Corporate, Social and Environmental Responsibility: Making Best Use of Current Technology (3,674 words)
Introduction
Globalization of both the economy and the society has confronted the world over the past decade. Increased market competition identifies continuous adjustment and improvement in the production lines of countries to recognize the participation of smaller units of the society. The introduction of the new division of international labor calls for evaluation and reorganization of the business operations as well as a reassessment of the governing economic policies of a country. As such, a shift of focus and interest from the local market to the international setting has demanded innovation not just in corporate leadership as new information; forms of communication and technology are being offered to be utilized in encouraging and reinforcing interaction among individuals.
A good business strategy makes it a point to integrate and harmonize the goals, policies and actions of the organization into a tactical coherence in order to ensure and guarantee the success in the industry. The integration of the conservative and traditional management practices was observed in the ever-increasing complexity of the business environment. The technological advancements that characterizes the information era at present paved the way to the efficient conceptualization of more creative and effective business frameworks which when utilized by business companies will open more possibilities and better position in the competitive atmosphere in the industry.
The concept of endogenous economic development highlights a country’s need to allow change and make room for the growth of its production system by developing and utilizing the potential of local resources through the investment of private firms and holdings as well as of the government itself through national economic policies. But maximizing the potential of a country’s resources means direct impact on the environment. As such, companies at present are governed and guided by corporate responsibility measures and statement as dictated by national policy in order to ensure that sustainable development in all aspect of the country is ensured. This paper presents discussions on the role of multi-national corporations in realizing global environmental sustainability as part of their corporate social responsibility through the available technologies at present.
Environmental Issues
Having claimed that previous researches have lacked in discussing the effects on firm performance of “Best Practices” of environmental management which supposedly enable firms to simultaneously protect the environment and reduce costs, (2000) made use of the resource-based perspective of the firm in analyzing if complementary assets are required to gain cost advantage from implementing best practices. The study included completed surveys on 88 chemical companies which indicated that the capabilities for process innovation and implementation are complementary assets moderating the relationship between best practices and cost advantage which is a one of the important determinants of firm performance.
The findings of the study indicated that the competitive effects of environmental strategies differ across firms with certain characteristics, thereby suggesting that future studies should analyze the environmental in the broader context of firms’ existing resources and capabilities as well as their existing business strategies. As such, this may lead to differing normative implications on the design and implementation of environmental strategies. Moreover, the researcher suggested studies on the analysis of failed environmental practices that were implemented by business organizations in order to be environmentally competitive focusing on their resources and capabilities in order to provide insights on the underlying context of such incapacity as well as to identify the barriers and constraints in firms’ drive to create environmentally sound competitive advantage (2000).
The importance of firms’ capabilities for process innovation and implementation to complement the best practices and cost-reduction objectives of the organizations is a great possibility since varying environmental practices requires different complementary assets. As such, before deciding on specific environmental strategies to be implemented firms should be able to discern and identify the capabilities of their inherent resources to conceptualize suitable and appropriate environmental strategies. Identifying the business strategies of the business first is recommended in order to come up with the most strategic environmental strategy that will create competitive advantage to the business organization (2000).
Meanwhile, (1998) examined the appropriateness as well as effectiveness of ISO 14001 as an environmental strategy among industries that seek to turn their waste into environmentally helpful forms. As such, the authors examined the promises of ISO 14001 through critical evaluation of the advantages as well as disadvantages of the said standard. AS&C was the company used to complete the academic investigation of the standard in order to come up with sound recommendations pertaining to the implementation and employment of the ISO 14001. According to (1998) ISO 14001 is most frequently implemented because of (1) the intrinsic worth of the management system proposed by the standard follows the principles of rigor, follow-up, effectiveness to name a few; (2) the standard’s better control of the human resource of the business organization which includes eliciting greater compliance with work procedures and instructions; and finally (3) the socio-economic spin offs of implementing the new standard such as an active approach to customers’ future requirements.
It was interesting noted; however, that very few participant managers of the study mentioned that ISO 14001 certification could lead to improvements in terms of environmental quality. The study likewise pointed out that the fact that ISO 14001 provides a universal model for environmental management made some managers believe and perceive that the standard also poses drawbacks in its implementation. These include apprehensions on (1) the effectiveness of achieving the fundamental purpose of any green effort which is reducing waste discharge into the natural environment; (2) the promise that the standard will generate measurable improvements in the environmental quality; (3) the system does not set ceilings or any mandatory targets as it focuses highly on the means making “environmental performance” ambiguous; (4) contradictions between the standard and the modern management trends as it adheres to the traditional management principles; (5) increased bureaucracy and lack of employee involvement and consultation when it comes to environmental issues; and (6) the cost and constraints dictated by the implementation of the standard and the certification process which include audit costs, allotted time for documentation, and efforts to comply with the specifications of the letter like training and communication.
In this light, (1998) recommended that before implementing the ISO 14001 environmental strategy, companies need to (1) take time familiarizing with the standard, (2) assess the organizations’ needs, (3) evaluate the appropriateness of the standard with their management philosophies, (4) evaluate the difference between the current EMS and the standard’s system before certification processes, (5) consult with and involve personnel during all stages of system development, (6) participation of the upper management in the system development as leaders and policy-makers of the organization, (7) integrating the standard’s requirements with the needs of the company, and (8) avoiding duplication of management systems since the ISO series have the tendency to overlap with each other. The authors further emphasized that ISO 14001 is a toll and not the end of increasing environmental quality encouraging organizations that implement the standard to be more result-driven (1998).
Sustainable Development
Prior to the common use of the term sustainable industries, the terms sustainable economy and sustainable development were common. Their popularization started with the United Nations Conference for Environment and Development (the Earth Summit) in 1992. The conference was prompted by the report Our Common Future (1987, World Commission on Environment and Development, also known as the Brundtland Commission), which called for strategies to reinforce efforts to encourage sustainable and environmentally sound development. A series of seven United Nation conferences followed on environment and development. They coined the most broadly used definition of sustainable development as, development that meets the needs of the present without compromising the ability of future generations to meet their own needs ( 1996).
Sustainable development demands that we search for ways of living, working and being that allow all people of the world to guide vigorous, satisfying, and economically safe lives without destroying the environment and without endangering the potential interests of people and the planet. It requires an understanding that operating has consequences and that we must find inventive ways to change institutional structures and influence individual behavior. Merely it is about taking action, changing policy and practice at all levels, from the individual to the international (1997).
Sustainable development is an economic state where the demands placed upon the environment by people and commerce can be met without reducing the capacity of the environment to provide for future generations (1994). As an economic, social, and ecological concept, it is intended to be a means of configuring civilization and human activity so that society and its members are able to meet their needs and express their greatest potential in the present, while preserving biodiversity and natural ecosystems, and planning and acting for the ability to maintain these ideals indefinitely (1997). In this regard, the success of growth and progress in a particular country can only be realized through sustainable development which involves every level of organization, from the local neighborhood to the entire globe.
Sustainable development is often depicted schematically using three circles for the target dimensions of environment, economy and society, to which are added the time and north-south dimensions. The diagram illustrates that: Economic, social and environmental processes are interlinked. Public and private agents alike cannot be permitted to act one-dimensionally and in isolation. Instead, their actions must take into account the interplay between the three dimensions of environment, economy and society ( 1996). It goes beyond environmental conservation. In order to satisfy our material and immaterial needs, we require economic prosperity and solidarity in our society. The implications for the future of the actions of today must be factored in (the intergenerational aspect) so that future generations are also able to satisfy their needs (1997). Moreover, sustainable development calls for long-term structural change in our economic and social systems, with the aim of reducing the consumption of the environment and resources to a permanently affordable level, while maintaining economic output potential and social cohesion (1997).
Corporate Responsibility
The business environment has long been characterized with complex interrelationships among and between companies belonging to the same industry. With the internationalization trend in the business community in different countries all over the world, the observing good ethical practices is paramount to every business transaction and deals in successfully operating in the global market. The trust, honesty, responsibility, integrity and accountability between transacting business firms and organizations are values which serve as the key foundation of gaining credibility and good position in the international arena. Hence, standardization of the code of ethics in the corporate world was realized and enacted through the legalization and enforcement of laws and policies that will protect the interests of business establishments. Such legal move resulted to the proper attitude and behavior among business organizations with business transactions thereby decreasing the number of business-related cases filed.
Corporate social responsibility can be defined as the duty of organizations to conduct their business in a manner that respects the rights of individuals and promotes human welfare (1985). While the level of social responsibility exhibited by multinational corporations is said to be improving, perfection has hardly been attained. Governments and people around the world seem to have an increasing interest in scrutinizing the actions of global corporations, in effect forcing international companies to be good corporate citizens.
According to Mohr (1996), corporate responsibility is supported by the concepts of multidimensional definitions and social marketing. In the multidimensional definitions concept, the focus is on the major responsibilities expected from companies. These major responsibilities include economic, legal, ethical and philanthropic dimensions (1991). These responsibilities must be performed in order to benefit not only the company operators but also their employees, customers, the community and the general public. (1991) notes that the social marketing concept of corporate responsibility stresses that company should operate in a way that maintains or enhances the well-being of its customers as well as its society.
Social responsibility in business has been debated for a long time, and several sides of the issue have been presented by ethicists. This debate has been extended in recent years to include the operations of multinational companies. Thus, it is important to view some of the changes in the attitudes and behaviors of multinational companies and their perceptions of corporate social responsibility in light of the evolving nature and composition of global competition ( 1970).
Business culture has turned its focus when the businesses penetrate globally. There had been dispute, argument, confusion and debate towards the subject “social responsibility” in business arena. Many believed that it is a tool to change the business set up to promote a more well working environment. However, there are also cynical about the existence of social responsibility and its role in managing the business. Even so in history, the topic of social responsibility has received so much attention when it first came into popularity in the developed world. It became controversial because of its inconsistencies with the free enterprise system. However, whenever we view today’s scenario, there are indications that social responsibility has become an obligation for any business, and that it is permanent fixture on the corporate business scene (1999).
According to (2005), a country’s system of corporate governance comprises the formal and informal rules, accepted practices and enforcement mechanisms, public and private, which together govern the relationships between people who effectively control corporations on one hand, and all other who may invest resources in companies located in the country, on the other. They emphasized that well-governed companies with actively traded shares should be able to raise funds from non-controlling investors at significantly lower cost than poorly governed companies; because of the greater risk premium such potential investors can be expected to demand for investing – if they accept to invest at all – in less governed companies.
For instance, (2006) found significant evidence that economically interdependent countries follow similar corporate governance laws and policies that protect the stakeholders on the companies. However, there is no relationship between corporate governance practices and globalization although globalization may have induced the standardization of corporate governance across countries but which does not necessarily imply implementation.
Moreover, complete convergence to single corporate governance has been impossible as evident in the number of deviations implemented by different business organizations originating from different countries. The diverse cultural orientation and cultural values among different business institutions like\wise may have contributed to the number of corporate governance that are practiced respectively by organizations. This is reflective in the differing legal systems of the countries that incorporate different corporate laws and policies. Those business organizations that illustrated similar corporate governance approaches as evident in their laws and policies are characterized with similar geographic location as well as cultural orientation. The study deepened the academic investigation by delving into the comparisons between countries, industries as well as firms ( 2006).
Anglo American Plc and the SHE Committee
Anglo American Plc is a mining company that is considered as the global leader in the industry. Its main products include diamonds, platinum, goal, coal, industrial minerals as well as base and ferrous metals. As a global leader, Anglo American operates extensively in a number of foreign sites including Europe, Australasia, North and South America as well as Africa. The company believes that it has a strong commitment towards sustainable development and that the business is helpful in alleviating worldwide issues such as poverty. Furthermore, the company is aware that it has a major responsibility towards the community, considering that the mining business ca cause disruptive effects on people. Thus, the company developed an approach for addressing ethical issues; this approach is contained in the company’s Good Citizenship: Our Business Principles framework (2001).
In this framework, one of the important ethical issues covered is the aspects on safety, health and environment. Based on the Safety, Health and Environment Report ( 2001) of the company, each of these aspects have distinct aims. For the safety and health aspect, the aims include the prevention or reduction of work-related injuries and health problems of the contractors and employees and the provision of effort to address major community health issues. In the environmental factor, the aims of the company include the conservation of natural resources, prevention or reduction of negative impacts brought about by the company’s operations, demonstration of active land stewardship and biodiversity, promotion of good local community relations and the respect towards the communities’ heritage and culture.
In addition to these developed aims, the company also established the Safety, Health and Environment (SHE) Committee. This company committee is in charge of policy frameworks and safety guidelines in relation to health and environmental management. Moreover, this committee is also responsible of ensuring that all company efforts done for the promotion of these aspects are implemented appropriately. This Anglo American department works constantly in evaluating these efforts and recommending ways on how these can be improved. Specifically, the impact of the company’s mining activities on land, water and air are all monitored accurately by this committee ( 2001). This committee also assesses the company’s level of compliance to its developed aims for the safety, health and environmental factors.
The U.S. Rubber Recycling Inc
Perhaps the most unexpected benefit of the tire recycling process is ironically in its waste to energy utilization. August 1999, State of Ohio officials could see that they must take action. From the state capital in Columbus, one could see the smoke from a tire dump fire burning more than 60 miles to the northwest. Whole tires and rough tire chips are used at cement kilns, pulp and paper mills, power plants, waste-to-energy plants and industrial boilers. In 2000, approximately 47 percent of the 273 million scrap tires generated in the United States were burned for fuel. It also follows the Environmental Protection Agency (EPA) guidelines; that call for the clean disposal and non-emission of toxic fumes during the incineration process, which was followed (1994). From the state capital in Columbus, one could see the smoke from a tire dump fire burning more than 60 miles to the northwest. The environmentalists finally clamored for laws to prohibit the pollution-creating incineration of tires. They finally outlawed the incineration process in favor of utilizing safe alternative means to recycle rubber (1994).
U.S. Rubber Recycling Inc. is recognized as the premier resource for tire tiles of all types and the staff has over four decades of experience in rubber recycling. U.S. Rubber Recycling Inc. has both the experience and the expertise to continually develop new products that provide design flexibility hitherto unavailable in tire tile. Rubber from scrap tires is a waste material that is ideal for use in landscaping applications. By using recycled rubber products, landscapers can create cost-effective, high-quality, and environmentally beneficial projects. Aside from the company’s recycling technology to make use of waste rubber tires, the firm likewise ventured into the potential of landscaping market using scrap tires (1999).
The landscaping market is potentially large enough to recover all the scrap tires that are currently discarded in landfills or tire piles. Furthermore, landscaping applications could be modified to include playground surfaces, paving athletic stadiums etc. Other benefits from using recycled rubber in landscaping projects include project cost savings, and improved product performance and safety. Greenhouse gas and public health benefits result from diverting tires from landfills and tire piles. Using ground rubber in landscaping applications results in significant cost savings from decreased project maintenance and from the benefits related to improved product performance (e.g. safety and/or suitability). Additional benefits from using ground rubber in landscaping applications include benefits related to avoided disposal – space savings (landfill space, land space), reduced risks to human health from tire piles, and avoided emissions from tire pile fires (1999). All these were ventured into by the company in its contribution to environmental sustainable development.
Conclusion
In this respect, it is illustrated that businesses from different countries do not show the same level of dedication to being perceived as socially responsible.
Moreover, it is also attested that firms across countries have variety of principles, processes and stakeholder issues to express that they are responsibly committed. People expect firms not only to perform the traditional function of providing goods and services to all citizens who are willing to pay for them, but also to help society solve its problems. If these things are generally seen as desirable, and the firm does them, then it is socially responsible. If the firm does not, then some people may feel it is irresponsible.
Moreover, incorporating and promoting increased public participation in dealing with plans and projects toward progress and development illustrates an efficient and effective measure to achieve more possible success of economic and social growth. Since the public is the foremost concern of every institutional and national improvement, it is very logical that public consultation will be highly incorporated as inputs to come up with sound policies that will reflect the preferences and general welfare of the society. Public participation will ensure developments that are in synch with the needs of the society and at the same time increase the likelihood of long-term and continuous growth for the whole country.
Even though the issue is tackled in its complexity, it is no doubt that social responsibility has to play a great role in today’s business world. It may either contribute to efficiency, effectiveness, success or failure. What is important is that we are becoming more aware each day. No doubt that in this era, social responsibility should become every business’ obligation. Hence, addressing real environmental issues is not yet late through the use of the new technological innovations that serve the interest of sustainable development as companies at present are continuously equipped with ways to adhere to corporate, social and environmental responsibilities.
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