Corporate social responsibility

Corporate social responsibility is a broad topic that can mean different things to different people and companies.  The idea behind it is that companies should be responsible for more than just making profits, they should be doing some good in their community.  That good can be in many forms including taking care of the environment, giving back to those in need, or many other areas.  EcoVadis is a company that gives out ratings for sustainability.  Each year it gives out awards for sustainable procurement leadership.  I chose two companies that received awards in 2019, Clariant and Henkel (EcoVadis 2019).

                Clariant is a world-wide specialty chemicals company that is headquartered in Switzerland.  They have several CSR programs in a wide array of areas.  They have several programs in place to minimize their impact on the planet.  They spend on programs to advance renewable energy usage.  They use minimally invasive procedures to procure their chemicals from the planet.  They believe in preventing waste more than recycling.  They have sustainability as part of their corporate mission statement.  Their sustainability efforts are put front and center on their webpage along-side their products to advertise the way they do business.  Their main CSR focus on people is to take care of their employees.  A second part of their mission statement is their focused on being a preferred employer.  They spend money on programs to take care of and develop their employees.  They focus on employee development through succession planning, talent management, and annual performance reviews to identify strengths and further develop them.  Considering that they continue to be a profitable company that shows growth, their CSR policies seem to be positively impacting the company (Clariant Ltd. 2019).

                Henkel is a product development company that focuses in three areas: adhesives, beauty, and laundry and home.  They are another company that has many CSR programs over a wide number of platforms.  They have a focus on climate protection as well as sustainable packaging.  They have set a goal of becoming a climate positive company and are committing funds to research and development to achieve the goal.  They also have programs in place to reach their communities not only about Henkel’s initiatives but what the people of the communities can do to help.  They have given over 50,000 employees sustainability training and those employees share with their peers as well as by visiting primary schools to help educate on sustainability.  Henkel has had a positive growth in EBIT over the 5 years showing that its initiatives are having a positive impact (Henkel 2019).

The government’s role in climate change is ever changing.  In the United States the policy changes between President Obama to President Trump have been sweeping.  Many of the restrictions on greenhouse gases and other emissions that were put in place have been rolled back by Trump’s administration.  Many companies were required to put systems in place to reduce emissions in order to stay compliant with the rules put in place during the Obama administration.  There are some companies, including BP, ExxonMobil, and Shell, that are continuing to reduce methane emissions even though the standards were relaxed (Eilperin 2019).  The reason is that the companies understand that the American people are concerned with climate change and they want to be looked at as doing the responsible thing.  Society will eventually pay for these initiatives either through taxes, if governments offer subsidies, or through increased prices for the products and services offered.

I believe becoming climate positive speaks to stakeholders in the community where the company resides, customers, and investors.  The communities will receive the benefits of the positive climate impact, and those communities may offer incentives for companies that prove to be climate positive.  The customers can feel they are apart of something bigger.  Consumers are already becoming more conscientious of the products they buy, if they can feel like the products they purchase are not just less negative but actually positive it will help.  Investors get to have the same feeling.  There money not only offers a return on investment, but it goes to a cause that is benefiting the environment. 

References

Clariant Ltd. (2019). Clariant Specialty Chemicals. Retrieved from https://www.clariant.com/en/Corporate

EcoVadis. (2019). EcoVadis Announces Winners of 2019 Sustainable Procurement Leadership Awards. Business Wire (English). Retrieved from https://search-ebscohost-com.libauth.purdueglobal.edu/login.aspx?direct=true&db=bwh&AN=bizwire.c88292409&site=eds-live

Eilperin, J. (2019). When it comes to acknowledging humans' role in climate change, oil and gas industry lawyer says 'that ship has sailed'. Retrieved from https://www.washingtonpost.com/climate-environment/when-it-comes-to-acknowledging-humans-role-in-climate-change-oil-and-gas-industry-lawyer-says-that-ship-has-sailed/2019/09/26/63c0d250-c9c2-11e9-a4f3-c081a126de70_story.html

Henkel. (2019). Sustainability. Retrieved from https://www.henkel.com/sustainability

UNETHICAL PRACTICES AT BARCLAYS BANK

Unethical Practices at Barclays Bank

         In this case study we have the United States of Justice conducting a criminal investigation into abuse of the LIBOR (London Interbank Offered Rate) interest rate regulated by the British Banker’s Administration. And resulting on a fine of more than $440 million by Unites States and English financial regulatory agencies for manipulating the LIBOR to its advantages, causing world-wide effects to business and individuals. 

Ethical Development Level

In the case of Barclays Bank and the manipulation of the LIBOR (London Interbank Offered Rate). It can easily be determined that the executives of this organization correspond to the Preconventional morality level. “Preconventional morality can be define as the most basic level, is childlike. It is calculating, self-centered, and even selfish, based on what will be immediately punished or rewarded” (Lamb, Hair, & McDaniel, 2014, p.34). The manipulation of the LIBOR interest rates by proposing artificially low bank-to-bank rates to make themselves more stable than they actually were showed that they did not care about anyone else but rewarding themselves.

Corporate Social Responsibility

 “Corporate Social Responsibility: Is the business’s concern for society’s welfare. This concern is demonstrated by managers who consider the best interest of the company and the society within which it operates” (Lamb, Hair, & McDaniel, 2014, p.37). The manipulation of the LIBOR rate Barclays Bank not only affected London banks and business executives, but also small business and individuals like students who have students’ loans, and homeowners, whom interest rates depend on the LIBOR rate since it is use all around the world as an interest rate and a financial instrument benchmark. If Barclay’s bank executives had had any kind of Corporate Social Responsibility they had never manipulated the rate to their best interest without thinking on the bad consequences for the rest of the society.   

Corporate Social Responsibility Response Actions

To take corporate Social Responsibility of their actions after the scandal broke up Barclays bank should of ask a public general apology and offered to compensated the most affected victims of their unethical practices, and compromise to do a clean up of all their unethical executives and make them responsible for their actions. Show society that people have to be responsible and accountable for their actions regardless of the position they held within the organization.

Postconventional Morality

But in the other hand if the executives at Barclays Bank would of stopped and think for a moment if  “Even though manipulating the LIBOR will increase company profits, is it the right thing to do in the long run?” they would of being in the Postconventional morality level. This is the last level of morality that represents the morality of and adult. “At this level, people are less concerned about how others might see them and more concerned about how they see and judge themselves over the long run”(Lamb, Hair, & McDaniel, 2014, p.34). Being at this level show that the organization and the people in it have an excellent ethical and moral integrity.

Ethics and Social Responsibility in Marketing

“Ethics is the moral principle that generally governs the conduct of an individual or a group” (Lamb, Hair, & McDaniel, 2014, p.32). Ethics are the base of a successful long lasting relationship between the organization and their customers since the businesspersons have the obligation to be honest with their customers, they are also responsible for preserving their customers environment and protecting their rights. By doing so they have insured a good long relationship with them and these actions would automatically put them on the philanthropic responsibilities level of the pyramid of Corporate Social Responsibility since they would not only be profitable, obey the law, be ethical, but a good corporate citizen, contributing to the community and improving the quality of life.   

References

Lamb, C. W., Hair, J. F., & McDaniel,

Corporate Social Responsibility and the Future

Corporate social responsibility (CSR) is also known as responsible business, corporate conscience, or corporate citizenship that embodies valuable strategies for the welfare of a society in relation to corporate responsibilities. CSR is the part of a business model that governs the procedure of the self-regulatory policy of a company, and an organization’s business ensures CSR’s compliance with legal, social, and ethical values. Companies have learned from the devastating consequences of corporate social irresponsibility that has made them rational enough to act sensibly not only in the interest of a company but for a society as well.

 The active implementation of CSR has significant effects on the prosperity of a company’s business that ultimately benefits its shareholders. Those organizations which prefer to do social welfare work are able to draw a great number of customers towards their products by establishing a good ethical impression that a society appreciates at large. According to McCoy (1989), ethics should be the central part of a business, and this recognition helps in enhancing the performance of a company. The effective CSR policy ensures the firm position of an organization in the market and has positive effects on the profitability of a business. 

Many people deduce that the future of CSR is quite uncertain as it cannot be implemented effectively in contrast to the interest of shareholders who are not concerned with the non-profitable activities of a company. It is an unreasonable presumption as the policy of CSR is not only constantly penetrating into companies but also assuming a more sound and practical form than ever before due to its importance in today’s world. With the increasing implication of CSR, it can be safely concluded that its prospective growth will not be hampered in any way.

References

McCoy, C. S. (1989). Management of values: The ethical difference in corporate policy and performance. New York: Harper & Row.

Corporate Social Responsibility in Ethics

I think in general society will move in the direction of higher expectations for CSR. However, I also think it will happen unevenly, because society is not homogeneous. Certain states, like California, will put much higher pressure on companies than others. Such parts of the country have moved (and are still moving) toward greater accountability, authenticity, charity, and more company-customer interaction. Other parts of the country might not care so much about CSR as long as the company doesn't outright commit crimes or defraud customers.

The traditional company mindset, which Pearce & Robinson (2013) indicate was single-mindedly focused on stockholders in the past, might stay strongest in more traditional states. Given how polarized the country has become, this difference might only get stronger over time, making local companies more able to get away with questionable practices while national and international companies are held to higher corporate citizenship standards, both by progressive states here and by progressive nations around the world.

References

Pearce, J. A., & Robinson, R. B. (2013). Strategic management: Planning for domestic & global competition. (13th ed.). New York, NY: McGraw-Hill.