The Impact Of Corporate Social Responsibility In Business Marketing Essay

Introduction

Corporate social responsibility as a term first came in common in the late 1960s, when multinational corporations included the term shareholders. Social responsibility in corporations is titled in aim to aid an organisation’s mission, to guide to what the company stands for and to uphold its customers. So, it is obvious that corporate social responsibility has an internal and external nature. The aim of the corporation is to keep its employees satisfied by providing working assets, as well as to protect the society. The general idea of CSR is related to four aspects, economic, legal, ethical and philanthropic. By staying on these a firm can be able to monitor and ensure its active compliance. Those responsibilities are required from the society. In simple words, the economic responsibility emphasizes that a business needs to be properly functioned. The legal responsibility means that each firm requires abiding the law, and not participating in illegal strategies. Then, ethical responsibility obliges the corporations do the right in aim to be a legal framework. Lastly, philanthropic responsibility determines the love of the fellow human. So, philanthropic responsibility describes actions that improve the life quality either of employees or of the society in general. However, CSR meets also some limitations, as it does not sufficiently focus on the problems which accrue when responsibilities are in disagreement. Moreover, globalization is an issue for corporate social responsibility, since in different countries, is complex to apply identical theories of CSR. The Europe and the United States of America have completely different culture and standard of living-working than the Asia. In particular, in Eastern Europe there are high official standards for workers and social protection. For example, there are laws that protect working mothers, offering two years of paid maternity leave. On the other hand, in China the government sets fees that working women with already one kid need to pay in order to have a second child. Also, China’s government places boundaries on the privileges of employees, such as the right to Freedom of Association. Freedom of Association represents the right to come together with other individuals and cooperatively express, support, pursue and protect common interests. In Uzbekistan the government did shut down the schools and force kids to pick cotton in the fields. Another example is that in Kenya statistics show that every job in the garment sector generates five other jobs. Fashion products in Africa provide key opportunities of improvement to local communities. Thus, it is noticeable that every country perceives in a different way the right and wrong of business operation.

As an outcome in different countries there are various aspects that concern its society. That’s the reason why corporate social responsibility apart from the business ethics needs also to adapt each different culture, in order to have a successful result. Business ethics is the claim of business activities, situations, and decisions which address the issues of right and wrong. Therefore, a company should demand and maintain the highest ethical standards in carrying out its business activities. The reputation of the firm and the trust of those with whom it deals have a fundamental importance for company’s success. To be more specific, business ethics describe the relations with customers, employees, shareholders-investors, suppliers, government, and last relations with competitors. Thus, the company should provide products and services of good value, quality, and safety.

The firm’s accounting statements need to be true and timely along with shareholder’s interest must be protected. Also, for having a fair relation with employees, the enterprise needs to provide secure jobs, health insurance and well fair payments. Relationships based on mutual trust must be developed between the company and the suppliers in order to have reasonable terms of trade. Talking on relations between the firm and the government, each company should seek to be a good corporate citizen, and an environmental friendly enterprise. As well as, the company must record and report all transactions and not knowingly evade tax obligations. Last, are the competitors, the companies must compete honestly, without damaging the reputation of competitors either directly or by implication. Hence, when a company operates needs to be intact, fair-haired and philanthropic responsible.

Consequently, coming to an ethical conclusion in business situations is far more complex than in most of the situations where as a private individual is needed to make ethical decisions. In commerce these decisions must be based on a systematic, rational and widely understandable argument so that they can be adequately explained and justified to relevant stakeholders. This is the point where normative ethical theories come into surface. By the term normative, is meant a method to prescribe the morally correct way of acting. So, normative ethical theories are the rules and principles that agree on right and wrong for a given situation. These theories are divided in two different positions, the absolutism and the relativism. Before define those two categories is a necessity to specify the term of morality, as it’s relevant to those theories. Morality is characterized by the norms, values and beliefs in social processes, which can define right and wrong for an individual or a community in general. Therefore, the ethical absolutism states that there are eternal and universally practicable moral principles. As a consequence, right and wrong are impartial qualities that can be reasonably determined. On the other hand, ethical relativism claims that the morals are subjective. Then, it is simply depends on the person and the culture. The latter theory is the most well-known and occurs mostly in international business issues, such as fashion industries.

Fashion Industry

Corporate social responsibility as it referred above is often about making certain the processes and resources we use are ethical and that do not have any negatively impact on the social environment. Fashion is positioned as a leader on affecting the environment, by sourcing high quality natural materials at a low cost. This signifies that a lot of sourcing is done from Third World countries, where resources and labour costs are lower than in the developed world. By itself this means that CSR implies a lot for fashion, because it suggests the difference between producing fair trade clothing and ethical fashion to simply producing cheap clothes at whether environmental or human cost.

Specifically, ethical fashion symbolizes a methodology to the design, fabrication and sourcing of clothing which as a rule turns into maximizing people’s benefits and minimizing the impact on the environment. In contrast of theory, corporations and especially fashion industries do not operate so ethically in real life. A decade after sweatshop labour (1999-2009) became a mainstream issue, and after many companies have required monitoring to their supply chains, the problem still exists. Many popular fashion brands such as GAP, H&M, Zara and Levi’s which operate in factories in Cambodia, pay poverty wages and lead their workers to malnutrition. Evidence shows that even if the minimum monthly wage for workers in Cambodian is sixty-one USD, a living wage is four times this amount. The ninety percent (90%) of the workers are women, aged 18-35, who might have children and families. They can’t provide to their family, cloths, food, education, healthcare, and even housing. So, as a result hundreds of workers pass out due to exhaustion. Studies demonstrate that in 2011 over two thousands four hundred (2,400) workers fainted due to overwork and poverty. Moreover, companies such as NEXT, Ralph Lauren, and DKNY are on the list of brands contracted with Asian factories, which are responsible for shocking working conditions. In spite of the low wages, in these factories, managers set targets impossible to achieve. Thus, employees are imposed to work over-time, over fourty(40) hours overtime per week, and not paid well. Also, employment is becoming unsafe as more workers are put on temporary contracts and day labour. As a consequence, employers avoid paying holiday or sick payments.

In many factories except for the payments plus the working conditions are unhealthy and inhuman. There are sweatshops, which often produce sandblasting jeans for big and small companies. Sandblasting is a technique used to give to denim a worn and faded effect. Although, it is noticeable that sandblasting in these clothes is achieved with the wrong method. Since, companies do not want to spend money on buying laser machines specialised on sandblasting, they impose people work under terrible conditions. The practice of sandblasting involve firing high pressure sand at jeans, which creates a dust that gathers in the lung, so eventually this is causing a fatal disease, known as silicosis. For example, in Turkey (2004) there are evidences of fourty-six (46) people who worked in those sweatshops and in few years they get sick and dead due to this practice. All these former sandblasting operators had contracted silicosis, after working eleven (11) hours per day in the chocking atmosphere. Hopefully, the government of Turkey five years later (2009) banned sandblasting workshops. Nevertheless, the problem is not solved yet as the sandblasting sweatshops moved from Turkey to other countries such as Egypt, India, China and Pakistan. Some well-known cloth brands turn in to public the issue of sandblasting in order to avoid the maintenance of this horrible method. Versace and Gucci are two brands that concerned a public ban on the practice. On the other hand, Dolce & Gabbana, Roberto Cavalli, and Armani continue to have in their garment production sandblasted jeans. Some other alternative methods which will help the surcease of sandblasting are that companies communicate their policy and awareness on sandblasting method and help by giving medical insurance to the people who already are exposed in to the risk of silicosis.

Another limitation of fashion industries’ CSR mostly in the Asia is kids labour. As it is positioned above, in Uzbekistan the government shut down schools in order to force children as young as seven years old to pick up cotton, for no financial reward. Moreover, kids who do not succeed to pick their target of cotton, they are punished with detentions and they are threatened that their grades are going to decrease. Those who refuse to participate in cottons harvest, government punish them with full academic expulsion. Nike is a well-known athletic company which has been accused of using child labour too. Back in 1990’s it came to surface that in Nike’s supply chain there were factories in Pakistan which had children as workers. Those kids sometimes are abused from managers. In particular young children state that they have worked for many hours; they were so tired so they felt sick; and they don’t get paid. These are unacceptable working conditions, especially for young children, who they suppose to play and go to school. Maybe that is the reason why Nike in 1992 introduced a supplier code of conduct and started monitoring the factories. Although the working conditions remained the core issue, Nike also concerned about adopting a sustainability strategy. For example Chang Sing Inc, the largest supplier of Nike adopted lean manufacturing and healthy human resource management which has increased plant productivity. The firm receives about five hundred thousand (500,000) improving suggestions from workers each year and as an outcome have succeeded to save two million dollars in only one year.

As well, there are other companies that try to include into their supply chain and production, only ethical business. By respecting the environment and human rights many firms stay profitable and sustainable. An interesting example is TOM’S, a shoe company founded back in 2006 by Blake Mycoskie. He was motivated by a trip to Argentina, where he faced extreme poverty and health conditions, as well as children walking and playing without shoes. That is when he decided to create a company producing espadrille for the U.S market. He had a simple goal, just to show how all people together, can create a better tomorrow by taking kind-hearted action today. This compassionate idea was the beginning of a profitable and successful firm. TOM’S is a company aware of imperative need of a company’s responsible operation. Thus, it tries to integrate sustainable and responsible practices into every step of fabrication. Corporate Responsibility at TOM’S firm provides focus at the environment as well as at the social impacts of products. These espadrilles include natural hemp, organic cotton or recycled polyester. Also, all the shoe boxes are made from eighty per-cent (80%) recycled post-consumer waste and are printed with soy link. Moreover, in their giving report it is stated that there are shoes made in China, Argentina and Ethiopia. So, in order to ensure that corporate social responsibilities are upheld, qualified staff monitors the suppliers and vendors. This is achieved either by personal oversee or by certificates which ensure that the used raw materials are produced in accordance with all applicable laws. Another paradigm of CSR is also TOM’S flagship store, which is developed in Southern California. Company’s team works hard to combine environmentally friendly practices into the built environment and into its day-to-day operation. In addition, the main purpose of this firm was giving back to the community. That is exactly the reason why TOM’S customers have the honour of putting new shoes on kids feet in every pair they purchase (One-for-One). Despite the society TOM’S company is also concerned about its employees. In the internal view of TOM’S corporate social responsibility, potential workers are trained about human trafficking and slavery prevention. The company provide to its employees benefits such as health insurance, medical and dental care, fitness classes as well as paid time off.

Furthermore, Katharine Hamnett is a designer who used to have big success in fashion world. Although one day, after research, she discovered that her fashion industry was responsible for an environmental nightmare. Since that moment, she felt moral imperative to do a change. Thus, Katherine Hamnett introduce to her customers the re-launched men’s and women’s clothing, which include re-issued eighties fashion slogan t-shirts (no more fashion victims, save the future, save the sea, and choose life). The raw material of t-shirts is only organic cotton, available from selected retailers worldwide, corresponding to the highest ethical and environmental standards in the world. She has also signed a deal to do fair and green clothing with Tesco supermarket because they agreed to sign contracts with the farmers who are helping environment. From now on the only concern of Katherine Hamnett is to contribute to the society by using environmental friendly resources and by promoting social responsible slogans.

More than a decade ago, Marks & Spencer, a British retailer began its supply chain responsibility programme in order to control reputational risks arising from sweatshop campaigns. Thus, in 2007 as the company wanted to differentiate itself from other competitors raised the bar on sustainability. That’s the reason why Marks & Spencer launched the Plan A, a motivated set of one hundred (100) commitments to dramatically enhance the company’s sustainability operation within five years (2012). The company has already met sixty (60) of the original promises, so now intends to extend Plan A to cover one hundred eighty (180) commitments so as to become the world’s most sustainable major retailer. Two-thirds of the commitments are related to supply chain operation. For example, working with Brandix, a clothing supplier in Sri Lanka helped to establish a role model ecofactory. This action assisted to identify simple ways to cut energy costs across the supply chain. By 2015, Marks & Spencer want to reduce their energy usage by ten percent (10%). Also, the company has an agriculture programme which aims to aid farmers to manage fuel, electricity and fertilisers more efficiently. Apart from the environment the UK retailer pledged to facilitate clothing suppliers to pay a fair living wage in India, Sri Lanka, and Bangladesh by improving productivity at the same time.

Accordingly, many fashion brands are now aware of operating under a strategy characterized by corporate social responsibility. Levi’s, Gap, and Timberland, are some of the thirteen companies which approached Business for Social Responsibility, a non-profit consulting organisation in the US in order to develop an industry-wide monitoring framework for textile and fabric suppliers. They conclude to a common set of principles and monitoring approach.

Concerned all the above, it’s obvious that at the present time, numerous companies seek to increase their social responsibility. As we noticed earlier, fashion industries did not care about their supply chain as long as they stayed profitable. They did not examine if there was any child labour, unhealthy working conditions, and unfair wages. Subsequently some scandals came into surface and that made business worry about their workers, environment and society in general. For instance, all the companies referred above seek to turn their attention to production factories in order to discover the working environment and operation in general. As it stated before, some of those firms have established a legislation of principles, in order to force their supply chain’ factories follow their philosophy. Hence, alarmed by this crucial situation, it is clear that both customers and brands need to change the way they accomplish fashion. First, brands need to develop strategies in order to increase wages in their supplier base. Second, they should accept an increase of the cost they pay to suppliers, in aim to ensure that a living wage can be paid out of factories. Third, they have to involve in their supplier audits local trade unions, with the intention of knowing the local cost of living. Final, brands ought to work with companies and governments on a national level to develop strategies to raise wages, and ensure working conditions. Thus, those are the key trends that fashion industry companies currently adopt in order to contribute to the community and demonstrate their corporate conscience. Alternatively, customers need to consider twice before they purchase garments. Nowadays, people are realizing that the way we consume decides the future of the planet. It is a necessity to be aware of the materials a cloth is produced, the used techniques and the working conditions. Relating to raw materials, it is valuable for buyers to check the nature of materials a cloth consists of. Organic cotton, for example, is a green solution and a cheap material too. The used techniques must be environmental and human friendly. Making polyester (from petrochemicals) needs to waste large amounts of water for cooling, beside the lubricants which can become a source of contamination. Another evidence of wrong used techniques and staple materials is viscose, made from wood pulp. It seems more environmental related than the others, although often the tree planted is eucalyptus, which draws up unusual amounts of water. Plus in order to have the final step of viscose hazardous chemical techniques are also required. It is easy for someone to realise that people are not oblige to know all these details about the resources and the operation of a firm. If fashion industries and governments enlighten the assets of corporate responsibility, people will care and adjust their consuming behaviour.

Conclusion

An African proverb states that: “If you want to go fast, go alone. If you want to go far, go together.”

From this statement, it is clear that if companies want to become profitable in only a few years, it requires that they need to operate with carelessness. On the other hand, if a company wants to be sustainable through its fair operation can be as well profitable by respecting the society. It is moral that people do actions that do not affect others. Therefore, it is understandable that firms should run following the business ethics, in order to esteem the humans, and the environment. Talking about fashion industries, a good suggestion might be to examine their supply chain factories. To be more specific, they need to find out the working conditions, employees need to work in a clean environment with appropriate safety and health conditions. Eco-factories are an innovative trend in nowadays social responsibility, which gives the opportunity to a firm have its employees satisfied by protecting the environment at the same time. Also, they need to concern if there are young children who work in any factories. Most of those kids are forced to leave their school and to work unwillingly. Their position is to play with other peers and go to school in aim to educate themselves. Another question for companies is to discover if the employees are paid a fair living wage. Sometimes, big firms need to decrease their profits in order to contribute to an adequate payroll. An additional concern might be that in the supply chain there is going to be a fair-trade. It is clear that its company needs to make money and be successful, although in some situations is moral to think the others too. As a result, each company which takes place from production to the final stop of sales needs to gain money by adhering to a fair-minded method. Ecological raw materials are also a good direction for enterprises to look for. By a superior quality of raw materials customers will be satisfied and company will be social responsible. One more suggestion could be that companies should do recycling and use recycled products. For example, shopping bags can be from recycled paper or cleavable plastic.

Nevertheless, we should not forget that the term of business is related to the term of profit. In such changing and challenging time we live, in the middle of a worldwide economic crisis, many companies around the globe are facing a major challenge; they need to enhance their image in order to convince customers to purchase their products. As a consequence, firms operate by following social responsibility strategies as well as business ethics. Due to economic crisis, people want to know that big, robust companies help the society. By contributing and acting rational, makes everyone thinks that you are living in a fair world. Morality is one of life’s assets. Thus, it is childish not to admit that all of us have the aim to live in a reasonable society. Moreover, due to globalisation there is plethora of products ready to be consumed. That is exactly the reason why companies pursue a more competitive advantage in order to add extra value to their products to exceed their competitors. At the same time, clients apart from fulfilling their needs, they also examine through their purchase to contribute to the general public. Customers often prefer to pay more, if they feel that their money will go to a good purpose. For example, an ordinary espadrille costs about forty UK pounds (40 £) but a TOM’S pair of shoe costs double price (80 £). Through this CSR strategy, the company acquires loyal customers. In addition, it is vital an enterprise look after its employees too. If a firm provides to its workers a promising working environment, by offering some extra benefits such as health insurance for the whole family, salary bonus, and events in and out the working environment, it is inevitable that they will increase their productivity. The staff of the company feels pleased as well as becomes bonded with the firm, so they ought to exchange this treatment, by producing more and working harder. Plus, employees require gaining a living wage, and treating merit. All the above contribute to a more competitive and profitable company, where shareholders, customers and employees are meted with their requirements. Conclude with, the sustainable responsible business is more than presenting a kind and social image. It is a necessary action today in order to ensure a better future, for next generations.