A Footwear Manufacturing Company - New Balance - Research Paper Example

A Footwear Manufacturing Company - New Balance Introduction The fact that New Balance is a footwear manufacturing company is a direct resonance of the earliest dreams and ambitions of its founder, William J. riley who in 1906 started building arch supports to alleviate pain for people who spent several hours on their feet. Since then the company has changed through a number of stages and levels including its purchase by James Davis in 1972. Since then, sports shoes have been the focus of the company and this has been the secret to the company’s success over the years. With much focus on manufacturing in the United States alone for a good number of years, the attention and focus of the company became widened to include new market centers in a number of international countries, setting the pace for the New Balance to be a global company. A lot indeed changed about the company’s way of doing things especially as it became a global company. One of the areas that has seen major changes and continues to be unfinished in terms of expected changes is the area of corporate social responsibility. Today, the company is tasked with shifting line of corporate social responsibility from just doing what is right into an integrated business strategy and this is what the present case seeks to find means of getting done in a very resounding manner. Strength and Weaknesses Overall Governance Over the years, the history, values and integrity of New Balance has been the company’s major governance strength. This is because with an early mission to holding on to responsible management practices, the company has not turned its back on such practices to date (Tyssen, 2001). In the midst of this major strength of unshaken organizational culture for integrity and values, the company has failed to pay particular attention to issues of transparency and accountability and this poses a major weakness to the company’ overall governance. This missing link of transparency and accountability has resulted in a situation whereby the company has not been able to identify its business risk and opportunities (Mustapha, 2008). Invariably, the company has not taken advantages of opportunities that could make it larger and more popular than it is today. Products and Services Consistency is always a term that customers cherish because it keeps them in line with what is happening within the company and avoids the need to change their ways of dealing with the company (Mustapha, 2008). As far as products and services are concerned, this has thus been a major strength of the company, where it has been able to be consistent with its line of sport brand of production. More to this, the company is constantly seeking ways of being consistent with quality of the product that are offered to customers. As much as the company goes into quality product and service delivery however, the company has failed to have a life-cycle assessment system to measure the impact that the company’s manufacturing activities is having on the world around it. In other words, research and development on performance of products has been lacking in the company. This has actually not made it possible for the company to keep precision with customer specification. Operations As far as basic operations are concerned, the strength of New Balance has been a quest to take control of its operations in respect to its external dealings with third party entities such as suppliers. As there exists empirical evidence of how the involvement of several third party agents deny companies of taking control of their operations (Tobin and Pettingell, 2008), it would be said that this is a problem that New Balance has taken its self far away from. If for nothing at all, the company controls a larger share of its internal and external operations. The added advantage that this brings is that customers and all other stakeholders can be guaranteed to be dealing directly with the parent company and know where to turn to when problem arises with any aspect of the company’s operations. In her dealing with her international subsidiaries however, New Balance seem not to have learned a lot from the operations predicaments of companies like Maquila Solidarity Network when New Balance decided to close some of its international factories. This is because the same practice brought about several negative repercussions for the former (Vinyard, 2008). Presently, this move has raised doubts among stakeholders as to whether New Balance is not only good when it comes to local operations management and a flop in international operations. Community Support If asked of a single company that merited the accolade ‘people’s company’, it would certainly be New Balance because if the quantum of community based contributions that the company has made to the needy and the less privileged in society. Philanthropic responsibilities have been a birthmark of the company and have continued to exist. If for nothing at all; it has already been said that the company was established out of the need to supporting people who spent several hours standing on their feet. The added advantage that the company’s community support in the form of philanthropy and volunteering brings is that these are acts that are directly related to the quest for the company to undertake a paradigm shift in its corporate social responsibility as the community or society is the focus of a company’s corporate social responsibilities (Tyssen, 2001). At least, once the company begins to implement its strategies geared towards corporate social responsibility, the community will have the understanding that this is not a new way that the company is devising to take advantage of the people but that it is a practice that already exists. In the wake of all these, the company has failed to decentralized most of its policies and strategies that are geared towards supporting the community. An example of this is the New Balance Foundation giving, which has been criticized to be over centralized in the United States alone (Encyclopaedia of Labour Market, 2000). Analysis Having considered the strengths and weaknesses of New Balance carefully, two best areas that the company ought to focus on in the development of its corporate social responsibility strategy are the areas of environmental sustainability and community investing. First, environmental sustainability is selected as a component of the company’s corporate social responsibility because of the fact that the manufacturing activities of the company involve a lot of processes that directly affect the environment (Gardener, 2008). Already, the company has scored a lot of points in terms of how it has eliminated the use of certain known harmful chemicals from its footwear. But this action can be made an integral part of the corporate social responsibility strategy so as to ensure that it is not just one or two chemicals that are excluded but the entire production operations of the company including its supply systems, which involve the use of trains and other trucks are environmentally safe. The second area has to do with community investing and this is seen to be a corporate social responsibility that will be so glaring for any ordinary member of the community to recognize. In the first area, it may not be everyone who may appreciate the environmental concerns and how it related to social responsibility but for the company to go into direct investment in community projects that benefits the people in the community directly rather than benefiting the company, many will be those who would appreciate such gestures. An important factor that makes the selection of community investment key to New Balance is that the company has so far made philanthropy its major focus of community support when actually there are several other avenues that can be tapped. It is for this reason that it is hoped that once community investing is made a part of the corporate social responsibility strategy of the company, much need to strategize towards other means of supporting the community will be addressed. Implementing CSR 2 The following steps are recommended to New Balance in the company’s quest to implementing a corporate social responsibility strategy. First, it is important to identify the people to involve and in this direction, it is recommended that a social responsibility team be set up to start a social responsibility department within the company, whose membership should include the vice chairman of the company, the social responsibility manager, events organizer, events and promotions director, as well as customer relations executives. The communication plan of the team should be based on the roles assigned to each of these people with much attention on descending flow of communication. That is, decisions should be taken from the top; that is from the chairmanship and descended down to other team members. However, a democratic system of communication where the inputs of all members are considered in decision making will be an added benefit to communication. As far as resources are involved, there will be two major forms of resources needed namely tangible and intangible resources. Tangible resources would be the commonest and would include financial resources, raw materials and personnel. Intangible resources would on the other hand include time, skill and knowledge, and competence. It is expected that the implementation of the strategy will be seen as a process rather than an event. By this, reference is being made to the need of ensuring that a long time plan that becomes part of the overall strategic plan of the company is used for the corporate social responsibility. With this, the measure of success could be attributed to the overall success of the company in terms of its growth and development trend. Having said this, the most significant measure should be the response that is received from customers through the patronage of products and services offered by the company. Conclusion Generally, the case analysis has focused on the corporate social responsibility models available for New Balance with much emphasis on how the company can build on its strengths and improve its current weaknesses to come out with a well coordinated and harnessed corporate social responsibility strategy. It has been identified that even though there are several improved governance system, this has not been done haphazardly but in a well holistic function. For example it is known that responsible management has been made an integral part of corporate social responsible and as such, management has not turned its back on the need to giving back to society for what society offers to it. As far as the environment is concerned, there exists a whole system of quality assurance segment of the company that is tasked with ensuring that customers receive excellent customer service. Still on its strengths, the company has as part of its social responsibility eliminated the use of polyvinyl chloride (PVC) from its footwear as a way of ensuring a green footwear production. Based on the summary above, it can be concluded that New Balance is poised to take advnatge of its strengths and improve on its weaknesses to ensuring that it becomes the much desired market leader it has always yearned to be through the use of corporate social responsibility. Currently the business market is such that the assurance of gaining the hearts of customers to do business with a given company is not just about how cheap a company’s products are, or how quality the products are as almost each other competitor is targeting cheap quality production. What has now become the bow of contention is who has the most enticing competitive advantage and the use of corporate social responsibility has been labeled as one of the finest paradigm shifts in the marketing mix (Tobin and Pettingell, 2008). REFERENCE LIST Encyclopaedia of Labour Market. (2000). Labor Laws and Clarifications. Hoboken: Wiley, E-library Reference Gardener, J. (2008). Global Labour Relationships. The International Laws on Labor E-library Reference. Mustapha, A. (2008). Corporate Social Responsibilities. Washington: Writers League. Academic One File. Tobin, D. R. & Pettingell, M. S (2008). The AMA Guide to Management Development, Durban: American Management Association Tyssen, T. G (2001) The first-time sales manager. Management Books 2000 Vinyard, J (2008). Organization diagnosis, design, and transformation. New York: Wiley Read More