Cultural Influences and Impact on CSR - Dissertation Example

?TOYOTA INTERVIEW An understanding of best practices defining the current approach to CSR What best practices in the approach to CSR have been employed by your firm in the host country you operate in? How have they been employed? INT 1: We adopted intermediate targets that can be quantified. Toyota processes call for precision as well as accuracy, and this can be seen also in the CSR program. A unit of measure is decided on, whether in number of persons benefitted, or the level of net profit or sales a micro enterprise makes, and so forth. Then an ideal number, one that is not so high to be unattainable, but not too low as to be unchallenging, is identified to be targeted. If it appears the target is not to be attained, then the procedure is reviewed and revised midway to avoid further waste of resources. Results are important at Toyota. INT 2: Oh, yes so you’ve read that article about “Americanness”? Well, I would not put it exactly that way, that’s too black and white. But in more general terms, yes, Toyota wants to be perceived as a global company, a company that is a citizen of the world, so to speak. Whenever academicians talk of Japanese corporate culture, however, they typically cite Toyota. True, we embody a lot of the management philosophies that are associated with “Japanese” management, like just-in-time, etc., but I would prefer to think that we have a culture of constant quality improvement depending on the purpose of the business, not merely because the company is originally Japanese. (2) A survey and selection of social issues, among many, that the company may effectively address Which issues are relevant to your host country? Of those that are relevant, kindly describe the context or particulars in which they are considered relevant. What other issues other than those mentioned would you think are relevant? Has your company chosen to address these issues through the CSR program? If not, why? If yes, why have these issues been chosen and others have not? INT 1: Toyota is undergoing a bit [actually a lot] of controversy because of the millions of cars it has had to recall in the past years. So there is the issue of consumer safety right there. The company used to be known for precise safety engineering and not sacrificing on quality or safety for the sake of profit, but the way it appears now we are giving the impression that we are remiss. It is management’s task to bring the point home strongly that we are not neglectful, our mass production system and uniformity of component design across several vehicles just worked against us publicity wise. INT 2: I see my colleague talked to you about the recalls. Other than this, however, is the issue of Toyota being supposedly against more aggressive greenhouse emission reductions. There was some publicity about the company supposedly lobbying to extend the deadline for compliance. I would say that this is not true to the best of my knowledge. Toyota is always at the forefront of green technology, and of transparency in corporate governance as well. The company should have done better, however, in terms of publicity damage control. I think the public liaison had delayed in its response. It should not have reached the point where our company president should have been summoned [at the Congressional hearing]. If the publicity had been addressed sooner, he should have been spared having to explain personally. While there is nothing wrong in a company president speaking for his company, the face-off between the American government on one hand, and a Japanese leader on the other hand, could rub the wrong way for people who remember the war and Japan’s emperor being made to sign the articles of surrender – you know. (3) Mapping out a course of action and devising a program plan to address the selected issues Given the issues your company has selected, what program plans were arrived at to address them? How are these programs planned out? INT 1: I think you will find more of this in the company annual report. The programs are given there. I would say that the strategic management group is the one who takes care of the planning, rather than the operations group. INT 2: Toyota has a lot of CSR programs. You could look up the different programs and thrusts, just talking about a few of them would not do them justice. Look up the TSSC, which the company is particularly proud of because it combines our expertise with community work. (4) Implementing the plan How is the plan implemented? What are the resources involved in its implementation? What problems are involved in the course of implementation that pertain to the target population’s cultural traits and attitudes? INT 1 I would imagine there would be a lot of brainstorming at one point, but the decision to implement a particular program always comes from higher up, because everything must be coordinated with the company’s goals, and a budget set aside for it. You can’t have different people coming up with just any pet projects. A central, overall goal could be planned out for particulars that are appropriate to the country the subsidiary is in, but all should be coordinated because it is so easy to implement a project and spend company resources but not have good targets or a way to make sure progress is being made. Feedback is very important, because there is no easy way of gauging if a particular program is effective. INT 2 Well, there are two ways of looking at that question. Are you talking about CSR in terms of “public relations” projects that are implemented by the company and the community, or the broader aspect of CSR that includes employees, customers, shareholders, suppliers, etc? They’re a part of CSR too, the company’s responsibility to society. I would say that even in the everyday workings of the company, its policies towards its stakeholders play a huge part in its corporate social responsibilities. Providing a healthy working environment, choosing its suppliers to support sustainability, and providing its customers a higher level of quality, in such a way as to preserve the environment better, all of these are implementation of CSR. (5) Evaluating the efforts exerted in carrying out the program. How effectively has the company achieved its CSR program objectives? What are the factors that contribute to the plan’s success or its failure? INT 1: To date, I would say that there is reasonable success. For community programs most especially, you could tell if a plan is successful if there is an improvement in the way of life of the people who live there. For instance, Toyota has helped some small community enterprises take off and has afforded training to a good number of people. Those enterprises are now productive businesses earning money for the community, and the people who were trained are the new technical background of their work force. Like the saying that says, teach a man to fish and he will eat during his whole lifetime. It is the same. INT2: I cannot give an exact number or score, like 50% or 75% or 100%, but I would say that Toyota is doing its share. I’m sure the published reports could give you the details on how many people were helped or what communities were helped, but all I can say is that CSR is cumulative. The CSR programs are always in a state of flux, always evolving, because society itself is evolving. Big business must change and adapt with its changing physical, social and technological environment. The scholars that Toyota had put through training, for instance, will bear fruit until far into the future. Even just the company employees whose lives have improved, or the environment which has been preserved because of Toyota’s green engineering designs, should be benefited well into the next generations because of the company’s efforts to perform its responsibility to society. DE BEERS INTERVIEW (1) An understanding of best practices defining the current approach to CSR What best practices in the approach to CSR have been employed by your firm in the host country you operate in? How have they been employed? De Beers’ CSR practices seek to ensure that the resources devoted to its programs go far in attaining the goals it has set for itself. This necessitated adopting goals that were measurable, to be more objective in the assessment of the effectiveness of the CSR program. In goal setting, the company looks to the immediate community for direction. Some of De Beers’ most productive mines are in Botswana and South Africa, where the AIDS and HIV epidemic runs rampant. One of the most important goals of De Beers is to help in the eradication of this epidemic, and it has done this by providing for testing services and information dissemination on AIDS and HIV, specially to communities where it workers come from. (2) A survey and selection of social issues, among many, that the company may effectively address Which issues are relevant to your host country? Of those that are relevant, kindly describe the context or particulars in which they are considered relevant. What other issues other than those mentioned would you think are relevant? Has your company chosen to address these issues through the CSR program? If not, why? If yes, why have these issues been chosen and others have not? It has long been an important issue that De Beers was at the helm of the international diamond cartel. In truth, this was the way the company did business, artificially manipulating the price of diamonds by controlling its supply, and it reaped massive profits for the company. However, times change, and had the company continued in this path then it would not be long before it would lose its relevance and social significance. It is therefore to the company’s advantage that it finds consistently new ways in which it may contribute to the benefit of the stakeholders it serves as well as the shareholders whose interests it protects. In relation to this monopoly, the company was beset by negative publicity when the movie Blood Diamond came out in the middle of the last decade. Not that the movie began the controversy, but it did exacerbate it. After all, it does seem unjust that the continent which produces the most valuable precious stone in the world is also the poorest continent in the world. (3) Mapping out a course of action and devising a program plan to address the selected issues Given the issues your company has selected, what program plans were arrived at to address them? How are these programs planned out? De Beers’ principal gem in its CSR program is the Kimberley Process, in large part an offshoot of the negative image the company got because of the issue of conflict diamonds. The firm guarantees, through the Kimberley Process, that all diamonds produced or sold by De Beers have undergone a strict quality assurance process that is completely sustainable and completely conflict-free. The company also has targeted other issues that are of concern to its surrounding communities. It has sought to address corruption, which is part of the assurances of the Kimberley Process (that the diamonds produced were not attended by corrupt practices), environmental sustainability, and human rights. (4) Implementing the plan How is the plan implemented? What are the resources involved in its implementation? What problems are involved in the course of implementation that pertain to the target population’s cultural traits and attitudes? These are contained in the company’s disclosures and sustainability reports. Kindly refer to them for more detailed information. (5) Evaluating the efforts exerted in carrying out the program. How effectively has the company achieved its CSR program objectives? What are the factors that contribute to the plan’s success or its failure? The level of effectiveness is very difficult to say precisely, but it is to the company’s credit that the communities in which it is actively pursuing its programs have gained a reasonable measure of self-sufficiency. The AIDS question is still problematic, but I would like to believe that the information campaign is taking a foothold and making more communities aware of the methods for preventing the disease. Also, corruption remains a big problem because it is a deep-seated social ill; at this point all the company could do is ensure that it does not participate to worsen the problem. PFIZER INTERVIEW (1) An understanding of best practices defining the current approach to CSR What best practices in the approach to CSR have been employed by your firm in the host country you operate in? How have they been employed? It is always not possible, but CSR objectives are expressed in numerical terms in order to aid in measuring success. However, when it is not possible, the desired results are described in as much detail as possible. Cost to benefits studies are conducted, and for this purpose the benefits as well as costs, even the intangible ones, are quantified as much as possible by careful estimation, and considered in the equation. The cost to benefits assessment not only took the form of actual financial costs undertaken by the company, but also intangible costs in terms of voluntary manpower effort and the costs to the community, etc. Those with the highest net benefits are considered for implementation, depending on issues identified. Pfizer takes a global perspective and offers medicines to developing countries at lower prices, which should not be resold to developed countries. We have joint projects with the local generic pharmaceuticals with whom we collaborate in manufacturing those medicines we developed but whose patents have expired. (2) A survey and selection of social issues, among many, that the company may effectively address Which issues are relevant to your host country? Of those that are relevant, kindly describe the context or particulars in which they are considered relevant. What other issues other than those mentioned would you think are relevant? Has your company chosen to address these issues through the CSR program? If not, why? If yes, why have these issues been chosen and others have not? For the global pharmaceutical industry in particular, whether the host country is developed or undeveloped, there is always the perception that we are charging unconscionable profits, specially when they compare the prices of generics to us. They do not see the great risk the company takes developing the drugs. But criticism keeps us on our toes. To redeem itself, Pfizer addresses the overpricing issue through CSR programs, making prices of medicines lower for poor countries. This is to try to dispel misconceptions of profiteering. However, we are also criticized by some in the rich countries who see our cheaper prices in poor countries as proof of overcharging. We try to explain that these special prices are for humanitarian reasons, and that our costs of R&D are really more expensive because of years and years of development. (3) Mapping out a course of action and devising a program plan to address the selected issues Given the issues your company has selected, what program plans were arrived at to address them? How are these programs planned out? Pfizer tries to eradicate from public opinion the idea that the company is lobbying for the extension of patent rights, from the present 20 years to a longer period of time in order to enjoy extraordinary profits. In truth, this company condemns corrupt practices and is agreeable to keep its corporate governance transparent at all times. (4) Implementing the plan How is the plan implemented? What are the resources involved in its implementation? What problems are involved in the course of implementation that pertain to the target population’s cultural traits and attitudes? We have a global access strategy, we extend our research to biotechnology firms in the developing countries and emerging economies, in order to create some technology transfer from us to them. (5) Evaluating the efforts exerted in carrying out the program. How effectively has the company achieved its CSR program objectives? What are the factors that contribute to the plan’s success or its failure? I am not exactly sure how far we have come in the total CSR initiative, but we are trying very hard to realize our objectives, not only of projecting a more humanitarian company and pharmaceutical industry, but in truly bringing the benefits of cheaper and quality medicines to the world. Unfortunately, a great amount of investment is involved in the long-term development of medicines, so that must always be taken into account when deciding between offering medicines at a high price to recover the high costs of development, and offering medicines at low prices for humanitarian reasons. Read More