Business and Society - Case Study Example

INTRODUCTION Corporate Social responsibility emerged in the 1960’s as a need for the organizations to curb ethical requirements of the consumers (Meehan et al, ). The presence of CSR has caused companies to think up new ideas of innovation and become environment friendly while on the same hand appreciate cost benefits through implementation of CSR. Today the European Commission is promoting effective and ethical policies in the organizations. Marked increase is seen the supply chain organizations. The competition between the companies is leading to an increased effort between the competitors to produce more innovative efforts in the betterment of society. CSR does not return in value in form of money but those companies who incorporate CSR in their dealings are rewarded with exceptional growth in the longer run. Definition of CSR: CSR can be defined as a culmination of certain ideas through which an organization can help the society with socioeconomic issues. It is also explained as business responsibility towards environment. Today corporate success does not only define the economic issues but also incorporates the non economic issues as well. These are Legal, ethical, and philanthropic. Areas of Concern for CSR workability are Workplace, Marketplace, Environment, Community, Ethics, and Human Rights. IDENTIFICATION OF METHODOLOGICAL FRAMEWORK The methodological framework consists of three areas of concern or three stages by which one can assess the CSR activities. These are Analysis, Execution, and Evaluation This is the examination of the internal and the external environments of the organization. Further two types of analysis are involved in it. These are PEST and the SWOT analysis. Then is the stage of setting specific CSR targets for the company. These are both qualitative and quantitative. Then a plan is made and with the plan any alternate course of actions that need to be developed. When we want to start with the analysis stage of the organization we must know what is the meaning of strategic CSR. These are all those activities which are profitable for the company as well as good for the society. In light of this we further our analysis stage by delving into the internal environment and reading of the external environment of the organization. ANALYSIS OF CSR In the first stage the internal and external environments of the organization is assessed. That is we look upon the effects of certain factors which affect the performance of an organization both directly and indirectly. These factors are PEST (Political, economical, social, and Technological).The culmination of this analysis results in the consequent analysis which is the SWOT (Strengths, Weaknesses, Opportunities and threats) analysis. The company identifies the weaknesses and strengths inside the company in respect to the external environment. It transforms its strengths into opportunities and neutralizes weaknesses, this is done as the strength of Toyota is the cars mechanics, the company identifies these and builds a training institute that teaches individuals the mechanics thereby efficiently converting its strength into opportunity and let’s say the weakness is of fuel emission this the company neutralizes by funding for projects that do research in the process of eliminating harmful emissions etc. The company after the analysis of the internal and external environments forms specific CSR targets. These targets define what they could do at the consumer level that would be beneficial for both the company and the consumer. The bond between the employer and the consumer should be such that input is taken at individual level and hence would prove more beneficial and innovative in the formulation of targets. Like more than the manager of the company an employee may be more knowledgeable about customer’s expectations and wants and they could then see to it that it is fulfilled. Like one department might suggest a family orientated place where people could bring their children along while have their cars checked, another department might suggest the need of a specific addition in their Toyota models. After the targets are set the company forms a plan. These plans depend directly on the environment in which the company is operating. For this purpose any the company must then choose alternative course of actions. Also important for enhanced corporate business health are the reduced restrictions by the government. For the company to prosper they must not alienate the customers in a way that they turn to the government to impose restriction on them (Bulkeley, 2001). They should imply ethics in all their dealings as it enhances the trust the customers have in the organization. If on the other hand the stakeholders feel that the company is cheating them in any form then through government the organization will be imposed with restrictions and hence the productivity will suffer. (Thilmany, 2007, pp.105-110). The company is an open system company as it is using the environment for its resources and after processing them produces an output. We look at a company and how it must benefit from making better decisions that are socially acceptable and environment friendly. By this we mean the decisions like usage of non toxic products, funding, reduction of pollutants etc. Also the companies requirement to identify the needs of the customers and prioritize them over their profits whereby gaining benefits in the longer run. Here the socioeconomic applications are very important. There is also an involvement of science and policy and it is here that it becomes difficult to maintain the environment while still advancing with technology. Environment protection falls under the protection of the following disciples: Governmental organizations at all levels from local to international, international financial institutions, regulatory and law enforcing agencies, research academia, multinational organizations, environmental organizations and the users of environment (Bansal et al 2000). For the check of environment there is the environment impact analysis done. The analysis is done to first investigate the problem and then to offer answers to the problem of the situation. Another check for the environment is the auditing which is used to examine the resultant impacts on environment. Relationships with stakeholders Freeman ( 1984 ) introduced the theory of stake holder which defines and recommends models by which the management can efficiently cater to their needs. It checks the morals and values of an organization for the betterment of the company. The employees and customers of the company are the stake holders. The employees are directly affected by the dealing of management. If for example the company incorporates ethics in its agenda then the employees are affected positively. The company increases its productivity by looking after the issues of their employees like health or other legal matters. The Company makes it their responsibility to cater to the requirements of its customers. They should feel that the company is working for them. Only if the customers feel that the company is providing services to them more than being concerned about their profits will the organization have a better turnout of customers. Bansal, P.; R. Roth, (2000), pp 717-736). EXECUTION Here the predefined specific plans are executed. The company does extensive literature review and is aware of what is happening globally to put forth their action. Here it works along the categories of human capital, shareholders, society, customers, suppliers and environment. For this the company forms a CSR committee that is responsible for the execution of these CSR plans. Then the instructions are passed to the employees for the implementation of the plan. Like say the company saw a need for the company to become more friendly towards the customer they will establish the target of achieving the target of becoming the most friendly company and for this they will plan a course of action which would include smiling employees who makes the customer feel at ease , the company with a few alterations would strive to make the place of work more comfortable and open and for the execution they would ask their employees to follow a certain guideline of ethics and behavior to achieve the set goals. Organizational purpose is also termed as the marketing concept, and it the concept by which the company changes its stance from product orientated to customer orientated. Thereby meaning that the sole reason of the company to strive is for the customer satisfaction and that all its purpose and planning should be in accordance to customer likeness. The more the organization will strive for customer’s satisfaction the more trust they will earn and consequently benefit from it in the longer run. This includes going to the extent of providing unconditional guarantees. Be it that the organization first studies for the customer’s needs and then develops a product or delivers a product and then works to attract the customer spells one thing in common and that is to maintain the customer’s needs and interest. Customer service strategy Determination of the customers need by the organization is customer service strategy. The company must therefore work hard to deliver what the customers require and are satisfied with. The strategy includes of a well planned service strategy, people who are friendly in nature in dealing with customers, and also the organization must have customer driven systems. The service strategy itself is composed of beliefs, values, agendas, the reason for its existence and also the information gathered about the customers need. In the same manner to achieve better recognition and popularity with customers the organizations hire such people at the customer end who have friendly cheerful natures to attract more customers to their businesses. Then they have customer friendly systems which add value to the company, these systems should be efficient and easy for the customers satisfaction. For example any complaints or requests by the customers should be promptly and efficiently handled by the organization. EVALUATION The last stage in the methodological framework is the evaluation of the CSR. This is a measure of the achievements, and objectives and an insight in the policies that the company has taken up. Here the performance measures are looked upon by the consultation of financial statements. CSR Reports CSR reports are used by an organization to perceive their performance of a year. It helps the companies to implement improved standards and more innovations. The company gains knowledge as to the weaker aspects that they met in the previous year their plus points, they can identify and work upon the problem areas more efficiently and analyze and make strategies to improve.( Fields, S. (2002). "Sustainable Business Makes Dollars and Cents".) Corporate Responsibility Index Today we also have a corporate responsibility index that helps in the enhancement of the corporate responsibility framework by making the companies compete with their competitors. It is used to identify weaknesses and areas of improvement. The index helps assess the strategies for better planning. The index provides information to stakeholders as to which company is doing better at public awareness thereby making business transparent. The purpose is twofold, one is to improve corporate performance and the other is the understanding of sustainable development, corporate performance and the tools that drive it. Corporate performance is enhanced through positive and responsible business measures. Sustainable development occurs when corporate responsibility becomes the main concern of the company. The outcome of what the organization produces is termed as the organizations effectiveness. As it is difficult to measure organizations effectiveness hence any organization uses proxy measures which entail the size of population it serves, number of people served, and the demands that the organization fulfilled. For organization effectiveness the main principle lies in the involvement of ethics and integrity. As it curtails funding hence those involved must see to it that the goals are met ethically and with competence. The purpose of the funding should be assessed in detail and it should be made sure that all the procedures are carried out with integrity and with ethics. Balanced Scorecard Method Another way that the companies manage their companies is by the help of Balanced Scorecard Method. With the help of the balanced scorecard approach the companies’ mange both the economic and social issues. It helps in the analysis and better incorporation of the identified company’s initiatives. To form business activities in straight lines with strategy and vision of the organization the balanced scorecard is an important in planning and management system that by itself is put to test by the government, on profit organizations, business and industry all over the world. This then improves external and internal communications, and helps follow up organizational performance against strategic goals. David Norton and Robert Kaplan (Harvard Business School)( Chemical Bank : Implementing the balanced scorecard 1995) were the pioneers to put forth the concept of a more efficient view of organizational performance by calling it a performance measurement framework which incorporated strategic non--financial performance measures to traditional financial metrics thereby providing managers and executives a more 'efficient 'byproduct in the form of organizational performance. Although the name originated in the 1990 yet its history is far older and this kind of approach includes the early work of General Electric who reported in the 1950’s on performance measurement with the runner ups the French process engineers (who created the Tableau de Bord – literally, a "dashboard" of performance measures) as early as the beginning of 20th century (Schroeck, 2002). Over the years the balanced scorecard has seen many changes from a simple performance measurement framework to a full strategic planning and management system. The current the “new” balanced scorecard has the ability to command orders on daily basis altering a company’s strategic plans which previously were attractive but passive. It gets everybody going from executives to planners by providing performance measurements that enable them to choose what is to be done, when with all the help required (Desjardins et al, 2000). Identifying gaps and holes in the management approaches it was Kaplan R S and Norton D P (1996 ) who introduced the new balanced scorecard approach through their articles and books. It details the methodology that companies must acquire in order to balance the financial outlook. The balanced scorecard acts both as the management and measure for organizations helping them with planning and strategies and consequently then on into action. It is further a determinant of both internal and external checks for continued improvements. At its optimum level the balanced scorecard acts as the nerve when fully deployed, the balanced scorecard acts as the brain of an organization. Conclusion The company gained by incurring charitable contributions from stakeholders and investors by advertising their social and environmentally healthy campaigns. They chose the path of no profit in return for the deliverance of their goods. In this manner they were able to attract more customers to their product and eventually gained respect and trust and even in the areas which were of a concern to the environment, the stakeholders were prepared to overlook them in favor for all the beneficial work done by the company by being socially responsible. References Bansal, and P.; R. Roth (2000). "Why Companies Go Green: A model of Ecological Responsiveness". The Academy of Management Journal, Vol.43, No.4, pp.717-736. Bulkeley, H. (2001). "Governing Climate Change: The Politics and Risk Society". Transactions of the Institute of British Geographers, New Series, Vol.26, No.4, pp.430-447 Brand Strategy (2007). "10 key things to know about CSR". London. pg.47. Kaplan R S and Norton D P (1996) "Using the balanced scorecard as a strategic management Harvard Business Review Jan – Feb pp75-85 Freeman, R.E Strategic management: A stakeholder approach, Pitman Publishing Inc, Boston, MA. Thilmany, J. 2007. "Supporting Ethical Employees." HR Magazine, Vol. 52, No.2, September 2007, pp.105-110. Tullberg, S.; J. Tullberg (1996). "On Human Altruism: The Discrepancy between Normative and Factual Conclusions". Oikos, Vol.75, No.2, pp.327-329. Edward P. Lazear, 2001. "Educational Production," The Quarterly Journal of Economics, MIT Press, vol. 116(3), pages 777-803, August. Fields, S. (2002), Vol.110, No.3, pp.A142-A145 "Sustainable Business Makes Dollars and Cents". Environmental Health Perspectives. Read More