Introduction
In the modern-day business environment, organizations are not anticipated to only engage in profitable activities. Rather, they should channel part of their efforts to make sure that they are corporately socially responsible. Carroll (1998) informs, “The goal of CSR is to embrace responsibility for the company’s actions and encourage a positive impact through its activities on the environment, consumers, employees, communities, public, and other organizational stakeholders” (p.5). In line with this goal, companies such as PART LLC, a consumer outlet company, need to embrace concepts of corporate social responsibility (CSR). In an attempt to save the environment from pollution by poor disposal of outdated and unused medicines, as part of social corporate responsibility, it is necessary that the company create sensitization programs for the need to protect the environment from these pollutants. This paper begins with the problem statement and then proceeds to provide a logical explanation, with substantial detail of the problem or business need that the recommendation will seek to solve.
Consideration of a plausible analysis with substantial support of three different functional areas that might be contributing to the issue is then considered coupled with the provision of appropriate recommendation with substantial details of a solution that includes the three functional areas. The functional areas identified by the paper are leadership, human resource, and customers service. Moreover, the paper also dedicates itself to providing a suitable proposal of implementation resources for the recommended solution while not negating the provision of a timeline for the solution implementation. Lastly, a plausible analysis with the considerable support of the long-term financial and organizational impact of the recommendation is given some treatment. In this endeavor, the paper recognizes that every decision taken by the management of the company has an opportunity cost and a consequential impact on the performance and profitability of the organization. Consequently, the most viable recommendation is the one that delivers utmost good to the long-term financial position of PART LLC.
Problem: Background/context
PART LLC was established in 1939 as a public food and drug retailer company in the USA. Initially, the company specialized in selling primarily groceries and general merchandise with most of its stores having an in-store pharmacy. The company’s mission is to strive to achieve critical initiatives like customer service, market value, profitability, and associate satisfaction among others. The company immensely believes that ensuring that all the stakeholders of the company holding these organizational drivers would truncate to operational excellence. Hence, the company believes that it stands chances of being capacitated to meet or exceed the anticipated success in every area. For about three decades since the establishment of the company, it operated primarily as a grocery chain. Later, it introduced the drug or pharmacy department. Since the expansion of the line of business of the company, PART LLC registered sales of 852.3 million with a profit of 8.9million.
Five years down the line, it employed thousands of employees. Additionally, during the period of rapid growth coupled with incredible successes, the company expanded by merging, building, and or facing out the old conventional stores. It was at this time that the slogan “service first” was introduced along with “Helping Our Planet’s Ecology (HOPE) through reinforcing environmentally safe paper products. Nevertheless, the inception of HOPE did not target alternative and safe ways to dispose of off thousands of medications after they were sold. Consequently, a problem has arisen since these pharmaceuticals are ending up in the wrong hands and channels: in water systems. The main fear is that this problem may end up impairing the company’s performance by painting the wrong social corporate image of the company in the minds of organizational stakeholders. After dialoguing with Ann Parker, the operations director for the company, she determined that it was necessary and important to research, collaborate, and network with the public, other healthcare providers, and the state in a bid to provide advice on resolutions for this concern.
Issues/Symptoms
Prescription drugs are being dispensed daily to combat minor or life-threatening infections or different illnesses. Because of this, many people are stacking up piles of discontinued, unused, or expired medications including over-the-counter supplements, which cannot be returned to the pharmacies for proper disposal. As a result, patients are left with no other choices: they can only discard these pharmaceuticals in their household trash either by flushing them down in their toilets or by draining them down their sinks. Consequently, this pollutes the environment and water systems. When these items are left in the homes, chances of misuse or abuse increase. The company has, in its policies and procedures, guidelines not to take back dispensed or sold pharmaceuticals. This has led to a decline in prescription volume, decreased market share, lower margins, and earnings over time, as these patients feel that their concerns are not being addressed. Thus, they end up patronizing other businesses. This has been going on for a while: it is an emerging niche.
Upon realizing the environmental pollution problem caused by improper disposal of medicinal wastes, the company has considered to take various steps to combat the problem. Currently, by listening to requests made by customers besides taking into consideration that the company believes in being socially responsible, the company believes that implementing this initiative will provide significant benefits. Now, it becomes apparent that the company is cognizant that the strategic decision of being socially responsible may help in preventing further loss of clients who ardently feel that their requirements are not met. Hence, they consider to patron on other businesses. The broad problem is that the company has not embraced the concepts of social responsibility ardently, something that may result to further loss of its market share and hence its profitability if an immediate managerial decision is not taken to rectify the situation. In the following section, leadership, human resource, and customers service are proposed as the window of opportunity sought by the by PART LLC.
Functional Areas
Several functional areas may cause the problem experienced by PART LLC. However, in this section only, leadership, customer service, and human resource are considered as the key areas. Arguably, when these functional areas are given ample consideration by the company, they may help in raising the magnitude of customer’s perception about the organization’s commitment to embrace and pay attention to programs and initiatives that would take care of the needs of the company’s clients. Such programs are initiated by altering the phrase in the organization’s policy, which does not permit the consumers to return outdated or unused medication. This is an attempt to align the company’s policies consistently with the concerns of social corporate responsibility principles, which hold, “companies have a responsibility to act in the public interest, and will profit from doing so” (Marc, Schmidt & Rynes, 2003, p.407). In the context of PART LLC, although re-engineering these functional areas would cost the organization in the short run, the benefits accruing from the improvement of the company’s market share in the end would account for the increase in cost in the short run.
Leadership
In the solution of the problem facing the company, leadership amounts to one of the key functional areas, which the company needs to consider. Good leadership is critical in ensuring that organizations “get humming, as opposed to operating at high efficiency in order to meet both long-term and short term goals” (Fry, Keim & Meiners, 1982, p.97). Leaders are the visionary tools of an organization. These visionaries are the ones charged with the noble role of seeking alteration of policies that may place an organization at a narrow edge in the future. Therefore, as Matten, Crane, and Chapple (2003) lament, “a leader must be a visionary and get the team on board to become one with that vision, motivating everyone to put in their best efforts, even go beyond, then harvest that synergy and foster that inertia” (p.111).
This implies that, in relation to PART LLC, leadership is charged with the task of making proactive decisions on the requisite elements and strategies that need to be deployed to win back the reducing clientele of the organization due to inflexibility of the organization’s policies. To create flexibility of company policies to permit the customers to return their unused medications for disposal would require substantive commitment of the organization’s resources in both promotion and hiring of additional human resource. This means that the viability of such a decision is necessary and worth evaluating. Therefore, a substantial source of information is required. Essentially, as Bansal and Roth (2000) inform, it is the duty of the management to “seek reliable information and make decisions, often without hesitation that will have overall effect on the direction, speed and all other future decisions” (p.723). Since there will be a need for change of operational procedures internally within the company, leaders who can identify, recognize, and coordinate strategies that adapt to internal and external environmental changes will be necessary.
In large and sophisticated organizations such as PART LLC, a focused force of leadership by practice is essential to engineer and implement organizational change. In line with this argument, Maignan and Ferrell (2001) reckon, “a leader must be able to lead with agility, recover from mistakes from within the organization or their own mistakes; perseverance, strength of character, and boldness are therefore often key components” (p.462). These traits of leaders are critical especially when it comes to the implementation of corporate decisions that demand heavy commitment of organizational resources. Good leadership is also required when decisions that attract mixed reactions on their capacity to result to success of an organization such as corporate social responsibility are being made, implemented, and evaluated. This is because, such decisions require multidimensional evaluation approaches, something that good leaders need to be at a position of doing.
One of the recommendations to the clients is that the company needs to implement a CSR. This is vital in the attempt to create a positive image of the company. From the most fundamental perspective, corporate social responsibility (CSR) is the obligation for companies not only to act to serve their own interests but also the interests of the society. More interactively, CSR entails “economic, legal, ethical, and discretionary expectations that society has of organizations at a given point in time” (Carroll & Buchholtz, 2003, p.36). For the PART LLC, these expectations include the need to provide mechanisms that are going to enhance provisions and creation of an environment that is free from pollution resulting from undue disposal of medicinal wastes. Consequently, any measure taken to correct the mistake done by the company by failing to provide channels and mechanisms through which consumers can bring back unused or outdated medications to the company for effective and proper disposal must have the environment ingrained within the concepts of CSR. When leaders of PART LLC make this vital decision, success of the organization in the end is possible to achieve. Griffin and Mahon (1997) provide an insight why this is possible by claiming, “In cases where private profits and public interests are aligned, the idea of corporate social responsibility is irrelevant” (p.21). It has been already identified by the organization that by failing to integrate the concepts of CSR in its business operations, PART LLC is losing its market share to other companies. Therefore, it is advisable that the company’s leaders move swiftly and speedy to embrace CSR as a measure to restore its market share and hence continued profitability of the organization.
At the heart of CSR initiatives is the need to put into perspectives the natural environment in the organizational business strategies. The environment is one of the most valued stakeholders of the company. It is important in the sense that people work best in healthy environments. Additionally, organizations gain immensely when they treat with respect the environment in which they are established (Garriga & Mele, 2004, p.53). To PART LLC, this stakeholder is crucial since it is only through reduction of wastes arising from the company’s operations that an organization can give a hand in conservation and preservation of natural resources such as rivers. This way, PART LLC can contribute to the enhancement of a quality life for all its clients. To address this issue, the company needs to endeavor on depending on the medicinal wastes disposal approaches that are only carried out by its staff and in direct compliance with an established procedure of disposal of such wastes by the organization. Directly congruent with this argument, Bansal and Roth (2000) inform, “attempts to establish good mutual relationship with the environment through minimization of wastes products of the company’s process, and where possible recycling wastes, the company adheres to the CSR principle” (p.431). This can only be precisely achieved if the leadership arm of the organization directs the organization to have a responsibility in protecting the environment apart from generating revenues for other stakeholders: owners or rather the share holders, by developing enabling policies.
Human Resource
For PART LLC, the human resource functional area entails hiring and training employees who will handle the returned outdated or even unused medication. The human resource department would play proactive roles. It is therefore necessary to consider the functions that human resource may play in aiding the company to resolve its problem. Human resources entangle all the people that an organization has to facilitate the conversion of other factors of production such as land and capital into products that can in turn be sold to generate revenues. Despite the fact that, in some literature, the term human resource is used to mean human capital, the latter essentially “refers to the knowledge the individual embodies to contribute to an organization” (Elwood & James, 1996, p.7). Associated terms with human capital also include people, labor, work force, and even talent. Human resource management essentially functions to oversee proper organization of human capital in a manner that orients to organizational goals. For the case of PART LLC, the main goal is to recruit employees who through their work would help to change the image of the company into that which creates customer satisfaction.
Critics argue that Human resource approach looks at people as resources or rather assets with the repercussion that the human resource arm of an organization ends up commoditizing human capital. Hence, more often, people are abused (Bowles & Gintis 1975, p.74). From modern managerial perspectives, people are largely perceived as resources or commodities, as opposed to mere social beings, that can innovate and create services and products that enhance survival of enterprises (Torrington et al., 2002, p.56). An immediate action to initiate change that may lead to survival of an enterprise is necessary during times of conflict. Therefore, PART LLC has to consider reorganization and hiring new human resource to help the company in realization of its goals of wining back their customers who are running away.
HRM is established within any organization to ensure that people are recruited, trained on how to work within the contexts of market dynamics, and even maintain their work Morales (Torrington et al., 2002, p.89). In the endeavor to increase human capital work morale, mentoring programs are introduced by organizations under the human resource management department. For the case of PART LLC, such programs need to be customer-focused so that the existing employees coupled with the new staff that needs to be recruited to take upon extra duties associated with collection and disposal of unused or outdated medicinal wastes from customers can result to restoring or even raising the clientele of the organization. The centrality of human resource in aiding to realize the goals of the PART LLC, which are intertwined with the concepts of corporate social responsibility, makes more sense upon consideration of the main concerns of human resource.
According to Erica (2006), human resource is charged with recruitment of employees, their development and training, employee relations, labor relations, determination and location of incentives to employees, and competency mappings (p.30). Additionally, human resource executes other tasks such as performance management, employee’s engagement, and sets benefits and competence schemes within an organization. At PART LLC, human capital would gain more value from HR management approaches if HR ensures that the competence levels of the workers increase. Effective HR approaches incorporate various rewarding and incentive schemes for workers with the key objective of maintaining workers’ morale and motivation. For this purpose, it is recommended that PART LLC concentrate on ensuring that its work force is motivated. This may help in earning more clientele and in maintenance of existing clientele since research has found that workers motivation has a direct relationship with customers’ satisfaction (Redman & Wilkinson, 2009, p. 117). Here, customer satisfaction means the capacity of the customers to feel that their needs are catered for. In fact, people work for long-term periods in one company essentially if they are satisfied- if the job adds value to their life. It is the function of the HR approaches deployed in PART LLC to make sure that this is precisely achieved.
Human resource arm of an organization plays pivotal roles in creation of organizational value. This infers that the roles of the HR manager profile the immense needs of a rapidly changing organization with an aim of making the organization customer-centered. Consequently, PART LLC also needs to follow this emerging trend to make sure that it is in a continuous state of competition. This would make sure that consumers would have a difficult time in making decisions to seek services elsewhere since the service that they will be looking for is already provided by the organization to which they have developed loyalty.
Customer Services
The success of any business is dependent on the manner in which the organization in questions treats its customers. With regard to Turban (2002), “Customer service is a series of activities designed to enhance the level of customer satisfaction – that is, the feeling that a product or service has met the customer expectation” (p.57). While PART LLC is concerned about the manner in which her employees serve customers during and before purchases, a loophole is evident in the manner in which the organization is concerned about her customers after purchases especially with regard to medicinal products. Consequently, the success of interactions between consumers and the organization’s employees is dependent on “employees who can adjust themselves to the personality of the guest” (Micah, 2010, p.52). The main concern of PART LLC is to seek mechanisms of wining back the customers’ confidence with the aim of retaining its profitability. Deployment of cute strategies of handling customers’ can incredibly help the organization to achieve this noble role. The role that can be played by customers’ service towards this endeavor makes more impact upon consideration of Selden (1998) argument, “overall sales process engineering effort, customer service plays an important role in an organization’s ability to generate income and revenue” (p.61). Consequently, it is vital that customers’ service be incorporated in a systematic approach deployed by an organization to yield improvement. This is necessary since customer service in an organization facing problems similar to those faced by PART LLC may magnificently aid in the creation of a positive perception about the organization in the customer’s mind.
The challenge faced by PART LLC involving instances of customers supporting new businesses is akin to the failure of organizational policies to provide avenues ingrained within the concepts of customer service for making it possible for customers to return unused or outdated medications. Consequently, customers’ services provided are inadequate in making the customers to return due to the failure of the organization to meet their needs. Arguably, to revert this situation into strength that may help make the company successful in the future, it is vital that PART LLC considers the value that may be brought by the adoption of strategies to enhance customer support. According to Micah (2010), customers’ support entails “a range of customer services to assist customers in making cost effective and correct use of a product” (p.71). In the context of challenges encountered by PART LLC, the use of product does not only entangle right prescription but also strategies of proper disposal of defective, unused, or outdated medicinal products. Essentially, with regard to PART LLC’s situation, concerns of customers support exceeds the concerns raised by Micah (2010) to entangle “assistance in planning, installation, training, trouble shooting, maintenance, upgrading, and disposal of a product” (Dall & Bailine, 2004, p.109).
Solutions and recommendations
Leadership
PART LLC needs an environmentally conscious leadership. This means that, in the future recruitments, the organization needs to consider the degree of environmental consciousness possessed by people seeking considerations to fill leadership positions in the company. This recommendation is inspired by scholarly findings that hold, “in cases where executives with experience in environmental management are recruited, the extent of the capacity for a company to address negative impacts that its operations produces to the environment increases” (Matten, Crane & Chapple, 2003, p.110). Sensitivity to environment and the influence this environment has on the organizational stakeholders is one of the main areas of social corporate responsibility concerns. The overall leadership change is thus tied within concepts of CSR. The implication of this change is that only environmentally conscious leaders can engineer and implement strategic decisions that would make it possible for the needs of the consumers entailing the quest for proper disposal of medicinal products wastes a reality. While making this recommendation, it is appreciated that short-term solutions are required and leadership has the noble role to make the environment conducive for implementation of such solutions.
The main limitation of this recommendation is that, presently, the existing leaders cannot be terminated even if they could not be well acquitted with concepts of environmental conservation. To counter this limitation, it is recommended that financial resources are set aside to train the leaders on environmental conservation and protection. Financial resources required are also shown in the table below.
Table 1: financial resources required to implement leadership recommendations.
Human Resource
In the quest to attend to the needs of the customers, I recommend that PART LLC employ staff to attend to customers who would return unused medications and dispose these medications. To do this, the company has to utilize its human resource management department to conduct recruitment and training of the new workforce. However, this recommendation faces limitations in the sense that, it results in increasing the company’s operational costs. Thus, the problem of maintaining the profitability of the organization in the short run is an issue that would arise on proposal of this recommendation to the company. Following the earlier recommendation, that PART LLC needs to deploy social corporate responsibility concept in the attempt to save the environment from pollution and hence cater for the concerns raised by customers, the new personnel needs to be well acquitted with the roles that CSR can play to enhance the success of an organization. This requires that the people recruited to execute tasks of medicinal wastes collection and subsequent disposal to put the interests of the customers first in their line of work.
The limitation of this approach is that the workers of the organization would tend to focus on the needs of the customers, which have no direct returns to the company as opposed to indulging in activities that help to enhance the profitability of the organization and hence returns to the owners of the company. This is because this workforce is essentially recruited to enhance the capacity of the company to respond to the concerns raised by the consumers. Adequate possession of knowledge on customers’ service is also a prerequisite for the new personnel since the main goal is to restore the confidence of the customers. This is only possible if this new personnel understand the needs of the consumers. These recommendations require allocation of money to conduct recruitment and training and in payment of the new human resource salaries. Table 2 below summarizes financial requirements to implement the recommendations. However, the new employees’ salaries are left out, as this would constitute an additional company’s running expense. Thus, it is taken care of in computation of the company’s net profit as opposed to the cost of implementation of the recommendations.
Table 2: Financial resources for implementation of human resource recommendations.
Customer service
In relation to customer service, I propose three critical recommendations. Firstly, customers are the persons who enable PART LLC to generate revenues. However, to generate these revenues, it is vital that a company conducts an intensive research to determine what essentially the customers anticipate from the customer service arm of the organization. Based on the research of such studies, the company would put appropriate mechanisms of ensuring that the customers’ service arm of the organization executes its mandates consistently with the customers’ wants. The second recommendation is that more resources need to be channeled in public relations or communications. This will ensure that the company is able to garner more information on customer needs. This recommendation is plausible since “most customers’ needs are emotional rather than logical” (Branco & Rodrigues, 2006, p.114).
Through highly efficient public relations, such needs can are identified followed by adoption of appropriate strategies to make customer service to deliver these needs. Since a solution is vital in the short run, the third recommendation is that, the company needs to enhance public relations department to create awareness to customers about the organization’s policies showing how the systems of the organization operate. While this is done, it is necessary that the company creates awareness that it is doing all that it can to ensure that it instills mechanisms for allowing customers to return their outdated and unused medications. However, all these recommendations possess a limitation in the sense that they all require commitment of organization’s financial resources to implement them. This means that returns to the owners would be negatively impacted. However, the recommendations are justified since recommendations based on human resource would take long time to implement due to the time lines that are necessary to recruit and train new employees. Consequently, before other strategies are implemented to fulfill the needs of the customers, customer service needs to come first in the attempt to try to regain customers’ confidence. The table below summarizes the financial resources required to implement the recommendations
Table 3: financial resources required to implement customer service reconditions.
Timeline for the Solution Implementation
The above discussed solutions and recommendations demand to form part of organizational culture for them to be effective in resolving the problems faced by PART LLC. To introduce and instill an organizational culture, time is required. In the words of Detert, Schreoder and Mauriel (2000), “changing organizational culture is a very difficult goal to achieve, not only because culture is largely unrecognized, but also because once set, commonly shared interpretation, values and patterns are difficult to modify” (p.854). In case of PART LLC, it has been recommended that the company needs to change its culture from being profit focused to being customer focused. To do this, a change of leadership approaches including organizational policies is necessary (Goodman, Zammuto & Gifford, 2001, p.63). Although this may take a long time, it is anticipated that with full commitment of the leadership of the company, this can be achieved within a span of 2 years. On the other hand, recruitment of human resource would require potential employees to make applications for new job openings, conduct interviews followed by training before operational department that takes care of collection and subsequent disposal of medicinal products in a safe way is set up.
Amid these involving tasks, it is expected that within five months the company can manage to have gathered all the applications and then conduct interviews within two months. Since it is required that the new department to be fully operational within a period not exceeding eight months, the most effective way to conduct training is through on job training. This will ensure that customers’ needs will be taken care of as early as possible. For the case of customer service, what is required is immediate re-orientation of the employees to think of the customers needs’ for satisfaction with the organization’s products from before, after, and even during purchasing process, as opposed to during and before purchases. This makes customer service attendants responsive to needs of the consumers consistent with the proposed recommendations. Restructuring of customers service approaches is a continuous process, which can be affected upon approval of the recommendation given in here. The following tables show the times required to implement the recommendations made. However, for the case of customer service, the recommendations have no fixed periods since they entangle continuous activities that are necessary as long the company is in business.
Table 4: times required for implementation of leadership recommendations.
Table 5: time for implementation of human resource recommendations.
Analysis of the long-term financial and organizational impact of the recommendations
Long-term Organizational impacts
The recommendations made for the company rest on the idea that a socially responsible company stands immense chances of success. One of the ample solutions is to permit consumers to return unused medicinal products for proper disposal by the company. This strategy is implementable upon deleting the phrase in the company’s policies that does not permit returning of products once bought from the company’s outlets. One of the limitations such a recommendation is that before this is done, leaders of the company need to authenticate hiring of new human resource to take care of the task of wastes collection and their disposal since when these products are returned there needs to be people to take care collect and dispose them. However, Once this recommendation is implemented, the company will have achieved its first step towards becoming a socially corporate responsible. Thus, the long-term organizational impact is that the organizational culture would cease from being driven by need for profitability. Instead, the company would immensely concentrate in creating good relationships with stakeholders in an attempt to maintain its market share. This means that the organization would end up being customer-centric as opposed to being profit-centric.
Long-term financial impacts
In the short term, the company would encounter many costs associated with recruitment, selection, and training of employees to take up the tasks of collection and disposal of unused medicinal products. This would eat into the profits of the company hence reducing the returns to the shareholders. However, in the end, it is anticipated that, when the recommendations are implemented, the company would recover its market share. High probabilities exist that by rebranding itself, the company will attract new clients. Hence, the profitability of the company would start to rise. Additionally, some of the costs that would be encountered in the due process of implementation of the recommendations are short term in nature, and after the breakeven point, the total operational costs of the company would substantially decrease. This would result to increased financial performance of the organization. In this context, financial performance is measured based on profitability of an organization.
Socially responsible companies stand better chances of acquiring various benefits that may lead to bettering the financial performance of the organization in question. In the first place, adoption of CSR may enhance the reputation besides improving the brand image of a company (Aupperle et al, 1985, p.451: McGuire et al, 1988, p. 863: McWilliams & Siegel, 2000, p.605). This benefit helps in improvement of financial performance of an organization in the sense that consumers are normally drawn into businesses possessing good brand names. CSR can incredibly aid in precise achievement of this benefit. Secondly, “socially responsible company can also benefit from its reputation within the business community by having increased ability to attract capital and trading partners” (Waddock & Graves, 1997, p.309). Increased capital means increased resources to do business hence more production. Increased output implies that an organization increases the contribution of increased productivity to the profitability of the organization. This means that upon the implementation of the recommendations, the financial performance of the PART LLC would increase in the long-term.
Important to note, the recommendations proposed add into the cost of running the company. Such costs include cost of inceptives, marketing (advertising), and costs related to additional human resource required for collection, waste management, and disposal. All these costs serve to reduce the profitability of the organization in the short run. The bottom line is weighing the advantages associated with implementation of such programs in the end and the disadvantages of reduced profitability of the organization in the short run. However, in the end, the profitability of organization is anticipated to rise substantially.
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