The importance of corporate social responsibility (CSR) is highlighted in reports provided by firms to their stakeholders. This emphasis is motivated by the trend of decay in the ethical foundations of organizations. The alarming notion is that the leaders of these institutions have been deemed as the initiator of the unethical behaviors. Zipkin (2000) stated that the experience of ethical scandals has lead to the distrust of the public on the huge corporations in different industries. For most companies, ethics serve as the character and custom of operations. These customs are standardized to achieve formality and credibility among the entities involved.
Business ethics is often referred to as the justification of right or wrong from the business perspective. The concept of business ethics is further divided into normative and descriptive. Normative ethics involve the proposition of methods that address good practices within firms. Descriptive ethics, however, is concerned with the different practices and beliefs within the workplace and the business as a whole (DeGeorge, 2002). Both elements are critical in guiding firms to perform CSR initiatives. Moreover, these aspects serve as bases for companies to undergo such developments.
Given these realities, Beak & Johnson is challenged to contribute to this global CSR crusade. The Company is an integral component in the goals of the manufacturing industry. At present, Beak & Johnson is in the planning stage of CSR initiation. This will provide an opportunity for the Company to review its core activities related to CSR. In addition, Beak & Johnson has to provide long-term plans for the firm’s CSR initiatives. The discussions in the proceeding sections will guide the company towards building a sustainable CSR program.
Corporate Social Responsibility
According to Sims (2003), corporate social responsibility (CSR) highlights the duty of the organizations to their stakeholders. Instead of focusing on corporate activities, firms have decided to undertake endeavors with perceived social relevance. The views on the existence of firms have become diverse because of the improving consideration of social welfare. Although still inclined with profit maximization, several companies have started allocating funds for activities that go beyond the corporate purpose. Some firms use CRS as strategy in building a strong market reputation and will eventually command high rate of market share.
Another important interpretation of CSR was provided by Mosley, et al. (1996) stating that organizations have the obligation to formulate policies and make crucial decisions that are beyond the scope of law. These policies and decisions, however, are deemed as promoters of values and objectives of the society. In short, CSR underlines the responsibility of the organizations to their stakeholders and their accountability to the actions taken within societies. The organizations have to use their respective resources to ensure that the goals of CSR are attained. Also, firms have to persuade the stakeholders to actively participate in such activities.
Indeed, there are several aspects that are attributed to the prominence of CSR. Usually, CSR is derived from the focus provided by firms in contributing to the overall welfare of the society. This is usually done by channeling to individuals the benefits enjoyed by firms. Furthermore, CSR also details the necessity for organizations to develop and maintain relationships with stakeholders. Aside from good corporate governance, this is observed through quality performance (Van de Ven, 2006).
Benefits of CSR
The impact of CSR in an organization varies from minimal to significant. The extent of CSR initiatives implemented by companies is considered as the main determinant to success. In addition, stakeholder response is also viewed as added element needed by firms. As Orlitzky, et al. (2008) found out, there is positive correlation between financial performance and socio-environmental performance. The study, however, revealed that short-run financial gains are realized at untraceable levels. Hence firms that consider CSR activities as high-impact investments need to focus on other elements of their initiatives.
An article from the Economist (2005) classified CSR as a tool in improving recruitment and retention of employees. There are several pieces of evidence that were provided to support this claim. At present, several applicants query on the CSR policies implemented by firms. Companies that have extensive CSR programs are mostly preferred by the individuals undergoing the recruitment process. CSR policies improve the perception built by employees of their companies. That reality makes employees proud to be part of CSR oriented firms. Employees also become loyal once firms extend their presence to the society through charity events and community volunteering.
One of the risks being avoided by firms is related to public perception. Reputation that is built in years can be ruined in a matter of minutes. When corporate scandals occur, firms need a shield to minimize the effects (Kytle and Ruggie, 2005). The negative reaction coming from various stakeholders is an event unwanted by most companies. CSR policies are important in providing a foundation for business ethics. Such initiatives create a culture that is built on trust and high morals.
In a competitive industry, firms try to create an image that will provide the needed differentiation. Although CSR is a social undertaking, the marketing effects of the concept are established. Companies maintain that CSR is a tool that can result in a unique branding. With that advantage, firms can focus on targeting markets that prefer their methods (Paluszek, 2005). There are market segments that value process more than product quality. That part of the market is considered the main target of firms. From a niche, a strong following can be established resulting in sustained growth. Firms are also ensured of loyal customer base that can increase through time.
One stakeholder that firms try to please is the government. It is often believed that the government has been involved in firms’ CSR initiatives. In Australia, for instance, the government is active in pushing for firms to be active socially. Laws are enacted and policies are implemented to ensure social responsibility among firms. The most important incentive that firms get from the government is tax rebates. The Australian government has been providing benefits for firms that implement extensive CSR initiatives. There are also other benefits in the form of permits and licenses.
Aside from the mentioned benefits, the most important incentive that CSR brings to the table is corporate efficiency. This general term can be specified by discussing business segments. CSR allows firms to change their processes and reduce costs. Simple reduction of fuel consumption is a major boost. Moreover, CSR can serve as a training vehicle for employees to become more competent. Aside from the technical skills, employees become adept in social dealings. Overall, the effect of CSR in firms is summed up by improved company performance. This achievement becomes clearer as CSR programs are sustained.
CSR and other Management Concepts
There are several empirical pieces of evidence that point to the extensive use of learning in organizations. In a study conducted by Tucker, Nembhard, and Edmonson (2006) the process of organizational learning is better approached by creating project teams. Normally, individuals become more receptive of the changes and become more cooperative in the learning process. Also, project teams have the capacity to get over barriers that resist change. In truth, CSR is also part of the entire organizational learning process. The mere evolution of CSR in organizations suggests that cultures learn from experiences and create changes to become better.
The idea of Soft System Methodology (SSM) has been introduced by Checkland (1981) to deal with situations that pertain to social, political, and human activity components. The thing that separates SSM from other methodologies is its inclination to problems that are non-technical in nature. Like SSM, CSR attempts to provide non-technical solutions to technical predicaments. Most CSR programs evolve of human activity and interaction with nature. The similarity between the two concepts is observed in the manner in which SSM and CRS address political and social issues.
Total quality management is defined as a management approach that suggests participation of all entities in the decision-making process. TQM emphasizes on satisfying consumers using competitive pricing schemes (Colman, 2001). Companies have to secure continuous growth within organizations and the development of the individuals involved in realizing the aims of the organizations. In maintaining CSR initiatives, firms have to emphasize quality. For instance, highlighting quality will reduce the use of electricity which is a modest act of CSR.
Nutt (1992) characterized the tendency of change to be planned or unplanned. Planned change is equated with control and schemes. Unplanned change, however, goes with the shift of variable that acts within and outside organizations. The aspect of change is perceived as temporary that response as situations necessitates immediate transformations. Organizational change is a strategy and implemented by the initiatives of the workforce. When CSR is implemented, both planned and unplanned change occurs. This is an aspect that firm stakeholders need to understand. Firms have to make adjustments to ensure that CSR goals are delivered effectively.
Business process reengineering is another concept associated with CSR. BPR seeks to inject essential upgrades to instantly turning the tables for the firm. The impact that BPR provides changes the entire perspective of organizations including their philosophy (Hammer and Champy, 1993). The focus of BPR is on the core components of the firm and underlines the imperative activities that provide immediate results. Although CSR is a process, it is important for companies to realize the benefits in the short run. From there, firms can make the necessary modifications to ensure better results and consistent returns.
Strategic planning is a concept that fits the processes being implemented in CSR. Mintzberg (1989) observed that strategy is linked to plans and the behavior patterns within organizations. The technical process of realizing strategic management is divided into two areas. The first phase regards planning as course for intended strategy and the patterned actions are the realized strategies. The second part involves the crafting of strategies to be implemented. The final part of the process includes implementation and revision of inefficient initiatives.
Beak &Johnson CSR Agenda
Beak & Johnson is engaged in the production and distribution of meat and other meat products. The Company is medium-sized comprised of approximately 364 workers. Beak & Johnson’s primary customers include Woolworths and other meat retail shops. Since Beak & Johnson produces products classified as perishable, the need to address CSR is a priority. Hence the Company has decided to make full-time programs to implement CSR initiatives in the Company. Beak & Johnson has ensured that 2008 will be the banner year when the Company becomes socially active. The Company is committed to sustaining this goal.
Before concrete programs are designed, it is imperative for Beak & Johnson to establish a department that will handle the task of promoting CSR. In the early stages, a team composed of representatives from different divisions is sufficient. The initial task of the team is to conduct a study that will determine the extent of CSR initiatives needed in the Company. The admin personnel assigned to the team has to draft the general guidelines in the program. The operations personnel will design specific actions that conform to CSR standards. The marketing personnel will relay the programs to the public and the finance representative will provide budget options.
There are specific plans that are designed to improved CSR initiatives in the Company. The first aspect that needs to be outlined is the use of utilities. Since Beak & Johnson products require washing, water is used sufficiently. Instead of throwing the water used, the process will reuse the resources. Water is only disposed of once the quality is determined unsuitable for washing. In addition, the use of electricity will be strictly monitored. Once the meats are frozen, the temperature of the freezer will be reduced.
The Company has to maintain the quality of machinery and equipment used for the processing. Well-conditioned equipment will lessen the need for electricity and other supplementary peripherals. Operations personnel are tasked to evaluate the condition of machines in a daily basis. Damages are reported and traces of incapacity will be recorded. A weekly report is provided by the supervisors to the manager of operations. This is done to ensure that issues on equipment and machinery are addressed. Moreover, accidents will be prevented and quality of products is ensured.
Another important aspect of operations where CSR can be implemented is the delivery process. Among the activities, this is the most challenging segment. Excessive delivery is inevitable in periods where demand for meat increases. Hence the Company is obligated to increase delivery in a single market outlet. The goal of Beak & Johnson is to limit delivery without reducing supply. Instead of individual orders, the Company will use a larger vehicle to make single deliveries in more than one store. In areas where roads are rough, Beak & Johnson can make use of air transportation. Although expensive, the long-run benefits can compensate for the cost.
Another company process where CSR will be implemented is the printing of receipts and orders. Beak & Johnson personnel have noticed that printing has become inefficient. The goal of the CSR strategy is to limit the provision of printed materials to suppliers and customers. The Company will use carbon paper to secure a second copy without using excess ink. In addition, Beak & Johnson will create a system that will keep soft copies of receipts and purchases. A storage device will be installed to ensure the safety and availability of the files. This will also reduce the need to compile the receipts causing space and storage problems.
The issue of physical waste is a major element that CSR will address. Trash bins will be provided in all areas. Each day, the garbage is collected and stored in a secure and tight area. The Company will then will be in close contact with city personnel in charge of garbage collection. Beak & Johnson is dedicated to improving the cleanliness of the workplace without damaging the environment. Moreover, the emission of gases and water will be minimized significantly. The Company will constantly monitor the toxicity of gas emitted by machines and vehicles. A secure drainage system will also be built to ensure proper disposal of water.
Packaging will be done in an efficient manner. The Company will make use of materials that are recyclable. Some meat producers tend to use materials that become useless when disposed of. Even the packing methods used by the Company will follow international standards. Moreover, Beak & Johnson has to use the product as instrument leading to public information. Adding words of encouragement related to environmental protection is a good start. The Company needs to get in touch with the public with these initiatives. More than a publicity stunt, the goal of such strategy is to improve the awareness of the Company’s customers in recycling.
Aside from the message in the packaging, Beak & Johnson plans to extend the SCR activities to the communities. In general, the activities on social awareness involve fundraising and other similar events. Contributing to communities affected by poverty will be a long-term goal. Beak & Johnson is dedicated in starting a CSR bandwagon in the industry. Although most of the firms concerned with CSR are multinationals, the Company will attempt to entice other firms. This strategy is important because Beak & Johnson is decided in becoming the market leader in all aspects.
Sustainable CSR Initiatives
In the previous discussions, the Company provided general strategies addressed at improving initiatives. This section will provide the specific steps that Beak & Johnson needs to implement to sustain the CSR goal. The team in charge of the CSR projects has to present their findings to the board. Upon approval, the details of the programs will be cascaded to other stakeholders. This process has to be established to ensure order in preparing for CSR initiatives. Aside from presentations, the team will provide monthly reports are to the progress of each project. This is important to track the development and include possible changes.
Beak & Johnson recognizes the need for certifications from established governing institutions. The Company needs to work towards acquiring ISO14000. This certification is concerned with the manner in which organizations minimize the damage caused to the environment by the operations. ISO 14000 in technical terms is an international specification for firms to maintain an environmental management system (EMS). The system is used to formulate policies that are used to address environmental issues.
Employee training is an important aspect that needs to be considered in implementing CSR policies. Training is necessary to ensure that delivery of products and services is within the CSR guidelines. This worker development program is an investment for Beak & Johnson. As stated by Amit and Schoemaker (1993), the internal resources of the company are responsible for the formation of distinct competitive advantage. Human resources are one of the internal resources that companies deliver uniqueness. The training provided to employees has to be in accordance with CSR and efficiency.
Establishing partnerships with suppliers is an initiative that can be added to the CSR program. In Australia, some retail companies directly contact farmers to maintain freshness and quality of products. This strategy can be used by Beak & Johnson to reduce the levels of supply chain. Direct contact with suppliers ensures sufficient product distribution. The partnership has to extend beyond buying and selling. The Company can provide inputs as to how the meat sources are raised. Beak & Johnson can use the partnerships to conduct studies to determine best breeds that produce high-quality meats.
In terms of recycling, there is one suggested program that the Company can implement. To promote recycling among households, Beak & Johnson will create a project that rewards such consumers. Most households throw meat packages after consumption. The Company will instead provide discounts to customers that return Beak & Johnson packages to stores. The discount will be based on the bulk of collection provided by consumers. This will allow recovering the used packages and creating an independent recycling program within the firm.
One of the major concerns about efficiency is the excess inventory. Some companies have problems in maintaining levels of stocks. Beak & Johnson needs to create an inventory system that will reduce excess stocks. This can be done by adapting the just-in-time inventory systems. Most producers process meats based on actual demand per day. But demand is uncertain and varies in seasons. Control of inventory will also reduce the use of electricity and water. In addition, the Company can cut other schemes that are normally used when massive productions are needed.
The Company has to plan for the use of alternative energy. There is an abundance of alternative power in Australia. Hence Beak & Johnson needs to provide a master plan for future use of alternative energy. At present, solar panels are highly expensive. Moreover, wind energy is inadequate to supply the entire electricity necessities of the Company. But the Australian government provided rebates for firms that use solar power. In addition, wind energy can be used sparingly until a system is created that fully uses the energy source. This is a primary commitment that CSR framers need to accomplish.
Advertising is a major tool that can be used to further expand the CSR initiatives of the company. Beak & Johnson, however, is more concerned with information dissemination instead of product endorsement. In the product labels, the Company will include the source of the meats and the description of the production process. In addition, the label will contain statements that motivate consumers to do their part in protecting the environment. This is the best way for Beak & Johnson to formalize the Company’s bid to go Green.
Beak & Johnson recognizes the need to have a system that monitors the efficiency of the production processes. In selecting equipment, for instance, the Company will determine criteria list to be used as basis for acquisition. The drainage system will be patterned after successful drainage schemes. The Company has to develop a process that will ensure continuous use of water without changing quality. Water processing is a suggested method since this scheme ensures that the same water will be used continuously. Wastes will also be managed in accordance with the laws provided by the governments.
The Company has to provide a reporting system that will adequately evaluate sustainability of CSR initiatives. For this part, Beak & Johnson will use the Global Reporting Initiative (GRI). Using GRI will guide the Company in the reporting of sustainability. The purpose of GRI is to make sustainability reporting by all companies a necessity and regulation. The GRI Guidelines are preferred in most organizations that seek to improve efforts on CSR. At present, approximately 1000 firms and institutions worldwide use the GRI Guidelines to produce their respective sustainability reports.
Issues and Challenges
Developing a standard and sustainable CSR program takes time and effort. In addition, there are some barriers that hinder the progress of such plans. Beak & Johnson needs to be prepared when these events occur. For example, the use of CSR concepts can affect the entire organization. But there are aspects of the company that has to be implemented without CSR. One common strategy used by the Company that at times contradicts to CSR values is pricing. At some point, Beak & Johnson has to decide between competitiveness and CSR. Pricing challenges the values of the Company related to CSR.
For some critics, the use of CSR is partnered with suspicion that firms are using the concept to gain more customers. There is no doubt that companies that provide CSR program s are preferred by some sectors of the market. CSR is often used to improve reputation and this defeats the purpose of the idea. There are observations made that CSR is being bannered to improve companies’ credibility to the public. The challenge for Beak & Johnson is to avoid making the firm’s CSR initiatives a selling point. Moreover, CSR has to be projected as a socially guided activity instead of a marketing stunt.
In any project, cost will be an issue. The program s suggested in the previous discussions require financial backing. For these projects to succeed, the Company has to stretch its pockets. To address this issue, Beak & Johnson needs to understand that CSR is an investment. Although the initial benefactors are the public, long-term benefits appear to favor the Company. Like any other investment, the returns will flow eventually. Beak & Johnson needs to provide ample financial support to ensure that the benefits will be realized. Perhaps this is the most challenging aspect when dealing with CSR.
Some companies have been using CSR initiatives sparingly. The other has reduced their efforts when specific goals were met. Beak & Johnson has to ensure that the CSR policies are backed with long term commitment. When the Company decided to roll out this initiative, the end goal needs to be reached. This will make the CSR initiatives more concrete and the effects will provide more returns. The long terms’ plans of Beak & Johnson related to CSR activities have to provide a significant merit in making business decisions.
Beak & Johnson has initiated a CSR program because such is needed in the industry. The current trend suggests that firms have become inclined to provide their share in society. These initiatives, although costly provide some useful benefits. The most important aspect that CSR brings to firms is efficiency. When CSR methods are implemented, Beak & Johnson has to find ways to minimize use of energy and ensure better products for customers. The social involvement is also important in establishing the presence of the Company. In addition, the Company conforms to the regulations provided by the government.
There are specific plans that Beak & Johnson designed to ensure that CSR will be part of the company process. A team will be set up to handle the issues concerned with CSR. Beak & Johnson aims to gain global accreditation by acquiring ISO 14000 and using GRI. On a technical note, the Company intends to develop reliable drainage systems, water processing units, and sound waste disposal schemes. The delivery and inventory mechanisms will also be aligned with the CSR initiatives. Moreover, concrete program s such as provision of discounts to recycling households and charity events will be pushed.
In performing these activities, Beak & Johnson expects that there will be barriers along the way. The issue of CSR being a marketing-oriented strategy needs to be avoided. In addition, firms that perform CSR initiatives are often hindered by financial incapacities. CSR is a long-term process and the benefits stated are realized through time. Most important, is a collective activity that will succeed when all stakeholders perform their roles.
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