The Ford Firm’s Corporate Social Responsibility

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Introduction

Nowadays, shareholder profit maximization has ceased to be the only goal of well-known public companies. Over the past few decades, corporate social responsibility (CSR) has also become a priority (Sigel, 2021). According to Bateman et al. (2020), the concept of CSR stands on four pillars — economic, ethical, legal, and philanthropic. The economic pillar implies the profitable production of goods and services wanted by society. The legal pillar shows a corporation’s willingness to obey the relevant national and international laws. Next, the ethical pillar represents a commitment to following social expectations not stated in written legislation. Finally, the philanthropic pillar encompasses activities found commendable by society and supported by corporate values. One should realize that CSR initiatives are not necessarily a zero-sum game for a company — they can benefit shareholders by increasing brand value (Sigel, 2021). However, CSR efforts must align with the company’s mission statement and be transparent in order to produce meaningful results and satisfy public expectations.

CSR Policy

Ford Motor Company (hereinafter referred to as Ford) serves as a fine example of a well-known American public company with a comprehensive CSR policy. In particular, Ford’s CSR policy is presented in the annual Integrated Sustainability and Financial Reports. For instance, the most recent 2021 Report informs the public about Ford’s position and achievements in the following areas: Strategy and Governance, Economic and Innovation, Environment, and Social (Ford, 2021a). The Strategy and Governance area covers such matters as transparency, trust, and ethical business conduct. The Economic and Innovation section offers financial performance data for stakeholders and announces innovative solutions that align with Ford’s commitment to social responsibility. The Environment area of CSR policy explains how Ford envisions environmental protection. Lastly, the Social area focuses on diversity, inclusion, and human rights (Ford, 2021a). Ford’s CSR policy is presented in four distinctive and transparent categories.

Pillars of CSR

Regarding the pillars of CSR associated with Ford’s policy, one can examine specific initiatives covered in the 2021 Integrated Sustainability and Financial Report. For example, Ford acknowledges the issue of climate change and aspires to reach carbon neutrality by no later than 2050. The 2050 benchmark is set in accordance with the Paris Agreement; in addition, Ford sets interim targets for CO2 emission reduction by 2030 (Ford, 2021a, p. 41). In this case, Ford’s initiative stands on the legal CSR pillar since the company tries to prove its commitment to international agreements on climate change. Furthermore, Ford joins the state of California in pursuit of stronger greenhouse gas standards, which also align with the legal pillar of CSR (Ford, 2021a, p. 41). In this regard, Ford underscores its legally-based adherence to CSR by endorsing the push for stricter environmental legislation.

In addition, Ford pays significant attention to the ethical pillar of CSR. For example, the company conducted a diversity and inclusion (DEI) audit with the assistance of Deloitte (Ford, 2021a, p. 63). Following the DEI audit completion, Ford appointed its first Racial Equity Director in history, who was tasked with identifying and removing potential systemic barriers and inequities (Ford, 2021a, p. 64). Whereas such action was not mandatory by the law, Ford took it in order to enhance employee experience at all stages — from recruiting to departure. Racial and social equality is largely expected in modern corporate culture, and Ford did more than required by U.S. legislation to meet the ethical expectations of the public.

Mission Statement Alignment

The corporate mission, or in Ford’s case — purpose, is explicitly stated in the 2021 Integrated Sustainability and Financial Report. Ford (2021a, p. 7) states that its purpose is “to help build a better world, where every person is free to move and pursue their dreams.” This broad purpose statement corresponds with the four key areas of Ford’s CSR policy — Strategy and Governance, Economic and Innovation, Environment, and Social. The meaningful CSR policy must be aligned with the corporate mission; in this regard, Ford pays attention to both human beings and the world around them.

For instance, the claim of building a better world finds confirmation in the environmental section of Ford’s CSR policy. Ford contributes to the United Nations Sustainable Development Goals (UN SDGs), such as clean water, sanitation, and affordable, clean energy (Ford, 2021b). In particular, Ford’s 2025 Global Manufacturing Water Strategy targets a 15% reduction in absolute freshwater use (Ford, 2021b, p. 10). Ford also achieved a 40% absolute reduction in global manufacturing carbon footprint since 2011 (Ford, 2021b, p.11). Therefore, Ford’s mission statement aligns with its CSR environmental initiatives.

The second part of Ford’s mission statement focuses on every person’s freedom. Freedom requires decent working conditions, and Ford’s CSR policy aims at improving the employee experience. For example, Ford strives to maintain a healthy and safe work environment, follow ethical recruitment practices, and ensure workers’ right to freedom of association and collective bargaining (Ford, 2021b, p. 12). As such, Ford’s mission statement aligns with actual CSR initiatives, which is necessary for its success.

Conclusion

The corporate mission statement must align with the CSR policy in order to produce meaningful results. The company’s mission manifests itself in corresponding CSR initiatives in Ford’s example. Some of these initiatives stem from the existing laws and international agreements, making them related to the legal CSR pillar. In other categories, such as diversity and inclusion, Ford’s actions are guided by ethical considerations rather than the current legislation. Overall, Ford serves as a solid example of a corporation with a logical, transparent, and well-structured CSR policy.

References

Bateman, T. S., Snell, S., & Konopaske, R. (2020). Management. McGraw-Hill Education.

Ford. (2021a). Integrated sustainability and financial report 2021. Web.

Ford. (2021b). UN Sustainable Development Goals index 2021. Web.

Sigel, A. (2021). CSR statements: Incentives and enforcement in the wake of the Business Roundtable’s statement on corporate purpose. Boston University Law Review, 101(2), 803-833.

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BusinessEssay. 2023. "The Ford Firm's Corporate Social Responsibility." January 21, 2023. https://business-essay.com/the-ford-firms-corporate-social-responsibility/.

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BusinessEssay. "The Ford Firm's Corporate Social Responsibility." January 21, 2023. https://business-essay.com/the-ford-firms-corporate-social-responsibility/.