An Analysis of the CSR Strategies of Del Monte Kenya Limited - Assignment Example

An Analysis of the CSR Strategies of Del Monte Kenya Limited Introduction Business organisations across the globe are, to a greater extent, becoming sensitive to their corporate social responsibility (CSR). CSR is a concept that encompasses a number of distinct definitions and components. The definition presented by the European Commission appears to sum up the fundamental aspects of CSR, as the incorporation by business organisations of (Mallin, 2009, p. 9): ...social and environmental concerns in their business operations and in their interaction with their stakeholders on a voluntary basis. Being socially responsible means not only fulfilling legal expectations, but also going beyond compliance and investing ‘more’ into human capital, the environment and the relations with stakeholders. Business organisations that are socially responsible are supposed to incorporate environmental, economic, and social issues into their business operations. According to Deresky (2009), how to carry out business operations in a more socially responsible way in societies where violations of human rights are prevalent, where the environment is being destroyed or where conflict is pervasive, is one of the most difficult issues confronting business organisations nowadays. Although the company may be trying to achieve a justifiable goal, the strategies are not constantly justifiable, and, even if the strategies are justifiable, the consequences of the strategies may still be damaging or detrimental. This paper critically examines the CSR strategies of Del Monte Kenya Limited. The final section provides several recommendations to improve the company’s ethical and environmental credentials. CSR Strategies of Del Monte Kenya Limited How Del Monte Kenya Limited conducts business is justifiable in its dual goals (Bomann-Larsen & Wiggen, 2004, p. 165): (1) to produce first-class and finest pineapples; and (2) to generate profit. The first objective is a way of serving the people and society, and the second is the immediate outcome of any business venture. For its business operations the company requires massive areas of land, it has to boost production by using pesticides, and apparently it demands a huge number of labourers. These strategies are justifiable and needed for the kind of operation under discussion (May, Cheney, & Roper, 2007). However, in the case of Del Monte, not every strategy was really justifiable, and several of its consequences are certainly unfavourable. However, it seems that the company may have exploited the circumstances and allowed these as a way of realising their goals. During the time the company was planning to conduct business in Kenya, the administration was resolutely seeking further investments. The administration was also seeking investments that would be export-based and labour rigorous due to the need to create jobs and generate foreign capital. Hence the government obtained land and rented it to Del Monte (Muthuri & Gilbert, 2011). Farming practices that are dependent on chemicals, like pesticides, are unsafe not just to the labourers and the nearby communities but also to the soil itself, which slowly disintegrates until it becomes infertile. As a result, once in a while the company has to spread out to new lands. The neighbouring areas are inhabited by farmers who have been subsisting there for generations. The government forced these farmers to abandon their lands to make way for Del Monte’s expansion. Since they are left without a choice, these dispossessed farmers will accept any type of job on any condition (Banerjee, 2009). The company might have exploited this condition. Land acquisition per se is an ethical dilemma. What makes it ethical or unethical is the way in which the land is acquired. It is true that business organisations cannot bear complete responsibility for the dispossessed. Nevertheless, if governments wriggle out of its established responsibility to look after the landless, and the companies know this, then companies must consider this (May et al., 2007). Business organisations can somewhat utilise their assets to pay damages without hurting profit margins. The second rule of the UN Global Compact mandates that business organisations should make sure that they are not involved in violations of human rights (Bomann-Larsen & Wiggen, 2004, p. 166). In Kenya, the constitution gives no safeguard against exploitation and, by attempting to take advantage of the ambiguities and weaknesses in Kenya’s constitution, Del Monte can be considered liable. Furthermore, Article 20 of the Universal Declaration of Human Rights verified that the right to association is a fundament human right. In Kenya, the peaceful condition of the industrial sector is rooted in systems that unite the Federation of Kenya Employers, the Central Organisation of Trade Unions, and the government of Kenya as partners (Bomann-Larsen & Wiggen, 2004, p. 169). Any examination of the trade union history in Kenya will verify the origins of exploitive laws and how these laws have been exercised to undermine trade unions. The executive board of Del Monte became overconfident because of the backing or patronage it obtained from the repressive system. Del Monte should have exercised its responsibility to its stakeholders (Robinson, 2010). One may assume that Del Monte would adopt different principles for its business activities in a society where the law is exploitative—and, from the point of view of human rights, unlawful. The local population, particularly the most susceptible ones, must be safeguarded by the company’s rules. However, the most obvious case of adverse consequences brought about by Del Monte’s activities relates to the use of chemicals, more particularly pesticides. To attain the highest level of productive, intensive use of chemicals is needed. But there are other techniques that boost productivity much more than chemicals: prompt harvesting, having confirmed water and nutritional systems, sowing approved seeds, prompt preparation of seed bed, and consolidated pest management techniques, where in pesticides are slightly needed (Bomann-Larsen & Wiggen, 2004, p. 163). The company’s assortment of pesticides causes serious health diseases like cancer, and can also lead to severe poisoning with injury to the nervous system, kidneys, liver, and lungs. At the company, thorough and comprehensive orientation to enlighten labourers about the unsafe nature of chemicals had been negligible and the health safety measures implemented in developed nations had been largely ignored (Werther & Chandler, 2010). Del Monte did not intentionally want to impair or harm its employees, but it did allow them to be impaired due to its inability to give orientation that is compulsory in the safe utilisation of chemicals. Orientation or training involves devoting time, effort, and human capital (May et al., 2007). The company may have failed to recognise this as valuable to its objective of generating profit. The company was supposed to carry out a risk evaluation of pesticide use so as not to aggravate an already unpleasant condition and to avoid and lessen the damaging impacts of the chemicals (International Institute for Environment and Development, 2005). But the company decided to disregard the probable harm to labourers’ wellbeing. Del Monte is also ethically responsible for potential impacts on the wellbeing of future generations. The environmental policies of Kenya are weakly defined, which indicates that any company can easily damage the environment (International Institute for Environment and Development, 2005). Nevertheless, damages to the environment are not essentially associated with the production of pineapple in the same way as it is with, for instance, mining. The damaging outcomes are not unavoidable, for pineapple production can be enhanced through consolidated farming techniques. Hence this is a further case of a company taking advantage of weakly defined laws that facilitate damaging consequences while not doing something to prevent or mitigate them (Bomann-Larsen & Wiggen, 2004, p. 169). The damages that have been wreaked on the land are permanent. In order to reduce damages, Del Monte would have to dedicate time, effort, and resources to alternative farming techniques to attain the preferred outcomes. In addition, health care is insufficient. Health care services in Kenya are very poor, hence whether the workers are employed in Del Monte or not they would still be unable to receive quality health care (Aras & Crowther, 2012). Thus more responsibility on the part of Del Monte is needed. The company cannot be fully forgiven or excused just because it unknowingly expanded its business to a country that ignores its people’s wellbeing. In contrast, in order to show that Del Monte did not invest in Kenya to take advantage of the defective laws of the country, the company should forcefully establish greater standards and values for the benefit of its employees. If offering health care services is needed in order to satisfy the interests of the labourers in a nation like Kenya, the absence of adequate health care may be viewed as a dishonest practice (Hartman, Arnold, & Wokutch, 2003). Furthermore, and more essentially, inasmuch as poor health arises from poor working and housing conditions, they are also a consequence of the practices by which the company works (Bomann-Larsen & Wiggen, 2004, p. 168). Therefore, sufficient health care should be offered in order to mitigate adverse consequences. Moreover, inasmuch as the poor working and housing conditions are dishonest practices, no adverse consequences as regards harm to health condition can actually be allowed. The housing conditions of majority of the employees of Del Monte were very insufficient, and were a strategy to capitalise on the profits of the company. Without a doubt, housing conditions cannot be viewed as a consequence of business operation but, if it is needed to offer housing for employees who are required to reside near the facility, this must be performed in a satisfactory manner (Mullerat & Brennan, 2005). Unfortunately, the company does not plan to invest in housing for fear that its profits will be harmed. A damaging consequence related to housing conditions is the possibility of developing illnesses (Bomann-Larsen & Wiggen, 2004, pp. 167-168). One may think that the company has an ethical liability for this, for it should be aware of the fact that poor housing conditions would obviously bring about health disorders. Ultimately, Del Monte hires employees rigidly in accordance to production needs. There are three job classifications within the company: casual workers, seasonal labourers, and permanent employees (Robinson, 2010). A permanent employee is full time. A seasonal labourer could also be full time, but when there are an insufficient number of tasks the labourer can be discharged. With casual employment, the worker is hired for a brief duration of time (Bomann-Larsen & Wiggen, 2004, pp. 166-167). Permanent employees have the most excellent terms—they have a severance pay, sick pay, holidays, and a contract. Seasonal labourers also have a contract, but their condition is riskier because they do not have severance pay and they are paid less. Casual workers, on the other hand, have no benefits, privileges, and contract. All salaries are according to government policies (Robinson, 2010). Even though Del Monte cannot be charged of violating the rules, the rules as they are abuse the fundamental rights of the workers. Del Monte is obviously gaining from the weak laws of the country and taking little or no steps to mitigate the damaging impacts; it favours the current situation (Maignan, Ferrell, & Hult, 1999). The company must bear the responsibility of considering every stakeholder. This requires giving higher salaries than the minimum established by the government. Numerous of the widely cited business case rationales for CSR crumble in the face of widespread scarcity. It is factual that business organisations that use their resources for the development, education, and wellbeing of their local stakeholders can gain substantially in terms of higher profits, reduced costs, and increased productivity (Rubner, 1990). Nevertheless, according to Deresky (2009), for globally mobile resources there is usually the option of investing in a less demanding or difficult business setting. Del Monte gains from the legal environment of Kenya, weakly defined policies on the use of chemicals, and low wage rates. Insofar as the laws of Kenya are in defiance of international workers’ rights and basic human right, this makes Del Monte an accomplice to the misconduct of the Kenyan officials. Moreover, the company has the capacity to take steps to prevent or mitigate these human rights abuses and thus the moral or ethical obligation to do so. Recommendations There are steps that Del Monte can take in order to become a more socially responsible business organisation. The company, as revealed in the above discussion, is in dire need of precise measures to improve its CSR practices. There are five most appropriate steps that the company may adopt. First, make sure that the business activities of the company are justifiable, with regard to both objectives and strategies. The company must act or behave in such a way that it satisfies the interests of various stakeholders. The business activities should be carried out in a morally, ethically, and legally just way. Second, try to predict the predictable. Carry out investigations or studies on Kenya so as to gain knowledge of or appreciate its economic, political, cultural, and social circumstances and what impacts the company’s activities will generate. Recognise prospective stakeholders. Find out potential adverse impact on stakeholders by carrying out stakeholder-based risk analysis (Werther & Chandler, 2010). Identify and understand possible adverse outcomes by encouraging the participation of stakeholders in the decision-making process. Third, Del Monte should look at its network of partners or collaborators. Connivance can be a consequence on numerous ways. Identify who is benefitted or pleased ethically, politically, or materially by the company’s operations. Fourth, reduce adverse outcomes. If the company is functioning in a government or territory that violates human rights, ensure that the company does not gain from or aggravate the condition. The company should instead pressure government officials to respect basic human rights (Mullerat & Brennan, 2005). If the company should depend on others for the safety of workers and resources, it is important to bear in mind that it is also answerable for its actions. Specify definite and unambiguous policies for how security staff should behave when embodying the company’s interests. Take into consideration the beneficiaries of profits. Insufficient or unsound domestic labour and environmental laws should not be taken advantage for profit (International Institute for Environment and Development, 2005). Establish greater principles for the company and adhere to international norms. And lastly, the company should exercise moral thoughts. It should address the following questions: Are the adverse consequences truly unavoidable, or is there a possibility of finding another direction with little or no damaging outcome? If the detrimental consequences are unavoidable, are they very serious that the business activities cannot convincingly or credibly be defended to those impinged by it? Would it be more socially responsible to give up or pull out from investment? A socially responsible business organisation bears responsibility for the impacts of its business operations on its various stakeholders (Banerjee, 2009). Because a socially responsible or morally reputable business organisation has greater integrity among its stakeholders, integrating this form of CSR guideline at all organisational levels may consequently lead to higher performance or greater success and sustainable relationship with stakeholders. Conclusions National and international organisations in Africa have expressed their aspiration to address the countless issues that cause problems to the region but, in spite of the encouraging efforts initiated by numerous business organisations, a great deal of effort still has to be exerted. Multinational companies, like Del Monte, currently exercise significant social and economic influence, which endows them the privilege to make sure that foreign assistance and tax proceeds are utilised to construct infrastructures that have a favourable effect on economic growth, health, and environment. The business setting is an intricate assortment of legal, moral, and political components, including shifting environments, insecurities, and actual risks. The possibility of adverse consequences is higher in at risk societies, like Kenya, and, thus, the responsibility to prevent or reduce damages is also bigger. Even though the duty to become socially responsible relates evenly to all contexts, how the conditions must be fulfilled will rely on contextual components. This explains why a moral paradigm tackling business issues must be adaptive and resilient to a wide array of problems that necessitate an ethical response from business organisations; basically speaking, a context-based model of corporate social responsibility is integral. References Aras, G. & Crowther, D. (2012) A Handbook of Corporate Governance and Social Responsibility. England: Gower Publishing, Ltd. Banerjee, S.B. (2009) Corporate Social Responsibility: The Good, the Bad and the Ugly. UK: Edward Elgar Publishing. Bomann-Larsen, L. & Wiggen, O. (2004) Responsibility in World Business: Managing Harmful Side-Effects of Corporate Activity. London: United Nations University Press. Deresky, H. (2009) International Management: Managing Across Borders and Cultures. London: Pearson Education. Hartman, P., Arnold, D., & Wokutch, R. (2003) Rising above Sweatshops: Innovative Approaches to Global Labour Challenges. Westport, CT: Praeger. 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