The Behavior of the Manager and Corporate Social Responsibility - Coursework Example

Corporate Social Responsibility Name Professor Institution Course Date Corporate Social Responsibility Introduction As the 21st century unfolds, corporate leaders find themselves make profit and also remain sustainable so as to continue operations in the market (Okpara & Idowu 2013). Even though sustainability is believed to have many opportunities, the contemporary managers are finding sustainable leadership to be very bumpy and with many challenges. According to David & Ramus (2007), corporations across the globe are stressed with a fresh responsibility requiring them to fulfill the demands of the current generation devoid of compromising capability of the subsequent generations meeting their needs. Current firms are required to take responsibility in their operation and how they affect the natural environment and society at large (Sacconi, et al 2010). Corporate Social responsibility has emerged has one factor firms use to address such need as well as business ethics, stakeholder management and corporate social performance. Based on the information, this essay will describe in a coherent manner the behavior of the manager in undertaking corporate social responsibility. Overview of Corporate Social Responsibility According to Sacconi et al., (2010), corporate social responsibility commonly referred to as CSR is a form of corporate self-regulation incorporated into a company’s business model in which an organization monitors and make sure its active observance with law, ethical principles and global norms. In a bid to appear to be more sustainable, some companies goes further than conformity and take part in "actions which involves doing social good, much more than personal company’s interest and what is recommended by law (Idowu & Papasolomou 2007, p.137). However, managers often find themselves in a dilemma whether to focus on making profits only or whether to also involve the company on massive corporate social responsibility. This is a culmination that business managers currently understand that their performance will not only be evaluated based on social responsibility but also based on financial performance. Actually, some experts claim that more profitable business is socially irresponsible and could pay no attention to most of its corporate responsibilities to the stakeholders. Similarly, unprofitable businesses in the current business arena scramble to increase their market share without looking too much into the social responsibilities which is usually entrenched on 3 P including People, Planet, and Profit (Okpar & Idowu 2013). Advocates of CSR argue of the three key pillars on the premise of supporting social equality, promoting the economy which they operate in and which benefits everyone, and safeguarding the environment (Ramirez, 2012, p.61). It is such situation that many companies have been praised and criticized on the equal measures. Nike is one such case. Walker (2012) claims “Nike’s vision statement state the company is committed to help Nike its customers to prosper in the sustainable economy, in which planet, people and profit are balanced. While Nike has taken part in several corporate social responsibility initiatives, it has also failed the society in different times. Nike has encouraged employment through sports. In 1984, Nike inc. facilitated signing of a basketball legend Michael Jordan in 1984 which boosted the images and sales of Nike tremendously (Walker 2012). On the other hand, people claimed that Nike has allowed fiscal imperatives to triumph over the company and societal value of ethical behavior and social responsibility as the company strives to reduce costs of operation and uncertainty. For instance, Nike Inc. also underwent condemnation of the child labor employment in its factories in Pakistan and Cambodia (Ogden 2014). The claim was that Nike used children in its factories to produce soccer balls in the 90’s. Again in 2001, BBC air a documentary where the media house revealed the incidence of poor working conditions and child labor in a factory in Cambodian which was contracted by Nike (Walker 2012). The behavior of the manager and Corporate Social Responsibility Managers are agents of the capitalism class who are mainly concerned with the profits. Therefore, managers can do anything to make profit. However, such arrangement does not favor companies because society expects it to be socially responsible; provide employment and conserve the environment (Picou & Rubach 2006, p.59). Since it is the managers who drive CSR, people asks questions concerning the motivations and interaction of managers to implement such initiatives. Behavior has emerged as drive which motives CSR. Personality is one important aspect which shapes the behavior of a person (Lussier & Achua 2004). It is this argument which makes The Big Five Model of Personality a critical tool in assessing behaviors which supports CSR. The elements under this model which can be analyzed to understand organization include agreeableness, surgency, conscientiousness, adjustment and openness to experience. Surgency are also referred to as extraversion traits. Daft (2005) contends that managers with high level of surgency have the need to influence the life of others positively. People with high extroverts’ traits are sociable; this is the behavior needed by a manager to coexist positively with members of the society. Daft (2005) went ahead to say that a manager who is sociable with have a great relationship with employees who are also members of the society, listens to them, and help them solves social problems facing them. Extrovert managers are also outgoing, and in the process, they learn problems facing societies, such as unemployment, economic inequality and social conditions such as pollution (Lussier & Achua 2004). In that way, the manager can help create job for members of the society to reduce economic inequality. He can create policies which help mitigate company pollutions. For instance, managers of Nike Inc through behavior and will have steered to be among the best companies driving climate change. According to Walker (2012) a new environmental Non-governmental organization called Clean Air-Cool Planet based in the UK ranked Nike amongst the top three corporations (out of 56) which promote environmental conservation in a study. Nike Inc. has time and again been admired for its program Nike Grind by groups such as Climate Counts. Managers that genuinely engage their organization in CSR without using it as a tool for marketing are believed to have agreeable trait. This trait is expressed in behavior where a manager is able to get along with members of the community (Daft 2005). Agreeable managers are considered to be socially motivated and create close relationships with people. The same can transferred to members of the society. Creating social relationship can be extended by coming up and sponsoring social activities such as soccer, tennis and rugby among others which brings company and society together. This is what Nike has been doing over the years. Ogden (2014) claims that even though some perceive some its corporate actions as marketing, the company has been supporting community development through sports. It has been sponsoring and supporting sporting activities through provision of kits and shoes. Scott Roxanna pines that Nike also sponsors many track and field athletes currently and in the past, such as Sebastian Coe, Carl Lewis and Oscar Pistorius. Today the company sponsors some of the best soccer players in the planet including Ronaldinho, Cristiano Ronaldo, Neymar, Mario Balotelli, Zlatan Ibrahimović, Didier Drogba, and Wayne Rooney among others (Ogden 2014). Ogden (2014) reports that Nike also acts as the official kit sponsor for many soccer clubs consisting of Manchester United, Queens Park Rangers, Monaco, PSV and Athletic Bilbao. Managers whom are strongly engaged in corporate social responsibility are also believed to be conscientious in terms of behavior. Conscientiousness entails traits which are associated with achievement (Lussier & Achua, 2004). Managers who necessitate for achievement often seek managerial and social challenges and strive to solve them. Today, one of the challenges is sustainability. Majority of the contemporary managers engages the company in CSR to win the heart of its customers and ensure sustainability. Ramirez (2012, p.62) maintains that with competition increasing, presently there is a thin line between genuine corporate social responsibility and marketing. However, conscious managers have prevailed over such challenges. For instance, the challenge of being seen as one of heavy polluters in the world prompted the Toyota Motor Company to formulate a plan to mitigate pollution and also save their image. JCNN (2005) posits that in 1997, Toyota Motor Company has since adopted production of fuel efficient and environmental-friendly by use of technology. Toyota is the leading company in environmentally-friendly automobile technology, most outstandingly RAV4 EV which it used to make between 1997 and 2003, and Toyota Prius which was introduced in 1997 and still continues to make (JCNN, 2005). Management experts consider that management who undertakes the CSR role are open to experience. In the information age, many members of the society are informed of the social role of the company (Gjerris, Nielsen & Sandøe 2013). They recognize that the action of the organizations has negatively affected natural environment over the years, and pose a threat to the next generation. Therefore, new ways must be devised to deal with such threat. Arlbjørn et al (2008) argues that a manager who is open to new ideas has an upper hand in the driving social corporate responsibility. Managers who do not have such traits find it hard to create a great relationship with the society. In that situation, the society may gang up to resist against the company because of social irresponsibility. For instance, Coca-Cola Company has been accused of excess without the proper mechanism for conservation. In 2004, locals of Kerala blocked the operation of a $16 million Coca-Cola plant stating that it led to a severe decline of water to farmers (Blanding 2010). Why managers undertake corporate social responsibility The common of implementation of the CSR in the current business environment by managers is because of its perceived role in business. While others argue that managers undertake the role of CSR for economic consideration, other claim it is because of ethical consideration (Stieb 2009, p.102). According to Sacconi et al (2010), numerous management scholars hold that economic consideration is driven by self interest and voluntary reporting. Such practices have increased by media pressure, reputation, investor’s relation and stakeholders’ pressure. Personal interest of the company is expressed in that the company undertakes corporate social responsibility so as improve its brand (Frederiksen 2010, p.363). In that perspective, CSR is used for brand management. The trends of using CSR for economic benefits are often seen in retail and food industries. Organization behavior experts state that a great CSR status impacts the consumer purchase decision to either purchase or desist. Research that investigated the link between CSR and brand management reported how Shell Company tainted its image because of environmental accidents in caused therefore there is a strong relationship between CSR and brand reputation (Arlbjørn et al 2008). Another economic benefit why managers undertake CSR in their roles is to improve shareholder value and capital access (Picou & Rubach, M.J 2006, p.56). In the current information age, shareholder is highly concerned with capital access and value provided by the firm. Hence, companies try so hard through CSR to satisfy expectations of the shareholders. Most companies therefore want their names mentioned Dow Jones Sustainability index (Gjerris, Nielsen & Sandøe 2013). In this front, companies also consider CSR help the managers improves their relationship with government. Research on companies and CSR holds that some firms so as to increase their reputation more so in terms of reporting and transparency. On the other hand, managers involve in corporate social responsibility for ethical considerations. In this view, CSR takes in issues such as community involvement, product safety, charitable activities, customer relations and equal opportunity (Wharton 2012). The ethical part of CSR is what the companies want to show that they are capable of providing societal needs while adhering to their culture. Culture is about values, norms and behavior of a society. It extends to what they consume. A company that comprises ethics so as to make profits might get it rough in terms of marketing and selling of their products. In 2003, Centre for Science and Environment, an NGO in India claimed that used pesticides in manufacturing which led to cancer in that country. Business Standard (2003) contends that the claims resulted to fall of sales in that country by 11 percent. The same was also confirmed by the Indian Health Minister. Even though, the Coca-Cola mission statement aimed to provide its customers with happiness and optimism, that was not the case in one of its distribution center in Belgium. In fact the company puts the lifes of 30 kid to risk by selling them poorly manufactured batch of carbon II oxide in 2006 (Blanding, 2010). In these two cases, customers resolved to boycott Coca-Cola products. Critical evaluation of the usefulness CSR Wharton (2012) contends that time periods have greatly changed and even though there are still company managers who conform to a Friedman’s view of company’s social responsibility to make profits, but many still consider ethical aspect of CSR a top agenda. Research by fortune magazine claims 20 years ago, just Fortune 500 firms could produce a CSR report. However, currently majority of companies does. In fact, over 8,000 companies across the globe are signatories of the UN Global Compact in which they show their commitment to labor standards, environmental protection and human rights (Wharton 2012). It is a demonstration that these companies will try to satisfy the present needs while uphold ethics of the society. Companies which conforms to good CSR practices have been able to gain trust of the society. Some of the companies which improve their images due to Good CSR include Microsoft Corporation, Google, Walt Disney Company, BMW and Apple among others (Smith 2012). Due to their heavy investment in CSR, these companies have been able to acquire a large customer base and also able to retain them. A research conducted by Cone Communications, found out that 9 of 10 customers would cease shopping with an organization with no corporate social responsibility programs (Stieb 2009). Companies with better corporate programs also increase chances of media coverage and improve government relationship. When companies increase their media coverage their product awareness also increases. On the other hand, when companies have a positive relationship with the government, it gets government tenders and increases its profits (Frederiksen 2010). Ethical behavior also forms part of managers who take up the CSR role. Ethical behavior help recognize what is right. Organizations operate in an environment where one culture may be right in one country but not recommended in another one (Frederiksen 2010, p.361). In some culture members of the society do not consume pork based on their religious beliefs. In a bid not to provoke cultures of Asian countries, fast food companies such as McDonald’s have introduced product which are not made of pork (Frederiksen 2010, 365). It is a proof that ethical managers differentiate themselves by carrying out what is convenient, popular and profitable. Ethical behavior also helps managers steer the company from corruption and acting as whistleblowers. Sherron Watkins is one whistleblower who is recognized for her in Enron Company. Ackman (2002) claims that in 2001 before the company becomes bankrupt, Watkins notified Kenneth Lay was the CEO of doubtful accounting practices she had observed in financial reports. As a Chartered Accountant Watkins understood that she owed the organization a role to make sure the correct reporting of the company accounts and also to spot irregularities and act prompt (Anderson & Orsagh 2004, p.70). She was bestowed with responsibly of alerting Enron board of the true position of finance in which not done, can lead to dire circumstances such as company collapse. Reporting the financial fraud showed that she was carrying out due diligence and care was as stipulated in the accounting laws. Also, she was acting in the best interest of shareholder based on agency relationship. Conclusion The essay has found out that CSR has been widely used by companies, government agencies and other institutions. Even though some companies use it genuinely to provide back to the society, the majority of contemporary companies use CSR to increase economic profits such as brand reputation and shareholder value. For the companies which has solely taken CSR for economic benefits has faced many challenges of criticism of social irresponsible and even boycott of their products. This is a strong message that lack corporate governance and professional ethics is a highway to shaky future, which may lead to collapse just like Enron, WorldCom and One.Tel. It is therefore concluded that a strong corporate citizenship is not just limited by the dream of its customers, and shareholders, and but also how the company adheres to its set ethics and corporate responsibility. References Ackman, D 2002, Sherron Watkins Had Whistle But Blew It, Forbes Magazine. Anderson, G & Orsagh, M 2004, The Corporate Governance Risk, Electric Perspectives, Vol. 29, No.1, pp. 68-75. Arlbjørn, J. S., Warming-Rasmussen, B., Liempd, D & Mikkelsen, O 2008, A European survey on corporate social responsibility, Kolding: Department of Entrepreneurship and Relation Management, University of Southern Denmark. 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Walker, M 2012, Nike's latest CSR report examines drop in emissions, labor challenges, south Florida Business journal, viewed on 3rd October 2014 from http://www.bizjournals.com/portland/blog/sbo/2014/05/report-nike-breaks-pattern-lowering.html Wharton, K 2012, Why Companies Can No Longer Afford to Ignore Their Social Responsibilities, viewed on 3rd October 2014 from http://business.time.com/2012/05/28/why-companies-can-no-longer-afford-to-ignore-their-social-responsibilities/ Read More