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Corporate responsibility or otherwise referred to as corporate citizenship is the self-regulation that a corporation adopts in it business model. It is its role to therefore ensure it abides by the law, the community's norms, international norms and ethical standards in general. It should ensure it embraces the impact of any actions it partakes in to all stakeholders it undertakes business with, who could include: foremost the environment; bearing in mind we live in a world 'greener' than ever before, consumers, communities, employees, and other members in the general public sphere.
CSR has very many benefits to a business that include:
The costs are reduced and efficiency increased, with the utility bills reduced and efficiency increased the profitability of the company is improved. With a practicable Corporate Social Responsibility policy this is an easy achievement (Mallin, 2009, p.23).
Brand reputation is of great importance to any business .This can be improved by making the Corporate Social Responsibility policy well known and practicable.
Corporate Social Responsibility policy help in improving the management of risks this entails the use of corporate governance procedures whose one great component is such a policy.
Internal and external relationships are also strengthened where a company has a practical Corporate Social Responsibility policy
Corporate Social Responsibility Scandals
A responsible organization recognizes the side-effects its activities which include its products, operations and or its services caused on the parties it covers in its policy. It is its responsibility therefore to contribute to the society it operates. It should carry on its activities appropriately as stipulated in the policy, actions of which should not only be over but also above the compliance with the minimum legal requirement. (Banerjee ,2007, p.43)
A Corporate Social Responsibility policy scandal occurs when a company trashes its policy on the same or does not take the appropriate actions in response to a particular activity. BP for example, experienced a scandal that resulted from irresponsible behavior to an oil catastrophe resulting from an oil spill from an explosion at an offshore drill rig that brought its consumers to protest for the environment was at compromise.
However sometimes something goes terribly wrong and the corporate social responsibility campaign flops before its very face, a company not in compliance with its corporate social responsibility policy signifies one treading down the path of failure at it.
There is a growing public demand for organizations to take into account practicable corporate social responsibility when planning business operations that are socially responsible.
This could result in:
Financial burden in fines
Long-term effects such as brand and reputation degradation.
A multinational corporation can ensure that its CSR policy is not just a theoretical document, but rather a practical means of ensuring the future and safety of the communities in which they are working by the application of quite a few strategies that spawn from the design, the approach and the implementation of the corporate social responsibility policy. (Anderson, 1989, p.26).
The organization can use different approaches in the design o a corporate social responsibility policy that include:
This is especially the case where a multinational that is undertaking business in poor communities. It involves the running of running of projects that improve the lives of the locals. These include the running of water projects, building of schools and hospitals that directly benefit the locals by bringing essential services to the people this builds the communities relationship with the multinational and the businesses they engage in can go on very smoothly. (Mallin,2009, p.77)
Majority of such CSR projects are undertaken in Africa, other examples being adult educational facilities and HIV/AIDS enlightening programs. The Shell Foundation for instance started an Early Learning Center at Flower Valley in South Africa to educate children in the community and for development of skills for adults
Direct incorporation of CSR
Another CSR approach widely adopted is the incorporation of CSR strategies in the multinational's core business strategies, such as in the employment of people from the community it operates in except for a few expatriates that do complex jobs whose skill is not available locally. Some multinationals like this approach as it improves the skills of the community.
Creating Shared Value.
This is the adoption of a principle of interdependence of social welfare and corporate success. The multinational needs an adept government, sustainable resources, and above all a healthy, skilled and educated workforce while on the other hand. A government on the other hand requires businesses such as multinationals to raise revenue from taxes and other charges. The society on the other hand needs thriving businesses that are profitable and also competitive to create income, philanthropy opportunities and tax revenues. (Banerjee, 2007, p.92)
The design of a CSR policy should be guided by quite a number of aspects so as to ensure practicability in the policy. The principles that govern the design of the policy are as:
The policy should respect human rights so as to avoid friction with the law and the community this is especially the case where the activities of the multinational could cause conflict with the communities. A case in point is the Niger Delta where the Royal Dutch Shell and Chevron Corporation faced or still face CSR crises for taking up land belonging to the Ogoni people after they were forced out by the government so they could drill crude. The Royal Dutch has in the past been fined for crimes against humanity.
The CSR policy should be so designed to enhance human capital by creation of employment and encouraging their training and further education.
The CSR policy should cover employees in a manner that no unfair, disciplinary or discriminatory measures are taken against them whenever they report to the management or other relevant authorities, in good faith, practices that encroach company policy or infringe the law. (Paetzold, 2010, p.45)
The CSR policy should not make any demands for exemption from environmental, ecological or any social standards. These issues are bound to cause trouble for the company sooner or later, these are things that affect everyday lives of people around the company.
The policy should uphold a disclosure of information policy that keeps constant CSR communication to the public this ids especially the case where the multinational is building face in a new location or venturing into a new businesses. This is best executed as follows:
Regularly giving information about activities to be undertaken in the near future, the structures of the business and any anticipated or made changes, the financial situation of the company and the business results of the company. Care should however be taken as any misrepresentation of information whether intent or no can have really devastating impacts on the company. A case in point is where Healthsouth, the corporation falsified accounting reports so as to earn a good name. This brought the whole corporation down.
In disclosure very high standards of quality when reporting is required ,the accounts and their audits should be according to the company laws and should conform to the expected standards. (Mallin, 2009, p.85)
Multinationals should adopt an open policy as where the company publishes all the information that pertain the parent company its origins and other basic information that would give the company an open face. The ownership should also be considered with the percentages clearly declared this encourages good faith between the society and the multinational, the affiliates whether direct or indirect and shareholdings among them. (Paetzold, 2010, p.56)
Employment and other social partners:
The CRS of any company should ensure that it respects the International Labor Organization standards, which include the effective forbids child and forced labor, upholds the right of negotiation and collective bargaining, non-discrimination , prevention of sexual exploitation, and so on.
The corporation should ensure its employees are represented in trade unions so as to be compliant to be labor friendly. Employees and social partners are perhaps the trickiest game of balance and should be carefully considered. Child and forced labor should no even be an issue but since multinationals traverse the world it is important to uphold policies against forced and child labor. The policy should not encourage but ban any slight sign of discrimination.
The corporation should encourage effective and widespread collective agreement with the respective stakeholders, this should be clearly appended to the policy.
The company's management should ensure a vis-Ã -vis relationship with the workers or their representatives, this improves the likeability of the corporation and the performance of the employees and therefore the company's profitability.
The policy should lay down a policy to ensure recruitment of local personnel and their training wherever their skills fall short of the expected levels of qualification.
There is a great revolution regarding the preservation o f the environment, any corporation that does not respect the environments bound down and hard. The company especially one engaging in environmentally sensitive business a case in point being the BP oil spill that elicited a lot of commotion and was declared a national disaster.
The company should adopt an environmental management system this should best take care of the events such as those of the oil spill where the disaster could have averted or the effects mitigated.
The multinational should in its policy play big brother and ensure therein provisions meant to raise awareness and provide the public and its employees and the public on the possible effects of its undertaking on the environment inclusive of health and safety.
This can also be enhanced by having a policy that carries a drift on the worst case scenario and a crisis plan so as to avert damage afflicted to the environment and or health. A case in point is the case Royal Dutch Shell faced a big CSR crisis with the Sakhalin Oil disaster.
Over and above all the multinational should train its employees continuously on matters that relate to the environment.
Corruption is a killer of customer social responsibility and could bring even a multinational to its knees. It should therefore be shunned since its potent is beyond imagination .A case in point is the Arthur Andersen that went down with Enron corporation, the partnership went down due to accounting fraud.
To effect this corporate social responsibility policy should ensure that no payment is made to officials or to employees of business partners, management control systems that discourage the culture of bribery and any other forms of corruption should be adopted, this eliminates if not reducing the possibility of going down with the ship of corruption.
The corporate social responsibility should also ensure that no illegal donations to any candidates contesting public office. This insures the company is ridded of dirty smears that could cause corporate social responsibility crises.
The multinationals can improve their corporate social responsibility by improving their products so as to ensure the clients are satisfied with their products. Consumer interests should come to fore in corporate social responsibility since they are a major cause of corporate social responsibility flops.
Ensuring the safety of products is key to a successful corporate social responsibility. If there is something that will jeopardize a multinational's reputation and it's brands it has got to be the safety of its products. A case in point is in 1977 when the Ford Corporation in the production of Ford Pinto, faulty fuel tanks that gave in at the neck of the tank filler causing it to break off, puncturing the fuel tank and leading to deadly fires. This called for recalls that are always costly let alone the tainting of the brand.
Toyota also recently had the same problem marked by brake faults in their vehicles.
The corporation should also ensure there is preciseness and clarity in providing product information this eliminates the possibility of misunderstanding of their products hence protecting customer interests.
The corporation should also ensure that they effectively handle complaints so as to protect customer interests. A desk should be dedicated for customer service. This ensures the corporation gets feedback on what it should or should not do. The policy should accommodate customer's opinions as the are the reason for what they do.
The multinational in a bid to ensure upright CSR should ensure that it does not engage in ant-competitive agreement that paint a bad image on it. This could cause aggression and negative publicity from owners of competing and perhaps smaller businesses that cause make the corporation's operations disadvantaged.
CSR policy is a key issue in the success of a multinational and should been taken into key considerations so as to ensure the products success in the market.