Corporate Social Responsibility - China Ocean Shipping Company - Research Proposal Example

?INTRODUCTION: China Ocean Shipping (Group) Company (COSCO) is amongst the top multinational companies in the world. In the context of market share, the company is the largest logistics shipping organisation in China and is amongst the top shipping logistics companies of the world (COSCO, 2012a). However with reference to Corporate Social Responsibility COSCO’s mission is to achieve growth and development by joining, amalgamating or aligning business processes with environmental, social, human rights and ethical matters. Moreover core strategies and plans are crafted with special consideration given to the social responsibility philosophy, and by collaborating with stakeholders. Moreover COSCO business practices illustrate practices that are fruitful for all (stakeholders, shareholders, workers, partners, suppliers, customers) (COSCO, 2011). In terms of social contributions COSCO is working on the principle of addressing workers to effectively participate in their community development, with its myriad activities are aligned and performed in order to participate in social growth and employees are also encouraged and supported in this regard. For instance COSCO in Singapore have been supporting Yellow Ribbon Project consecutively since five years, keeping in view that this projects has given employment opportunities to person who have been offenders previously by engaging locals in order to give them another chance. As a result COSCO is proud of the fact that many ex-criminals are now back serving societies (COSCO, 2011). Similarly in China COSCO group is very much fulfilling its duty of social responsibility by providing opportunities and supporting various education programs for needy students in China. For instance COSCO Zhoushan Shipyard devised a social activity by the name “Transfer Youth love, warm Tibetan Herdsman”. The core purpose behind this activity was to provide assistance and help for the needy Tibetan students in remote areas of Tibet. Likewise “Blue ocean plan love Tibet” launched by Trade union and youth league of Nantong Shipyard which consists of three main parts namely seagugll, seashell and dolphins was drafted in order to build a structure of support (long term) for the needy children of Tibets. The core aim behind this activity was to ameliorate literacy levels by donating basic school needs like bags, uniforms, books, toys, stationery and other material that is needed by students (COSCO, 2011). Besides these activities COSCO also provide help in terms of disaster relief and various other activities related to charity. COSCO is very much aware of the environmental issues and understands the seriousness of the matter. Therefore various innovations have been carried out by the organisation in order to come up with practices that could less effect the environment. For achieving this goal, different innovations are being carried out like the concept of GREEN SHIP OF THE FUTURE. This concept enables staff and workers to come up with eco friendly ideas and practices. As COSCO is very much keen on practicing and devising designs of ships and operations of management that best suits environment or are environment friendly (COSCO, 2011). LITERATURE REVIEW Corporate Social Responsibility Guthey, Langer, and Morsing (2006) have defined Corporate Social Responsibility as a practice of management that is garnering importance and nowadays is also considered as fad of management. Meanwhile it is believed that businesses around the world have incorporated CSR differently or CSR practices vary around the world. For instance many organisations have perceptions that CSR is an effective tool that can help confining risks and costs related to business operations (Hockerts, 2008). But only very limited amount of organisations are using CSR effectively in order to come up with originality and innovations. Likewise Blum-Kusterer and Hussain after studying 150 British and German pharmaceutical companies believes that in order to achieve sustainability in innovations, advancement in technology (process) and regulation are utterly important. Furthermore their findings revealed that attraction of promising market was not amongst the factor that motivated organisations, which they believe is regretful because fetching stakeholders into the progression of innovation provides organisations opportunities to ameliorate their financial and social infrastructure (performances). However Kocel (2010) has stated that organisations are integral part of the societies. Organisations also fall under the category of social living beings crafted by humans. These organisations like humans also interact with other rudiments of the system (society) that they live. Moreover various studies have been conducted since 1950’s in order to evaluate importance of this interaction as highlighted by Yilmaz (2006). Likewise pertaining the same view that since human beings collectively form organisations in order to fulfill those needs that are beyond their approach if tried to fulfill single handedly (Ozalp, 1996). Similarly organisations craft their processes (activities) in order to cope and satisfy the requirements of the people (group, community) in which they drive. Meanwhile in order to perform these sorts of activities, these organisations rely on the resources in which they are currently carrying their operations (located) (Ozalp, 1996). Davis (1967) highlighted that the theme of social responsibility considers the overall environment and surrounding of the social system with reference to the actions or behaviors carry forward by individuals or organisations in any specific or entire part of the system. Corporate social responsibility in general deals with the idea of protecting and ameliorating the society with reference to welfare and also enhancing business by saving and guarding of their interests (Carroll and Buchholtz, 2000). Relationship between Economic Crisis and Corporate Social Responsibility: Nowadays many countries around the world are jolted by serious economic crisis, because of which serious emphasis is given on importance of corporate social responsibility than ever before. As a result organisations around the world are asked to provide and create a social and economic value on mandatory basis. However this crisis is also known as “entrepreneurial crisis of maturity” Garnering evidence from this crisis importance of CSR is ameliorating day by day. Various researches, debates and discussions are carried out by researchers, students and businessmen in order to analyse the concept of CSR. However many believe that this concept is core requirement for businesses who are seeking sustainable growth in present world (Souto, 2009). Organisations today are caught in situations where they are expected to have fit corporate social responsibility practices, with it more pressure is exerted by the masses with reference to carrying out ideal social and environmental behaviors regardless of the fact that these organisations are facing serious economic crises as highlighted by report of Globe scan saloon (Globe Scan, 2009). Moreover the research further highlighted that expectations of people are rising with reference to CSR of organisations on the other hand the graph of perceived performance of CSR is showing continuous decreases, banking sector showing the lowest score in this regard (keeping in view that the data is collected from 32 developing or developed countries) (Globe Scan, 2009). However the relationship of Economic crisis and CSR can be analysed in three different stages these are: i. Incompetency With Reference To Ethics Of The Business Leaders Or Decisions Makers: This is one of the main core reasons for economic crisis as highlighted by Argandona (2011). He stated that organisations can confine or minimise effects of financial crisis by practicing and implementing corporate social responsibility practices in their systems (financial). Moreover Argandona (2011) has further suggested that only practicing CSR in the system is not enough, organisations should practice CSR considering the ethical values and practices (background) of CSR. ii. CSR as a threat in crisis: Since practice of CSR often require great amount of money, therefore it can also be considered as the negative aspect of CSR, moreover since CSR practices and strategies consume more time or their completion or practice usually undergoes significant amount of time therefore this is again a drawback in this regard. Furthermore corporate sponsorship overdose based on CSR purely for the purpose of marketing can very much affect the consumer’s perspective (from positive to negative). The main reason behind this is the chances of deteriorating or breaking sensitivity of customer because of the economic crisis (Irina-Eugenia, Laura-Gabriela, Cosmin-Silviu-Raul, 2010). iii. CSR as an opportunity in Crisis: There are various advantages that corporate social responsibility can come up with if organisations practice this during the time of crisis. These main advantages involve enhancement of relations with the stakeholders by providing services with utmost care and good engagement, loyalty, Innovations, investor confidence through guarantees, more bondage etc. Generally sustainability of companies can be attained by application of CSR policies, as during financial crisis organisation’s image can play good provided that corporate image of the company is constructed by involving and considering all stakeholders. For instance, it can benefit those sectors as well that are responsible for this economic crisis like financial and banking sector. Moreover CSR can be altered from threat to opportunity during the crisis period (Souto, 2009). Furthermore Peters (2009) has identified CSR as a management tool that can be effectively use in order to come up with the identification of ways that can confine or overcome economic crisis and also can meet future challenges with respect to environmental and social challenges (Peters, 2009). CSR in Greece: Greece is amongst the nation that is badly affected by the recent economic crisis and then it has been severely influenced by debt crisis; however the whole Europe is trying to bring Greece out from this crisis. However different organisations are coming up with ways in order to cope up with the crisis, but for organisations of Greece that are seeking to come out from this financial turmoil and that are willing to achieve their goals in terms of coming as ethical entities, effective application and practice of CSR is important. Conventionally effective application of CSR was difficult for organisations in Greece because of several barriers that were restricting its application. Amongst those barriers corruption, bureaucracy, and lack of enforcement from the state and less understanding of CSR by organisations have been prominent ones that have confined practice of CSR in Greece organisations as highlighted by Tzivara (2007). Meanwhile not all problems have been solved, some still exist but efforts are being conducted by organisations in order to cope up with the issue and to plant CSR in their business settings (Metaxas, and Tsavdaridou, 2011). According to Transparency International Report (2004) Greece has been ranked 50th out of 133 countries that have highlighted corruption as the primary hurdle in terms of practicing CSR in businesses. Similarly Social Economic Committee (SEC) of Greece has highlighted some of the important issues that one way or other are creating hurdles for the application of CSR, these hurdles include obscurity in compliance with the rules and regulations (laws) with government, with it another core issue was the family ownership of businesses that resulted in creating hurdles for the effective practices of CSR in Greece (Metaxas, and Tsavdaridou, 2011). However Social Economic Committee has also given guidelines about the effective application of CSR, its development and the benefits associated with its application. Moreover the committee also highlights the importance of CSR with reference to building relationship amongst the stakeholders, state and company in order to successfully practice CSR in business settings and to achieve CSR related goals (Metaxas, and Tsavdaridou, 2011). Moreover other important barriers (with reference to performance of CSR in Greece) as highlighted by Skouloudis et al (2011) were short term profit by small and medium industries in Greece, which further garner ways for ineffective expertise or lack of profession expertise, wastage of resources and time, insufficient stocks of community resources (capital). Keeping in view that Skouloudis Evangelinos, Nikolaou, Filho, (2011) have highlighted these barriers in accordance with industrialisation declination in Greece (with reference to performance of CSR). Meanwhile University of Athens came up with the survey in 2006 under the funding of European Commission, with special focus on CSR in small and medium industries (launched by Hellenic network of CSR). This survey was under the umbrella of Hermes Program which deals with the knowledge about the application and working of CSR in small and medium enterprises (Hellenic Network for CSR, 2006). The findings have revealed that 34% of the actions of CSR are directed towards HR (human resource); likewise organisations that were linking enhancements of their (direct and indirect) profits with CSR were 60%. Moreover findings further revealed that 54% of the organisations had this perception that cost related to CSR is very much minimum or even some operations have no cost at all. Furthermore 35% of small and medium size industries adopt CSR in a moderate manner and 53% in very confine and small manner. In order to analyse and evaluate the position and trends of the business community of Greece a qualitative study was conducted by Hellenic Network (Hellenic Network for CSR, 2000). The survey highlighted or categorised five different kinds of organisations which are mentioned below: 1). The Non Sensitised: companies under this category deliberately ignores social responsibility and usually pose reluctant behavior towards their social responsibility. 2). The Philanthropist: this type of organisations works under the teaching and guidance of its leader or founder. All moral actions (rules and regulations) and values of the company are extracted from the choices that founders or leaders have adopted. 3). The random sponsor: organisation under the umbrella of random sponsor has one clear and distinct goal i.e. to create a healthy and strong corporate reputation of the organisation via sponsorships. 4). The consistent sponsor: usually this kind of organisation work in order to enhance the social and physical environment by making healthy contributions. 5).The corporate citizen: this kind of organisation aims to contribute by planting concept of corporate social responsibility into the system, consequences alterations and amendments in the decision making process with reference to the corporate philosophy of the organisation (Hellenic Network for CSR, 2000). However findings of the survey highlighted important fact regarding the active corporate citisen by placing a question that other four types of the organisations one way or other falls under the same category (typology). Furthermore the survey revealed that companies that are operating in Greece are showing more responsibilities in terms of playing their role for the society (Hellenic Network for CSR, 2000). Crisis and CSR With Reference To Threat Or Opportunity: Businesses around the world had to face serious crisis that came forward some years ago. This crisis has resulted in jolting businesses and also demolishing various economies around the world. The impacts of crisis can be seen even today, however different countries are coming up with different ideas in order to cope up with this catastrophic situations. Some are able to confine its affects while others are lost in translation. Aftereffects of crisis have resulted in changing the mindset of the stakeholders, leaving business leaders to think of the possibilities in terms of bringing innovations and changes in the business processes. This further garner evidence and come up with the understanding of sharing of capitalist earnings considering the long term relationship with the stakeholders by giving great importance. Moreover importance of relationship with groups (people) that are affected by the actions of organisations (Becchetti, Ciciretti, and Hasan, 2007). As a result one question has arisen that whether CSR has any relation or ties with the enormities of economic development connected to affluence. And if by chance there is any relation then what is the nature of this relationship? However various literature studies and researches have been carried out in this regard that deals with answering the above mentioned queries, but the findings are incoherent. As a result the relationship of CSR with the profit, cost, survival with reference to long range etc are not obvious (Souto, 2009). However in order to develop the best understanding of the above mentioned confuse relationship between CSR with financial performance, perspective of investor and value of shareholder etc, given below is a table 1 that will elaborate relationships amongst different factors highlighted by different researchers in different times as highlighted by Geczy, Stambaugh, and Levin (2005). (figure 1) (Souto, 2009) Upon considering the above mentioned table it is clear that positive effect of CSR strategies on economic performances have been highlighted by many of the researchers, but still there are many doubts as the effects are not well directed or clear with reference to financial performance. Moreover CSR highlight optimistic effects on internal variables for instance culture (entrepreneurial) and motivation. However various uncertainties exist regarding the shareholders real value and implementation benefits of CSR (applications) as these areas are not probed. Likewise another important development that one can see after reviewing the above mentioned table is that relationships are inconsistent regardless of the different methodologies and practices used in order to come up with the findings, as usually disclosures are not in accordance with CSR requirements (Orlitzky, Schmidt, and Rynes, 2003). Meanwhile there is not enough evidence regarding the relationship between CSR and economic financial performance, moreover CSR practices are dependent upon the financial stabilities (funds) because it breeds costs (Levis, 2005). As a result practicing CSR during time of crisis hold serious threats for organisations (Souto, 2009). On the other hand considering the other side of the coin, the other perspective is dependent upon the hypothesis which comes up with the view or hold the idea that CSR has more value than contemporary fashion (Souto, 2009). As CSR is considered to be a management tool that will adopt changes persistently all over time (Gil Estallo, Giner de-la Fuente, and Griful-Miquela, 2007). However still there is roam of further development in the CSR as the ideal global framework for CSR is still not achieved. Meanwhile in order to achieve this goal, maturity of tables that will cope CSR are utterly important. As various important developments are being carried out in order to serve the above mentioned purpose. For instance entrepreneurial, academic and institutional work has been brought up by researchers. Likewise De Witte and Jonker in order to ideally manage CSR compiled precisely more than forty models over the spam of five years, with variety of ranges and varied courses (Souto, 2009). Regardless of the diversification present in all the models, still commonalities with reference to issues do exist amongst all of them, this can be re positioned to alter the viewpoint of effectively endorsing CSR models in crisis (from threat to an opportunity). (figure 2) (Souto, 2009) (figure 3) (Souto, 2009) The above mentioned figures and data was put forward in order to come up with better understanding of the double relationship amongst the crisis and CSR. Meanwhile relationship entails that lack of adoption of CSR has resulted in bringing economic crisis, furthermore practicing CSR effectively and using this as a management tool can help organisations coming out from the crisis (Souto, 2009). RESEARCH METHODOLOGY This part of the proposal explains the research methodology that the researcher will use in order to conduct the research and achieve the aims and objectives of the research study. The main aim of this research study is to examine and analyse the impact of economic crisis on the corporate social responsibility of firms. However as the research topic is broad therefore the researcher has specifically focus on COSCO Greece and therefore the research study has been conducted to analyse the impact of economic recession on CSR activities in COSCO Greece. Data Collection Method The researcher will be using a combination of primary as well as secondary data in order to collect information. Primary data will be collected from questionnaire survey and interviews from employees working at COSCO Greece. Secondary data will be collected using different published reports, journal articles, books, online newspapers etc. Secondary data will be used by the researcher to lay down the foundation or concept of the research study. However, primary data will be used by the researcher to analyse the impact of economic crisis on the CSR activities of COSCO Greece. Combination of primary and secondary data allows the researcher to analyse and compare the primary findings with the published literature (Bell, 1999, P.116,). Research Strategy The researcher will be using a combination of qualitative and quantitative data. Such a combination of qualitative and quantitative data will allow the researcher to better understand the research topic and thus, it will help the researcher in better answering the aims and objectives of the research study (Patton, 2002). ETHICAL CONSIDERATION The researcher will make sure that the research conducted is according to the ethical standards. While collecting information from the secondary research, the researcher will be making sure that the research study does not violate any copyright issues and therefore the researcher will be providing all the sources used in the research study. In addition to this, the researcher will also be making sure that ethical standards are maintained while collecting primary information. For this purpose, the researcher will be making sure that the information collected through questionnaire and interviews are solely used for this research study. List of References Argandona, A. (2011). ‘The Management Case For Corporate Social Responsibility’. IESE Business School. Available from http://www.iese.edu/research/pdfs/DI-0930-E.pdf [Accessed 23 December, 2012] Becchetti, L., Ciciretti, R. and Hasan, I. (2007). Corporate Social Responsibility and Bell, J. (1999). Doing your research project, 3rd edition. Buckingham: Open University Press. Blum-Kusterer, M., & Hussain, S. S. (2001). ‘Innovation and Corporate Sustainability: An Investigation into the Process of Change in the Pharmaceuticals Industry’. Business Strategy and the Environment, vol. 10, pp. 300-316. Carroll, A.B. ve Buchholtz, A.K. (2000). Business and Society: Ethics and Stakeholder Management, Fourth Edition. Australia: South-Western College Publishing. Companies’. Journal of Asian Economics, vol. 17, no. 1, pp. 50-55. COSCO. (2011). Annual Report 2011. Available from http://ir.zaobao.com.sg/cosco/cosco_ar2011.pdf [Accessed 21 December, 2012] COSCO. (2012a). Mission Statement. Available from http://www.cosco.com/en/about/index.jsp?leftnav=/1/1 [Accessed 21 December, 2012] Davis, K. (1967). ‘Understanding the Social Responsibility Puzzle’, Business Horizon, pp. 45-50. Geczy C. C., Stambaugh R. F., and Levin, D. (2005). Investing in Socially Responsible Mutual Funds. Wharton School Finance, Working Paper. Gil Estallo, M.A., Giner de-la Fuente, F., and Griful-Miquela, C. (2007). ‘The Importance Globe Scan. (2009). GlobeScan Salon Briefing: CSR in the Economic Crisis. Available from http://www.globescan.com/news_archives/salon_lon-0109/[Accessed 21 December, 2012] Guthey, E., Langer, R., & Morsing, M. (2006). Corporate social responsibility is a management fashion. Copenhagen: DJOF Publishing. Hellenic Network for CSR (2000). The CSR in Greece, Issues and Prospects. Available from http://www.csrhellas.org/csr_last2/portal/images/stories/files/DiktioAggliko.pdf [Accessed 21 December, 2012] Hellenic Network for CSR (2006). Survey for CSR in SMEs. Available from http://www.csrhellas.org/csr_last2/portal/images/stories/files/SURVEY_RESULTS_eng.pdf [Accessed 21 December, 2012] Hockerts, K. (2008). ‘Managerial Perceptions of the Business case for Corporate Social Responsibility’. CBSCSR Working Paper Series: Copenhagen Business School. Irina-Eugenia, I., Laura-Gabriela, C., Cosmin-Silviu-Raul, J. (2010). ‘Corporate Social Responsibility During The Economic Crisis: The Case Of The Romanian Companies’.  Economic Science Series, Vol. 19, no. 2, pp. 963. Kocel, T. (2010). Isletme Yoneticiligi. Beta Bas?m Yay?m Dag?t?m, Istanbul Levis, J. (2005). ‘Adoption of corporate social responsibility codes by multinational Metaxas, T., and Tsavdaridou, M. (2011). ‘Corporate Social Responsibility In Greece: A Comparative Analysis Of The Three Major Energy Companies (Case Study)’. Management, Vol. 17, no. 2, pp. 119-140. of Corporate Social Responsibility and Its Limits’. Int Adv Econ Res, vol. 13, pp. 379–388. Orlitzky, M., Schmidt, F.L., and Rynes, S.L. (2003). ‘Corporate Social and Financial Ozalp, I. (1996). Yonetim ve Organizasyon. Birlik Ofset Yay?nc?l?k, Eskisehir. Patton, M. (2002). Qualitative research and evaluation methods. Thousand Oaks CA: Sage Publications Inc. Performance: A Meta-analysis’. Organization Studies, vol. 24, no. 3, pp. 403–441. Peters, A. (2009). ‘Pathways out of the crisis: CSR as a strategic tool for the future’. Bertelsmann Stiftung. Available from http://www.bertelsmann-stiftung.de/cps/rde/xbcr/bst/CSR-Trendstudie_Wege_aus_der_Krise_final_EN_final.pdf [Accessed 23 December, 2012] Shareholder’s Value: An Event Study Analysis. Federal Reserve Bank of Atlanta. Working Paper. April. Skouloudis, A., Evangelinos, K., Nikolaou, I., Filho L. W. (2011). ‘An overview of corporate social responsibility in Greece: perceptions, developments and barriers to overcome’. Business Ethics: A European Review, vol. 20, no. 2, pp. 205-226. Souto, B. (2009). ‘Crisis and Corporate Social Responsibility: Threat or Opportunity?’. International Journal of Economic Sciences and Applied Research, vol. 2, no. 1, pp. 36-50. Tzivara, K. (2007). CSR: How Far Has Greece Gone? A Case Study: Piraeus Bank. Available from http://www.eurocharity.org/en/article.php?article_id=2426 [Accessed 21 December, 2012] Y?lmaz, K. (2006). ‘Orgutlerin Sosyal Sorumluluklar?: Kavramsal Bir Cozumleme’. Mehmet Akif Ersoy Universitesi Egitim Fakultesi Dergisi, vol. 12, pp. 65-79. Read More