Abstract
Corporate social responsibility is one of the strategies that a firm can use to strengthen its brand in the market. In this paper, the researcher was interested in investigating how companies around the world conduct their corporate social responsibility. The researcher selected Alibaba Group Holding Limited to help understand how some of the Chinese companies conduct their CSR activities.
The goal was to compare best international practices with what is done in China with the aim of identifying specific areas that local firms should embrace to improve the impact of such activities. The researcher collected data from secondary sources. They included recently published books, journal articles and websites of different companies. Other reliable online sources also proved valuable for the study. It was desirable to collect primary data from employees of Alibaba Group Holding Limited to help understand the current practices at the firm, but the limited time available made it impossible.
The findings of the investigation show that most of the Chinese companies have to change their approach towards corporate social responsibility. It is evident that some of these firms conduct this activity to create an image in the market or to meet specific regulations. The study shows that CSR can only be a success if there is the commitment of a firm to achieve a specific goal. Planting trees in a day and failing to maintain them is a futile project. The seedlings would dry up without watering and care, defeating the initial goal of improving the vegetative cover within a given part of the country. The study suggests that firms should select projects whose costs are within the firm’s financial capacity and remain committed to ensuring that they are a success.
Introduction
Alibaba Group Holding Limited is one of the leading retailers in China. Jack Ma and Peng Lei founded the company in 1999 and it has since achieved impressive growth in the local Chinese market (Epstein & Rejc 2014). They noted that there was a growing demand for online retailed products. Over the past decade, the number of online retailers has increased significantly because of the growth of the market size (Crowther & Seifi 2018).
Alibaba Group currently has to compete against major global brands in the local market. Alexander (2015) explains that the ability of a firm to attract and retain a pool of loyal customers does not just depend on offering the best products at the best price possible. Forming a non-commercial relationship with the local community is equally important. As such, many firms are currently investing a significant amount of their resources on corporate social responsibility (CSR).
Giving back to the community is one of the best ways through which a firm can demonstrate its commitment to the local community. It indicates that the company is not just focused on making profits but also addressing societal concerns. Di, Chymis and D’Anselmi (2014) explain that companies often select some of the main social or environmental issues, which are of main concern to members of the public.
Addressing such concerns relieves the society of the burden and improves the relationship between the firm and its potential customers. It helps strengthen the brand of a company in the market. In this paper, the researcher will look at how different companies around the world are engaging in corporate social responsibility and what the management of Alibaba Group can do to embrace best practices in this field. Through this study, it will be possible to understand the current efforts of Alibaba Group in giving back to the community, identify possible weaknesses and suggest ways in which they can be improved.
Research Questions
The study focused on investigating corporate social responsibility as conducted by various companies in different parts of the world. The scholar also wanted to determine what Chinese companies could do to ensure that their CSR can have a significant impact on the environment, society, or any other area that they target. It means that it is necessary for them to change their current approach and embrace new strategies. The following are the primary questions that the researcher had to answer when conducting this study.
- What were the reasons that led to organisational change and what was the purpose of change?
- Who were the involved stakeholders and what role did each of them play in the process of change?
- Using relevant theory and/or framework, what was the process of change that occurred in the organisation?
- How has the changing organisational context influenced the changes that have been undertaken?
- How would the researcher evaluate the outcome of change?
Research Objectives
When addressing the above question, the researcher was also interested in achieving specific goals. The researcher considered it necessary to set clear objectives that had to be realised through the study. It was necessary to achieve the following objectives:
- To discuss the role that leadership played in this organisational change.
- To analyse the challenges of changing organisational culture.
Literature Review
In the previous chapter, the researcher provided a detailed background of the issue under investigation. The chapter explained the importance of the topic and goals that should be achieved upon its completion. This chapter will focus on reviewing the literature on the topic. Corporate social responsibility is a topic that has attracted the attention of many scholars for the past several years (Farache et al. 2019). As such, it is crucial to investigate the finding made by other scholars and knowledge gaps that still need further investigation.
The review helps to eliminate cases of duplicating already existing information. In this paper, the researcher will look at how different companies in various parts of the world have been engaged in CSR programs. The chapter will also review theories in practice when engaging in CSR activities. It will help justify actions taken by these companies when trying to promote the welfare of the targeted community.
Corporate social responsibility has become an initiative that companies around the world can no longer ignore in their corporate initiatives. In the current competitive business environment, advertising alone cannot help a firm to strengthen its brand in the market. Baskaran (2016) explains that in many cases, viewers often consider adverts as unwelcome interruptions. As such, they would ignore such commercials.
Companies are now developing creative ways of promoting their brands and one of them is through corporate social responsibility. The initiative creates enables a firm to engage in a non-commercial activity meant to protect the environment or improve the social welfare of the targeted group (Bainbridge & Henderson 2016). Undertaking such programs often demonstrates the commitment of a firm to improving the social and economic system of a country.
Corporate Social Responsibility in Various Countries
The concept of corporate social responsibility has become a standard practice among corporations in different parts of the world. According to Bainbridge and Henderson (2018), in the past firms did not feel they have a commitment to undertake such humanitarian activities. However, the impact of corporate entities on people and the environment is becoming more evident and firms are finding it critical to help address the problem (Kurtz & Boone 2014).
Companies in the food industry have been blamed for failing to take measures that would protect their clients from hazardous preservatives of calories. Those in the manufacturing sector are responsible for massive soil, air and water pollution. Some of these pollutants are responsible for causing diseases such as cancer and respiratory problems (Izzo & Vanderwielen 2018). As these firms try to streamline their operations to reduce any negative impact that their operations may have on the environment, they have a role to play in society. Corporate social responsibility has become a core responsibility that has to be conducted with great efficiency.
International Business Machines Corporation, popularly known as IBM, is an American multinational corporation that has its headquarters in Armonk, New York (Little 2014). The company has earned a global reputation as one of the Fortune 500 firms making a massive investment in the education sector. According to a report by UNESCO, in the financial years of 2011 to 2013, the company was one of the largest donors to educational programs.
Within that period, the company donated over $ 144 million to support the education of students in the United States and other parts of the world. The company believes that empowering youths through education is one of the ways of fighting poverty in both developed and developing economies around the world (Lenssen & Smith 2019). The company has been working closely with UNESCO and various non-governmental institutions in the United States and developing countries to ensure that their donations reach them. Banco Santander of Spain and GlaxoSmithKline are the other major donors to educational programs.
British Petroleum is one of the largest petroleum companies in the world. According to Leal (2019), the company has been accused of engaging in activities that have a devastating impact on the environment. As a strategy to counter such narratives, the company has been actively involved in corporate social responsibilities. The company invests millions of dollars every financial year to support environmental initiatives. It has been working closely with the United Nations Environmental Program (UNEP), United Nations Human Settlement Program and various other governmental and non-governmental agencies to help protect the environment. Planting trees and protecting indigenous vegetative cover are some of the initiatives that the firm has been spending on as a way of reducing the amount of carbon dioxide in the air (Leal 2019).
Major companies in the oil and gas sector such as ExxonMobil and Shell have also been donating to environmental agencies to help address the problem of climate change. Litow (2018) notes that for a long time firms in the petroleum industry rejected the concept of global warming and climate change. However, the emerging environmental concerns such as melting polar ice and the increase in the occurrence of cyclones, prolonged drought in different parts of the world and flooding have forced them to face reality.
Toyota Motor Corporation is a Japanese car manufacturer that has its headquarters in Toyota, Aichi Prefecture (Haski-Leventhal 2018). Considered the world largest car manufacturer, the company has remained committed to various initiatives meant to improve the social welfare of its customers and members of the public. Its corporate social responsibility programs do not just focus on Japan but also other parts of the world. As shown in figure 1 below, the company has developed a CSR program that has three facets, based on the three pillars of sustainability. They include social, environmental and economic aspects.
The company has been supporting educational programs of children in the emerging economies of Africa and parts of Asia. It has funded numerous environmental programs in Japan, South America and parts of Africa. The firm believes that it can transform the world by promoting diversity in the workplace environment as a way of fighting racism and cultural intolerance in various parts of the world. Such initiatives have endeared the company to the global market. Boren (2016) argues that Toyota is one of the most common car brands in both developed and developing economies around the world.
Tata Motors is one of the largest automotive companies in India. The company often sets aside a given amount of money, which it spends on various corporate social responsibility projects. One of the main issues in the country that is a major concern is the protection of water towers to ensure that there is clean water for domestic, industrial, and agricultural use (Weber & Wasieleski 2018). Tata Motors has always remained committed to protecting the country’s water towers as a way of enhancing the availability of clean water in the country. It has funded various environmental groups such as UNEP to help plant trees as a way of increasing forest cover in the country.
These initiatives have helped in demonstrating the company’s commitment to environmental conservation (Weber & Wasieleski 2018). It is a demonstration that the firm is not just focused on making profits but also in the well-being of the environment and the community.
Defining the Choice of Corporate Social Responsibility in the Modern Society
When engaging in corporate social responsibility, Haski-Leventhal (2018) explains that it is important for the management to make an appropriate choice about the activity that should be sponsored. The activity of choice should always depend on the prevailing socio-economic and environmental issues. It is always advisable to select the most critical issue that is of great concern to the masses. During the recent earthquake in Japan that resulted in various other major disasters, many people lost their lives while others were left homeless (Leal 2019). Many local companies in Japan such as Toyota Motors focused on humanitarian projects to help the affected families resume their normal activities.
Izzo and Vanderwielen (2018) argue that engaging in such activities in times of crisis often have a significant impact on the affected group and the company’s brand. The donations that such a firm make help the affected people to have basic needs. The massive media coverage of such events means that the company’s generosity would be widely broadcasted. The local and international community would be reminded of the firm’s commitment to help people in times of need. Those who are directly assisted by the company would become loyal to the brand several years after the incident. They will remember that the firm helped them in time of need, and as such, they have a responsibility to support its growth, just in case such emergencies arise in future.
Companies are also focusing on areas directly related to their operations in the market. Most of the manufacturing companies are focusing their attention on environmental initiatives (Weber & Wasieleski 2018). According to Lenssen and Smith (2019), environmental groups have blamed the manufacturing sector as the leading generator or air, water, and land pollutants. Effluents from companies find their way into clean water, which affect the aquatic life.
The sector is also responsible for the massive emission of greenhouse gases. As a way of lowering their impact on the environment, these firms have come up with CSR initiatives to lower their impact on the environment. They have sponsored tree-planting programs to help clean the air and to make the environment sustainable (Bainbridge & Henderson 2018). Financial institutions on the other hand have sponsored educational programs to help have a society where people are financially empowered.
Theoretical Framework
When analysing the issue of corporate social responsibility, it is important to look at the theoretical frameworks to understand why firms are spending resources in such initiatives. Carroll’s 4-part pyramid of CSR is one of the common models that explain the true intentions of multinational corporations when engaging in such programs. It identifies for stages of responsibility based on their significance to the firm. At the bottom of the pyramid are the economic needs. A firm has a responsibility to its shareholders. Its existence depends on the ability to make profits consistently. Such initiatives are meant to maximise shareholders’ return. When these social needs are met, then the firm has to focus on the second stage of the pyramid, which involves abiding by the law. Its operations must be within the legal framework of the country in which it operates.
According to Weber and Wasieleski (2018), many countries now have laws regarding environmental pollution and employee relations. The management must understand that failure to follow such legal requirements may lead to litigation. It must ensure that it provides an enabling environment to the workforce, while at the same time ensuring that its activities do not lead to significant pollution of the environment. The third level of the pyramid is ethical concerns.
The company must remain committed to doing what is considered right and fair even if it not enshrined in the law. A manager may have the liberty of firing an employee for various reasons. However, such actions should be avoided as much as possible because of the impact on the affected individual. At the apex are the philanthropic acts where a firm makes a deliberate decision to be good to the people and the environment.
The concept of sustainability is one of the primary factors that make corporates to engage in CSR activities (Weber & Wasieleski 2018). The three pillars of sustainability explain three factors that a company cannot ignore if it seeks to remain sustainable in the market. The three can also be crucial when defining how a firm should define its CSR activities. Economic viability is the first factor of sustainability (Farache et al. 2019). It is normal for a firm to seek profitability in its operations. As such, when engaging in CSR activities, such initiatives should not compromise on its profitability. The chosen activities should be affordable based on the firm’s income.
The second pillar of sustainability is social equity. Boren (2016) explains that a firm can only prosper in the market if it respects the interest of its employees and customers. When engaging in CSR activities, people factor should not be ignored. Opinion of the employees should be incorporated when developing the policies. Farache et al. (2019) also recommend that customers and members of the public should feel the positive impact of such activities.
The third pillar of sustainability, as shown in figure 2 below, is the environment. Activities of a firm directly affect the environment in various ways. Continuous pollution of the environment without making an effort to address the problem may have a lasting negative impact. CSR activities are currently focused on improving the environment. Activities such as planting trees, elimination of plastic wastes, responsible management of industrial wastes have become popular environmental initiatives.
Research Methodology
When conducting academic research, it is important to define a clear method of collecting, analysing and interpreting data. As explained above, this study focuses on corporate social responsibility. The researcher intends to review how companies in different parts of the world conduct this activity and steps that firms in Chine can take to ensure that they undertake such responsibilities in the most effective ways possible. The intended population should feel the positive impact of such projects. It should also have the intended positive impact on the brand of the firm.
Methods Used To Gather Information
The first step that a researcher should take when conducting an academic project is to define the philosophy that is appropriate for the study. A research philosophy refers to a belief about the manner in which information about a given phenomenon should be collected, analysed and interpreted (Walliman 2016). It defines the principle assumptions that will be made in the study. As shown in the research onion below (figure 3), there are four different philosophies.
They include positivism, realism, interpretivism and pragmatism. When selecting an appropriate research philosophy, Pruzan (2016) suggests that, a researcher should take into consideration the research topic, research questions and objectives that should be realised when the project is completed. The philosophy should provide proper guidance on how the intended goals should be realised.
Positivism holds the view that information can only be considered factual and trustworthy if it is gained through observation (Prescott 2016). It requires a researcher to remain objective when collecting data and to avoid cases where personal bias or knowledge influences the outcome of the study. It emphasises the need to have research findings with are observable and quantifiable. It is a popular method when conducting a quantitative analysis.
The fact that the researcher was unable to visit the company and collect data through observation it was considered inappropriate for the project. Realism as a research philosophy holds that truth or reality is independent of the human mind. Stereotypical beliefs, limited knowledge and experience, or cultural practices may influence the ability of an individual to make a correct judgment. As such, the philosophy holds scientific method is the only way of determining the truth. Given that the researcher was not conducting scientific research, the philosophy was considered inappropriate.
Interpretivism holds the view that a researcher can access reality through social constructions (Card 2016). The philosophy requires one to engage with the subject of the study to have the capacity to understand why they behave in a given manner. In this case, it would be desirable for the researcher to visit the premises of the company selected (Alibaba Group Holding Limited), interact with the employees and get involved in its corporate social responsibilities. It would allow one to understand why the firm behaves in a given way and what can be done to introduce change. Unfortunately, the researcher did not have the capacity to visit the company because of various constraints discussed below. As such, the philosophy was considered inappropriate for the study.
Pragmatism is another common research philosophy among social scientists. It holds the view that a concept can only be acceptable if it supports action (Prescott 2016). The proponents of this philosophy holds that there are numerous ways of interpreting the world and that no specific approach should be considered superior to the rest (McNabb 2015). The socio-cultural, academic and political experiences and knowledge of a person may define how they interpret a given issue. The focus should be on whether the concept supports an action instead of the rightness of the method that was used. As such, it allows a researcher to use either qualitative or quantitative methods to arrive at specific conclusions. The researcher considered it the most effective philosophy to guide the study. Using this philosophy, the researcher collected information from secondary sources.
Data Analysis and Justification of the Methodology
The researcher used a case study as one of the methods of analysing data. The researcher focused on understanding how Alibaba Group Holding Limited conducts its corporate social responsibility in China. As such, information was gathered about steps that the company had taken when undertaking a specific CSR activity. The approach made it possible to describe the current CSR practices within the firm even though the researcher was unable to interview employees of the firm. This method of analysis was considered justifiable because it allowed the researcher to identify specific weaknesses at the firm. It was possible to identify areas that the management and individual employees needed to observe to ensure that CSR activities at the firm have the right impact on the society, the environment and the brand of the company.
Limitations of the Project
This study was affected by a few limitations, which are worth discussing in this section. After reviewing best practices in the world, the researcher was interested in reviewing practices in China to understand the possible weaknesses. Investigating the shortcomings of local practices would help in proposing what the local stakeholders to improve the overall outcome can do. However, the biggest limitation in this study was the inability to collect primary data from respondents.
It would have been appropriate to contact individuals in managerial positions at different companies in China and ask them how they conduct their corporate social responsibilities. Alibaba Group Holding Limited was the company selected for the study and it would have been desirable to contact some of its senior employees and engage them. However, the geographic distance made it impossible to collect data from a sample of participants. As such, the researcher had to rely on secondary data when conducting the research.
Information used in this project was collected from the company’s website, website of other firms around the world, books and journal articles. Lack of primary data makes it difficult to determine the current practices in the company and within the industry. The researcher made an effort to address this problem by using recently published documents. It was desirable to collect latest information to know how to offer guidance to this company on how it can improve its approach of undertaking corporate social responsibility. It was also challenging to find specific information needed from the company’s website.
Although it is evident that this firm often undertakes activities meant to give back to the society, the strategy that it uses and its main priorities are not clearly stated. Such issues made it challenging to define steps that the firm should take to change the practice.
Case Study
Alibaba Group Holding Limited is one of the leading online retailers in China. The organisation has remained committed to giving back to the community as a way of strengthening its brand and improving the social welfare of people within the country. According to Yang and Huang (2016), Alibaba engaged in its first corporate social responsibility in 2008 (Yang & Huang 2016). A massive earthquake had hit Wechuan, in Sichuan Province and left many people homeless. As the government and other agencies moved in to help the affected population, it became apparent that assistance from the private sector. The company moved in to help in relocating the victims and providing temporary shelter and other basic needs.
Since then, Alibaba has been engaged in various corporate social responsibilities in China as a way of promoting socio-economic growth. The management introduced a major change in its CSR activities in 2012 to help achieve the desired impact. It introduced the Platform CSR approach as its corporate social responsibility approach. It also introduced a CSR department with its own annual budget to help plan and coordinate these activities. The transformation has improved the efficiency at this firm and Mr. Daniel Gu, one of the senior managers at the CSR department, noted that the firm has registered impressive performance since it introduced the new strategy (Crowther & Seifi 2017).
Reasons That Led to Organisational Change and the Purpose of Change
When Alibaba started its corporate social responsibilities in 2008, it was responding to a specific emergency where people needed a humanitarian assistance because of the natural disaster (earthquake) that caused massive devastation. However, the firm realised that it could not stop such initiatives. It had to continue engaging in such activities on an annual basis to demonstrate its commitment to the local community. From 2008 to 2012, the firm engaged in various CSR activities based on pressing social concerns and desires of the management. It was not clear what the firm should primarily focus on in each financial year. However, the management realised that this strategy was ineffective.
The firm was spending a significant amount of financial resources, but the impact of their activities to the immediate community was negligible. For that reason, the management considered it appropriate to introduce a new system. The purpose of the Platform CSR approach was to have a clearly coordinated approach to corporate social responsibility where the firm would undertake long-term projects. The newly created CSR department had the responsibility of planning, executing, supervising and ensuring that the necessary follow-ups are conducted (Paganetto 2015). These activities had to demonstrate tangible impact on the targeted community or the environment.
Stakeholders Involved and Role Each of Them Play in the Process of Change
The current strategy that the firm has employed in its CSR activities has been a success because of the involvement of different stakeholders. Jack Ma, the chief executive officer of the Alibaba Group, has been the main supporter of the new initiative. As shown in the case study, he has authorised funding of various projects meant to help empower youths in China. The firm’s board of directors has also been supportive of the change. The board plays a critical role of approving funds meant to support CSR activities in China. They also approve every project that is proposed by the department. They have to be convinced of the benefit of the activities to the firm and to the targeted individuals or the environment.
The management unit at Alibaba Group Holding Limited’s CSR department plays a major role of identifying specific projects that the firm should embrace and developing a proposal that would be sent to the board of directors for approval. Once the approval is given and funds released, this department will be responsible for the implementation and review of the project. It is expected to develop regular reports of the progress of each CSR project and the impact on the targeted population or environment. Junior employees within the CSR department are responsible for implementing policies developed by the management. Sometimes they have to work with other external stakeholders, especially environmental agencies in China, when implementing some of these projects.
The Process of Change That Occurred in the Organisation
The change that occurred at Alibaba Group in terms of its corporate social responsibility took a process. At first, the firm was not engaging in corporate social responsibilities, as its focus was to achieve a consistent economic growth. Then in 2008, the devastating earthquake in Sichuan Province changed everything (Yang & Huang 2016). The firm realised that it could no longer continue to ignore social needs in the country. It had to join the government and other private sector players in helping the victims to recover and to learn normal lives. However, in these initial years this firm did not have a careful plan on how to execute its CSR activities.
The firm’s top management unit was concerned about the issue and made a resolution to find ways of enhancing the outcome of these programs. It led to the creation of the Platform CSR approach to enhance efficiency. Figure 4 below shows a model that can help explain the change process that took place at the firm.
Kurt Lewin’s theory of change identifies three stages that should be taken when introducing change in an organisation. The first stage is unfreezing, where employees and all the stakeholders are prepared for change (Yang & Huang 2016). The management of Alibaba Group explained to all the employees and stakeholders the need to introduce the new concept and the impact it would have on the organisation. They were convinced that it increase efficiency and impact of every project on the society. The second stage of the change process is to execute the intended change (Shin 2014). At this stage, the firm introduced the Platform CSR approach. The CSR department was assigned the role of executing all the relevant programs using this new model. The final stage is to refreeze, where the management ensures that the change becomes permanent (Yang & Huang 2016). It may require some form of training to address any existing weaknesses.
How the Changing Organisational Context Influenced Changes Undertaken
The changes that were introduced at this company were influenced by the changing organisational context. When the company started CSR activities in 2008, it was struggling to penetrate the international market and the company was mainly known among Chinese customers (Yang & Huang 2016). By 2012, the brand had started making impressive progress in the international market. The company was also planning for its initial public offering (IPO).
As such, it needed a strategy that would enable it to have a strong brand known both in the local and international market. It had to redefine its corporate social responsibility to achieve the emerging goals. Yang and Huang (2016) explains that before 2012, the company had achieved popularity in the local market as one that understands customers’ needs within the Chinese market. However, Chine was becoming a global exporter and Alibaba had a unique opportunity to capitalise on the growing global market.
The new strategy was meant to ensure that the firm’s CSR activities would have a significant impact on the firm in a way that would make it known in the local market. Although most of these programs were conducted in China, the management of the firm was keen on extending help to different other parts of the world. Its traditional strategy was considered ineffective. As such, the firm had to introduce the new system.
The firm was also in the process of redefining its leadership structure to meet the growing demand in the market. The changing organisational factors meant that the company could no longer use the unstructured approach of serving the society. This theoretical model can also be used when the management of this company is planning to introduce other changes to the current strategy based on global best practices.
Researcher’s Evaluation of the Outcome of Change
As shown in the case study, Alibaba Group introduced various changes in its corporate social responsibility initiatives to help address specific issues of concern. The management wanted to ensure that its corporate social responsibility initiatives have a desirable impact on the targeted population and on the company’s brand. However, it had become apparent that the previous method was not focused enough to strengthen the company’s brand locally. When the management developed the new strategy, it was expected to address all the major issues that were affecting the effectiveness of the previous program. In this section of the report, the researcher focused on evaluating the outcome of the change introduced to determine if it helped the company to achieve specific goals.
The outcome of the change that was introduced by the management of Alibaba Group can be described as satisfactory. The firm realised that it had to redefine the approach it took when offering various services to the society. As shown in the case study, the firm had to embrace sustainable projects. One of the areas that this company focused on was environmental conservation. According to Schmidpeter et al. (2015), pollution is one of the major issues in China as its industrial sector continues to grow. The massive amounts of plastic wastes generated from the retail sector means that companies such as Alibaba has a major role to play in protecting the environment.
The new strategy is effective because it enables this company to focus on specific social and environmental concerns. If the firm focuses on addressing the plastic waste menace, this new program makes it possible to have a clear plan on what should be achieved within a given area and by the end of a specific period. The management will know the resources that would need to be invested and stakeholders that should be involved to achieve the desired result. The team involved in the project will have a clear plan on how an individual employee should undertake different activities in the project.
Discussion
The case study above and information from the literature review shows that corporate social responsibility is an initiative that companies cannot afford to ignore in the current business environment. A firm’s operation in the market has a significant impact on the environment (Holtschneider 2015). It is only fair if a firm gives back to the society through various initiatives. One of the ways through which a firm can give back to the environment is through engaging in environmental conservation. According to Glowik (2017), a firm can embrace different environmental initiatives. One of them is to plant trees. China is one of the countries which are worst affected by the problem of environmental pollution (Di, Chymis & D’Anselmi 2014). Health experts have linked some of the emerging diseases to the massive air and water pollution. Children and the elderly are the worst affected population. If such trends are not reversed, then the environment will not be sustainable.
People will no longer afford to stay in large industrial cities such as Shanghai and Beijing. As such, an initiative taken by a firm to address such environmental concerns not only benefits the community but also the sustainability of the firm. Playing a role in enhancing the country’s healthcare system also has long-term benefits to the firm. Improved healthcare system creates a healthy population that can engage in different economic activities for the benefit of various companies (Holtschneider 2015).
Funding projects in the educational sector helps in promoting local skills needed to spur economic growth. It means that every initiative that a firm takes to give back to the society, it gets a direct long-term benefit. It explains why Alibaba Group has been increasing its budget in corporate social responsibilities in China. It understands that empowering the local population only creates a large market for its products.
The Role That Leadership Played in the Organisational Change
It is important to discuss the role of leadership in the initiatives that Alibaba Group took to embrace change in its corporate social responsibility strategies. When the company made the first decision to engage in CSR, its chief executive officer at that time, Jack Ma, supported it because he understood the responsibility of the firm to help the society at times of need. When the humanitarian crisis had been addressed, Mr. Ma and the top management unit of this company made a decision that CSR had to become a regular activity to be conducted on a regular basis. A small unit was constituted within the marketing department to facilitate such activities, especially at the end of the year. The massive change introduced by the firm was a demonstration of the commitment of the leadership towards improving service delivery to people of China.
Change can only be realised within an organisation if there is the goodwill from leadership. As shown in the case study, the decision to introduce Platform CSR approach was made after a study that was initiated by the management of the company. The leadership of this firm wanted to take a new approach that would ensure that the firm strengthens its brand while helping the locals. The management had to approve the funding for the new project.
Altenburger (2018) explains that when engaging in CSR activities, a firm should not expect to get direct financial benefits. It is possible that a firm may spend a lot on such programs, but its brand and products may not become popular in the market within a short while. It means that sometimes a firm may lack the financial incentive to engage in CSR programs. It may not make an economic relevance to the firm (Idowu, Schmidpeter & Fifka 2015). It takes commitment from the management to support programs that may not have direct financial incentives.
Challenges of Changing Organisational Culture
When introducing change within an organisation, sometimes it may be necessary to change organisational culture. Before the firm introduced Platform CSR approach, corporate social responsibility programs were conducted in an unstructured format where the management would choose an activity based on the prevailing external forces. However, that had to change and the management had to deal with challenges often associated with introducing new systems. One of the biggest concerns when introducing a new system is resistance to change (Pedersen 2015). People often resist change because of various reasons, one of which is the fear of the unknown. Some people tend to believe that when a new system is introduced, they may be forced out of the company because of the irrelevance of their skills.
In an attempt to protect their jobs, they would resist change because they feel it may remain useful to the firm. Some of the experienced employees may feel that whenever a new system is introduced that is based on the emerging technologies it may take long for them to learn the new practices. As such, they may lose their senior positions to the young workers who are more flexible and capable of learning about the new systems.
The management may also fear change because of the financial burden involved. According to Valvoda (2017), the leadership of a firm has a critical role of enhancing the value of a firm to its shareholders. One of the ways of achieving such a goal is to lower the cost of operation while at the same time increasing revenues to enhance profitability. Sometimes a change from one approach of undertaking activities to another involves spending a significant amount of resources. Such fears may make them fight an attempt to introduce change.
The management of Alibaba Group knew about these challenges when introducing a new culture that had to define how CSR activities were to be conducted. As such, it made deliberate steps to ensure that such and concerns would be eliminated. As shown in the case study, the firm had to start by addressing the concern of the shareholders about the impact of the initiative on the firm’s profitability. As such, the top management explained to the owners of this firm the benefit of the new culture of CSR. The long-term benefits were explained, especially at a time when the company was planning to go for its IPO. They were also made to understand that this initiative would strengthen the brand of this market beyond the local market.
The initiative provided it with an opportunity to strengthen its brand globally. When the concerns of the owners of the firm had been dealt with, the next step was to address fears of the employees. The company created a department that was fully focused on corporate social responsibility. It meant that not every employee would be affected directly by the new culture. The company then took these employees through a rigorous training to ensure that they understand what is expected of them when engaging in corporate social responsibility. Training is one of the best ways of overcoming the fear of the unknown when introducing a new culture within an organisation. It empowers employees by providing new skills that can be applied to achieve specific goals.
Alibaba also had to address the concern of diversity when introducing the new system. The company was growing rapidly and some of its employees were not locals. It meant that it had to create an environment where host country nationals (HCT) could work easily with parent country nationals (PCN) and third country nationals (TCN) (Altenburger 2018). The integration was critical because some of the activities needed involvement of experts from outside China.
The management had a major challenge transforming the organisation from an entity whose operational culture is based on Chinese social practices and beliefs to one that was tolerant to diversity and ready to embrace new global best practices. One of the initiatives that the management embraced was to train most of its employees to become bilinguals. It was necessary to enable them to interact with foreign nationals working within the company.
Funding and Coordinating the CSR Initiatives
When Alibaba Group engaged in corporate social responsibility for the first time, it was responding to a humanitarian crisis that had affected a significant number of people in China. However, when the crisis had been addressed, the management of the company had to redefine its approach to CSR in the country. Yang and Huang (2016) explains that it is crucial to plan CSR activities because it involves spending a firm’s resources (money, human resource, and time). Factors such as the amount of money that would be spent in the project, the department and individuals who will be directly involved, and the duration that specific activities should take must be defined in clear terms. Altenburger (2018) advises against having unplanned CSR activities because it may have counterproductive outcome to the firm.
The first item that should be defined is the department that should be involved in the CSR activities. At Alibaba Group, the marketing department is currently involved in all the CSR initiatives. The trend is common in many large companies because CSR is considered one of the initiatives of strengthening a firm’s brand in the market (Schmidpeter et al. 2015). Selecting the department also makes it easy to identify specific employees who should be involved in different activities.
Yang and Huang (2016) believe that such employees should be taken through some form of training so that they can understand what is expected of them when they engage in such activities. The marketing department is expected to select employees capable of representing the firm and giving a positive image of the brand when interacting with external stakeholders.
Funding of the CSR initiatives is another critical factor that the management must define to ensure that it achieves the desired goals in the market. When budgeting for various promotional programs, Valvoda (2017) argues that the management should set aside an amount that would be spent on CSR. It is important for the management to view corporate social responsibility as a way of strengthening the brand and at the same time giving back to the society.
The amount should be commensurate to the firm’s financial capacity and the nature of the activity (Schmidpeter et al. 2015). When a firm makes a commitment to spend a given amount of money on CSR that it beyond its capacity, it may default on making timely payment. As such, those who were expected to receive the donation may be dissatisfied. In such cases, the image of the firm may be negatively affected.
Conclusions
Corporate social responsibility is a noble initiative that a firm takes to improve the social welfare of the society. In such initiatives, the goal of the firm shifts from making profits, achieving market growth, or realising any economic benefits to helping the local community. As shown in the discussion above, a firm can select various social, economic, or environmental initiatives that are of great concern to the community. Many companies around the world are currently focusing on how activities that they can undertake for a long period. When a firm commits to paying school fees to a group of needy students, it should do so for some time, unless something more urgent emerges.
When it is about planting of trees, such a company should understand that the project could not be completed in a day. It starts by identifying places where trees can be planted, acquiring the seedlings, planting them and maintaining them until such a stage that they do not need watering and cannot destroyed by animals. The success of a CSR project may not be evident on the same day that it is conducted. As such, a great commitment may be required to realise the goals. The findings reveal that a firm should avoid CSR activities that may cripple the normal operations of a firm because of the financial burden. The firm can only continue giving back to the society if it remains profitable in the market.
The study reveals that many Chinese companies are currently involved in various corporate social responsibility initiatives. Many of these firms are focused on protecting the environmental from plastic wastes. Others are involved in tree planting, while others focus on various environmental initiatives. It is evident that education and youth empowerment are the other common CSR activities in the country.
However, the study reveals that only a few major corporations are conducting these activities in the right manner. In most of the cases, corporate social responsibility is a one-day affair, primarily intended to promote brand awareness for the company. Such companies would invite major media houses, proceed with the event, ensure that it is properly covered and focus on the impact on the brand instead of the society or the environment, which should be the ultimate beneficiary.
Alibaba Group Holding Limited is one of the leading companies in China’s retail industry. The company has been keen on achieving market growth in an industry that is increasingly becoming competitive. One of the initiatives that the firm has embraced to strengthen its brand is corporate social responsibility. Through its press release and the website, it is evident that this company has remained committed to giving back to the society. One of the main issues that were noted during the investigations is that this company does not consider such initiatives as activities that need consistency. The study shows that the company would shift from one CSR activity to another, which may not be directly related. As such, it becomes difficult for the firm to follow up on an individual project for long enough to ensure that intended goals are realised. The study strongly suggests the following:
- Alibaba Group should have a unit within its marketing department that is fully responsible for planning and executing CSR activities;
- The management of this company should select a specific CSR activity and invest in it consistently;
- The selected CSR activity should not burden the firm enough to paralyse its normal operations;
- It is necessary for the company to have a team of its employees responsible for following up the CSR activities until they are completed;
- In some cases it may be necessary to work alongside other firms when addressing a major issue that require more resources;
- The management of this firm should have a system that would enable it to monitor and evaluate the impact of corporate social responsibilities on a regular basis.
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