between responsibility and power is a critical aspect for performing CSR activities. Iron law of responsibility is an important theoretical framework which helps to address this form of relationship. This law clearly states that organizations, who fail to exercise power as per responsibility standards of society, might tend to loose market power in long term. Social contract helps to effectively monitor relationship between society and business (Freeman and Hasnaoui, 2011). The elements of this social contract have been further classified in figure1. Figure 1: Social Contract (Source: Caroll and Buchholtz, 2009) Society plays a significant role in deciding regulations and laws for business. As per Bolton, Kim and O’Gorman (2011), any business needs to be aligned with these parameters in order to establish their position as corporate social responsible. On the other hand, shared understandings exist between society and business. This form of two-way understanding is essential for protecting external environment from any harmful effects resulted due to business operations. Ethical behavior of companies is related to stakeholder theme. There are two groups of stakeholders known as internal and external stakeholder. External stakeholders mainly comprise of government, community, natural environment and consumers. Global and domestic stakeholders are also taken into consideration by companies. Government occupies central position since it represents public. However customers are major stakeholders of any business. CSR approach undertaken by companies includes interests of customers. Internal stakeholders of a company are employees and business owners. Both these stakeholder groups have specific needs and exhibit moral or legal claims on organizations. Social responsibility requires individuals to perform activities in context of entire societal system (Bolton, Kim and O’Gorman, 2011). There is a particular model used for social responsible cycle or business criticism as stated in figure 2. Figure 2; Social Response Cycle (Source: Caroll and Buchholtz, 2009) As per figure2, there is a commitment made by businesses towards social responsibility. This eventually leads to enhanced corporate responsiveness and stakeholder performance. As stated by Campbell (2007), there are three concepts related to corporate citizenship. Firstly is corporate social responsibility which emphasizes on accountability and obligation. Secondly is corporate social responsiveness that is inclined towards activity and action. Lastly, corporate social performance is associated with final results or outcomes. These three concepts are closely knitted with any form of corporate social responsibility approach. The social responsibility aspect includes ethical, economic, philanthropic and legal expectations of organizations (Campbell, 2007). According to Caroll and Buchholtz (2009), corporate social responsibility pyramid encompasses of four major components such as economic, legal, ethical and philanthropic responsibilities. This pyramid has been further elaborated in figure 3. Figure 3: Corporate Social Responsibility Pyramid (Source: Caroll and Buchholtz, 2009) This theoretical framework clearly reveals that economic responsibilities are required of business from society perspective. It is all about being profitable, minimizing costs, maximizing sales, implementing strategic decisions and providing investors with desirable return on investments. Legal responsibilities are also required of business and it indicates obeying laws or regulatory standards. There are wide array of regulations associated with business operations such as consumer and environmental laws, employee protection laws, contractual terms or conditions, guarantees, etc. Ethical responsibilities are certain factors that society expects from any business. These responsibilities are accomplished through eradicating any form of questionable practices. Ethical leadership is a central component of ethical responsibilities. It is about determining what is right, just and fair. Philanthropic responsibilities are expected or desired from organizations. This resembles acquiring suitable characteristics needed for a suitable corporate citizenship. Philanthropic responsibilities encompass corporate contributions, extended programs for community support, volunteerism, community betterment, etc. It is expected that all businesses are able to accomplish these set of responsibilities. In managerial terms, corporate social responsibility is aligned with making profits, corporate citizenship, being ethical and obeying laws. There are four mechanisms through which companies respond to pressures related to CSR approaches. These approaches are defensive approach, strategic approach, cost-benefit approach and learning or innovation approach. Corporate social performance model is another framework for evaluating performance level of companies. This model has three dimensions like categories of social responsibility, social responsiveness philosophy and involvement of social issues. Social responsibility deals with economic, discretionary, legal and ethical aspects (Caroll and Buchholtz, 2009). Stakeholder issues are associated with employees, consumers and environment. Philosophy takes into consideration proaction, defense, accommodation and reaction. Analysis and Findings Boeing Aircraft Company focuses on wide range of factors linked with corporate social responsibility. As per Carroll’s model, the major objective of Boeing is to acquire high profit margins in the industry. The company has a wide base of products which form its competitive advantage. It is the largest aerospace organization with annual revenue margin of $4.1 billion. The company has a strong customer base across 150 countries. Extensive CSR policies have been implemented in this company. Boeing Aircraft Company establishes its corporate citizenship by believing in implementing positive changes. The company has developed a framework of work conditions which protect employees from any harm. Health, safety and environmental protection are major areas of concern for the company. An organization is more determined to perform CSR activities if it is operating in a healthy environment and obtaining high profit margins (Mijatovic and Stokic, 2010). The pyramid model on corporate social responsibility outlines four important dimensions which are adopted by organizations. Boeing Aircraft Company possesses a strong corporate image and it plans to sustain this image through its wide scale of CSR activities. There are precautionary measures implemented by the company so as to safeguard external environment from its business operations. Economic Responsibilities This component of corporate social responsibility lays the foundation for other responsibilities. Any organization needs to be firstly profitable in order to support such activities. Boeing Aircraft Company takes into consideration profitable projects. In modern world a company needs to operate in a healthy environment where market opportunities are high and there is a scope for acquiring high profit margins. This type of environment facilitates conducting corporate social responsibility at a large scale. The company has set its market position as the largest aerospace company across the globe. It is considered to be a leading manufacturer in context of security systems, space and commercial jetliners. Boeing Aircraft Company incorporates best possible measures so as to ensure that their products are of high quality and are able to exceed customer’s expectations. It is even considered as the topmost exporter in United States. The products or services being offered by the company is based on advanced communication and information systems (Millon, 2011). Continuous training and performance based logistic system enables the company to set high targets and acquire high profit margins. This firm even received national award for best quality products by President Bill Clinton. The overall portfolio value of the firm is about $4.1 billion. Legal Responsibilities Legal factors affect business operations to a great extent. Boeing Aircraft Company aligns its business operations with legal standards set forth by United States. These standards are framed by Defense Department, Defense Industry Initiative and Exchange and Securities Commission. The company is actively indulged into designing efficient aircrafts based on advanced technology. Obeying law forms one of the most essential components in corporate social responsibility. It can be stated as a codification which distinguishes wrong from the right. Boeing Aircraft Company is able to abide by the laws by setting it as the base for its overall operational procedure. The company is known for its reasonable taxation levels and fair trade practices. Boeing Aircraft Company believes in collaborative working style. This approach is incorporated by the firm while working with local level, state and federal governmental levels. The company performs its business operations according to laws set forth by topmost authority. Third party organizations are a major support for the company while exercising legal responsibilities. These organizations are public policy groups, international organization, consulting agencies, private associations, etc. It can be stated that legal factors are subject to change and should be incorporated by companies as and when required. Ethical Responsibilities Ethical responsibilities indicate that every organization needs to be ethical specifically while addressing stakeholder’s interests. Boeing Aircraft Company emphasizes on exhibiting ethical behavior. Ethical issues are not only related to workplace environment but even include drastic impact created on external environment. Federal government has taken initiative towards fraud, waste and abuse which is well supported by the company. Ethical management forms an integral part of Boeing Aircraft Company. The company has structured guidelines for business conduct. It is closely knitted with harsh consequences for any kind of misbehavior and ethical management system. Employees are given prior training regarding ethical behavior of the company. The company has successfully framed a program on ethical business conduct and it encompasses seven different areas. It is also known as a system of protective value management. The program encompasses appropriate marketing practices, effectively handling large base of employees, ethically conducted business operations and proper relationships with external and internal stakeholders. Through its ethical conduct, the company is inclined towards enhancing shareholder value (Boeing, 2013). The company over the years has adopted best leadership skills and values so as to ensure that business operations create least possible impact on society. Its ethical foundation is greatly associated with company’s hidden values. Philanthropic Responsibilities This form of responsibilities is linked with well being of the community. The company needs to prove that it exercises practices of being a good corporate citizen. Boeing Aircraft Company undertakes active measures to contribute resources back to the community. This is given back on basis of the philanthropic concept. The company already has invested $179 million, in which maximum percentage comes from business related donations. In recent years this firm has inaugurated a program known as global day of service. Employees are main volunteers of this service and they spread the message of company’s contributions toward community service. Boeing Aircraft Company also has a special award for volunteers who are involved in this program. This company even host Employees Community Fund which is the largest employee owned program across the globe (Venables, 2013). There are wide range of programs encompassed within this project for community growth and development. These initiatives are helping underprivileged children in terms of providing educational support, collecting funds specifically for critical health care, scholarships, job training mainly for unemployed, etc. The company participates in relief programs conducted during worldwide disasters. Boeing Aircraft Company is highly concerned about health of their employees and external community. Human and Health Service program is organized by the company around 15 countries. Conclusion As per this study, corporate social responsibility is an integral factor for all real world companies. These CSR activities not only help to develop a strong corporate image but even facilitate long term survival of a firm. In this research study, a thorough analysis has been conducted on CSR approach undertaken by Boeing Aircraft Company. Over the years this company has set high mark in the industry. It is well-known for its wide array of quality products and efforts taken to meet customer expectations. The entire corporate social responsibility framework has been divided into various sub components such as economic, ethical, legal and philanthropic responsibilities. Boeing Aircraft Company firstly focuses on securing high profit margins. This forms the basis on which other responsibilities are framed and implemented. The company performs activities for community health and service. Employees are actively engaged in structuring programs which could benefit external society. Boeing Aircraft Company has proved to be a good corporate citizen. Its CSR activities not only initiate proper stakeholder management but even enhance long term sustainability in the market place. References Boeing. (2013). About us. Retrieved from: http://www.boeing.com/aboutus/safety_health.html . Bolton, S., Kim, R. and O’Gorman, K. (2011). Corporate social responsibility as a dynamic internal organizational process: A case study. Journal of Business Ethics, 101(1), pp. 61-74. Campbell, J.L. (2007). Why would corporations behave in socially responsible ways? An institutional theory of corporate social responsibility. Academy of Management Review, 32(3), pp. 946 - 967. Caroll, A.B. and Buchholtz, A.K. (2009). Business and society: ethics, sustainability and stakeholder management. New York: Cengage Learning. Freeman, I. and Hasnaoui, A. (2011). The meaning of corporate social responsibility: The vision of four nations. Journal of Business Ethics, 100(3), pp. 419-443. Mijatovic, I. and Stokic, D. (2010). The influence of internal and external codes or CSR practice. Journal of Business Ethics, 94(4), pp. 533-552. Millon, D. (2011). Two models of corporate social responsibility. Wake Forest Law Review, 46(3), pp. 523-540. Venables, M. (2013). Dreamliner becomes Boeing’s nightmare as fleet grounded. Engineering & Technology, 8(2), pp. 24-25. Read More