International Business Machine Company - Relationship between Performance and Corporate Responsibility - Example

Running Header: Incident Command System Student’s Name: Instructor’s Name: Course Code & Name: Date of Submission: 1.0 INTRODUCTION Ethic is a moral belief of judging whether something is wrong or right. Therefore, ethical decision making is a way of making corporate decision making basing on the accepted principle of right and wrong with the aim of gaining competitive advantage than the other organization, it is part of legal requirement and also for a company to maintain its reputation. ethical decision entails two core stages this are setting out values which are norms of the society and it acts as guidelines to the decisions taken by the company and moral principle which act as the frame work in which the decisions taken should operate within in accomplishing the values. This report is conducted on international business machine Company with the aim of establishing the relationship between the performance and the corporate responsibility in the company and how can it be implemented in the process of the decision making during standard formulation that is ethical decision making. 2.0 INTERNATIONAL BUSINESS MACHINE BACKGROUND International business machine head quarter is located in New York, United States. Its core business is computer hardware software and hardware manufacturing, consultation, hosting and infrastructure services. And it has over 1300 employees at the head quarter and over 433,363 employees in over 170 countries both scientist, sales persons and subordinate staff. Wiston, the former CEO based management decision making in his tenure on ethical decision making since he brought in employee educational department, he introduced employee magazine and he used open door policy in his management approach which boosted employee motivation. Though his effort faced difficulty in 1930 depression he continued with his policy of actively investing on people increasing the number of employees and investing on innovation too. In addition to Wiston effort Louis new C.E.O from 1994 also made a big step in focusing its effort on corporate social responsibility and this increased its profit to $3 billion dollars in that same year. International business machine has been ranked among 14 United States companies who have successfully achieved environmental, safety and healthy goals in endlessly improving its management practices and it has ploughed over than $1 billion since 1973 to 2007 on conserving environment within its offices on its headquarters. In 2007 the company was ranked 12th by the EPA through its effort in cutting down the emission of green house gases and achieving the 4% use of renewable energy International business machine company lays emphasis on four major key areas in responding to corporate responsibility issues that is: Solving societal problem by use of technology, measure of the response from its initiatives and programs, empowering employees and others like students to serve the community, corporate loyalty and social responsibility in every decision of the company. The latest move by international business machine that moved me most in looking into ethical decision making in the company is the initiative of empowering student who have great technological knowledge by giving them platform to explore their potential. 3.0 CORPORATE SOCIAL RESPONSIBILITY STANDARDS 3.0.1 Triple bottom line. It is one of the standards that are used as a framework of reporting its corporate responsibility on the business performance. It comprises of four arms of that is economic, social, and environmental effects of the company day to day activities. This is as a result of ever rosining need in the world due to challenges such as green house effect brought by the destruction of ozone layer, exhaustion of natural resources, energy crisis and the growing inadequacy of water all this problems arises from the increasing level of population and it has been proposed that business should play the key role in maintaining and improving the present condition society as they derive the benefit from it, thus shifting business concentration on the financial gain i.e. profit maximization. All the above is aimed at creating a sustainable environment for the future generation instead of assuming that the future generation will need to adjust to the conditions present at their time as per assumption of some companies. Due to the above aspects the standard plays a key role in measuring performance of the IBM corporate social responsibility because it is more exhaustive than the other measures. 3.0.2 Global Reporting Initiative (GRI) It was developed in the year 1999, it focuses on transparency that is how the company benefit leads to benefit to all stakeholders to the business. This lead to new frameworks guidelines in the market and it comprises of multi-stakeholder process where they came together to develop guidelines on how to report on the sustainability standards to be used in measuring the corporate social responsibility, it also brought about institutional process in which the institution it self made their own corporate social responsibility framework in which they prefer to report the standard in and lastly the came up with institution in which they acted as they acted as watchdog that the company acts according to the frame work developed under global reporting initiatives. The standard was based on the need for the company to ensure that they benefit from the society and at the same time the society benefit from the company thus creating a win-win situation at the end. The structure and strategy used in developing and implementation was based the process of inclusions of the relevant stakeholders in developing the guidelines, collaboration of the other international bodies through consultation, testing and also correcting the standards inadequacy, the use of the internet plat form to enable ease and diversify the structure guidelines by gathering information from all over the world, it also considered the need of the framework to be efficient in measuring and lastly the transparency in accounting of the corporate social responsibility. 3.0.3 AA 1000 It mostly based on the management of the stakeholder and as per the standard, it is developed on the basis of the stakeholder to satisfactions. it is commonly used due to it’s suitability in way of measuring performance in comparison to other methods this because of its ability to be divided into sub-programs making it easy to know where it needs improvement and also which part of the program is ineffective so as to eliminate and save on cost. Furthermore, it enable one to know how committed the management is in achieving the objectives of the program thus the standard serves for the benefit of the stakeholder making it more favorable. The standard recognizes a stakeholder as the person who is among the owners of the organization, success of the company is attached to him or her and the companies constantly keep communicating with him or her in relation to the following factors the stakeholder stand out to be anybody whose any decision made affect either directly or indirectly. This standard will work well when incorporated with the triple bottom line since the issues touched by the triple bottom line is derived by the AA 1000 in the development of the concept. 3.0.3 SA 8000 The standard is based on the basis of developing framework that considers the working environment or condition of the worker as part of the stakeholder in the business. Though the standard is disapproved by business due to increase in the cost of implementing some of the corporate social responsibility while the social benefit does not reflect on the social benefit derived from it thus being ruled out by most business. 4.0 RELEVANCE OF THE STANDARD IN IBM IBM uses the triple bottom line standard in measuring the performance of the corporate social responsibility since they are concerned with economic that is improvement of the financial position in respect with the prevailing market conditions i.e. profitability of the company, it is also concerned with the social welfare of its stakeholder and they have programs touching on the social benefit such as providing funds to student who have innovative ideas and they want to venture them and lastly the environmental concern this includes conservation of energy, protection of the water source, waste management and policy making in the international environmental forums on environmental protection thus making the standard more relevant in valuing the performance of the company on the implementation of the above corporate social responsibility program. The triple bottom line is implemented by IBM in many ways, for the economic aspects of the company, IBM aims at having a growth rate of 14.33% this year, it is the most important aspect of triple bottom line measure since it relates to, the shareholders, company and other stakeholders to the business since earning growth will improve organization to deliver quality services and at the same time venture into new areas to satisfy unsatisfied need in the society. Second arm of triple bottom line is social benefit, this relates to consciousness of the company to the community in which the company is based. IBM has targeted to improve on disaster recovery tools for example it is involved in Sahana: open source for disaster recovery, where it help trace the relatives of refugees and also assist in psychological training of the traumatized victims of the aftermath of a disaster. In addition to this it has education programs e.g., KidSmart Early Learning program and also cities and citizenship programs for example Smarter Cities Challenge where it targets to award 50 million dollars in almost 100 cities in the globe. Thirdly, the company is involved in environmental issues which are the third arm of the triple bottom line performance measure, the company targets at complying with environmental laws, regulation and standards for example issues that touch environmental reporting, energy requirements, waste and chemical disposal and also ensuring they obtain all relevant licence and permits concerning environmental issues. The above targets of the IBM company makes the triple bottom line the most favourable instrument of measuring and reporting performance of the corporate social responsibility carried out by the company since it takes into consideration all the elements required for the triple bottom line tool to be relevant, that is environmental, social benefit and economic aspects. 5.0 ELEMENTS OF THE CORPORATE SOCIAL RESPONSIBILITY PROGRAM AND ACHIEVEMENT. ELEMENTS 5.1 The corporate social responsibility entailed the following elements Waste management through recycling and efficient operation, Climate conservation, Water management, Energy sustainability and Transparency sustainability. 5.2 ACHIEVEMENTS The company measured the performance using the above corporate social responsibility and it made the following accounts on each element. On energy sustainability the company implemented efficient operational practices that resulted to a huge cut on the energy waste by a great proportion and to support the above assertion in 2006 IBM came up with way of reducing energy consumption “Established IBM’s 2nd generation CO2 emissions reduction goal, building upon its results between 1990 and 2005: IBM’s energy conservation actions conserved 4.3 billion kWh of energy, avoided 2.7 million metric tons of CO2 emissions (an amount equal to 40 percent of its 1990 emissions) and saved $273 million in energy expense” (40 years of IBM environmental leadership). It also got rated the first company to earn registration of ISO 14001 pertaining environmental conservation. In the above the company celebrates tremendous achievement on implementing the program and attaining the objective set. Waste management was one of their areas of concentration and they managed to increase their recycling percentage since in 2003 the company recorded outstanding performance by through collection and recycling of e-waste weighing 1 billion pounds. On climate conservation they played a major role in international programs on how to protect the environment and they took a step by elimination of the use of some of the materials such as perfluorooctane sulfonate (PFOS) and perfluorooctanoic acid (PFOA) in its manufacturing, development and research processes. It also earned a lot of credit and recognition and this boosted the image of the company on the concern with environment. In 2000 the company launched a water management goal and it was aimed at efficient utilization. It also includes the proper way of disposing waste to the water bodies with out polluting. In addition to it launched a program in which it was to monitor quality of ground water within it area of operation and solved any abnormal condition in order to avoid intoxication of the water which might result poisoning those who are within the locality. 6.0 EVALUATIONS. The overall corporate social responsibility show success since what the company set to achieve was visible this includes the performance on environmental issues which is made up of outstanding performance on management of energy sustainability where it recorded great achievement of conserving 4.3 billion kWh of energy this was a result of adopting modern ways and use of renewable sources of energy, waste management the company was its score point where it achieved to collect and recycle e-waste weighing 1 billion pounds, climate conservation and water management where it was able to tap rain water, this played an important role in conserving water. Performance on social benefit included improvement of technology know-how by the community this is as a results of developing Information Technology Hubs in most countries, in which the community can train on how to use computers, also it has improved innovation in within the young through its initiatives and lastly creation of employment to improve livelihood of the community. On economic aspects of the company, the company has constantly experienced growth since the period it experienced recession in the year 1938, for example the pre-tax margin rose by 12 points to 22.2% from 2000. This is significant to the company, shareholders and other stakeholders of the company. The reason of success is as a result of working within the framework of the Triple bottom line which resulted to great performance on environmental, social aspect and also on the economic part of it since the company recorded growth on its profits from the previous year. Thus the project was cost effective and responsive due to the improvement of profits and public image. 7.0 RECOMMENDATIONS. The standards used IBM are internationally accepted and it is based on a wide range of consideration to suite each business sectors therefore, it has negligible inadequacy in comparison with other standards which includes GRI and SA 8000. For example firms using SA 8000 which is based on the working conditions doesn’t reflect much on the social benefit achievement of the ethics program by organisation. In addition to this it is not cost effective since the cost of implementing the standard requirement is huge but the benefit is much less than the cost incurred. Thus the use of triple bottom line and AA 1000 is highly recommended when measuring the performance of ethic decision program. 8.0 CONCLUSION In conclusion it should be noted that it is very important to check on the performance of the effort of each action a company takes but the performance is not just an observation that you look at and draw a conclusive report, it should be based on the international recognized standards of measurement in order to arrive at an accurate report which is future used in analyzing actual performance and the standards of the project and drawing the decision to be taken either correction, elimination or addition of ideas. Therefore every effort should be measured according to standards for the corporate social responsibility to have and add more sense in it. REFERENCES. 1. Chairman letter, 2012 IBM annual report [online ] available from: http://www.ibm.com/annualreport/2012/bin/assets/2012_ibm_annual.pdf 2. Barney, J. (1991). 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