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Management

Making a Case for Corporate Social Responsibility – Carpeteria

Introduction

Corporate Social Responsibility has become an important facet in business activities during the last few decades. However, not all companies have embraced what is known as the ‘triple bottom line’ – Carpeteria included. Therefore, as part of a new initiative, the company will undergo some major changes in the designing and implementation of corporate social responsibility throughout each and every area of the company; from the supply chain to customer relations. The importance of such an initiative, and what it means for company in terms of corporate culture and overall management implementation, is discussed herein.   

Corporate Social Responsibility Explained

The main purpose of corporate social responsibility is to serve society in a positive way in addition to the pursuits of profitability and legislative requirements undertaken by the company. Usually embraced by larger companies, smaller companies have come to understand the importance and benefits of implementing corporate social responsibility initiatives in all parts of business. The main benefits are a result of what is known as the triple bottom line.    

The three points in the triple bottom line are people, planet and profit. Though the traditional type of companies usually were driven by the bottom line, that is profit, the turn to people and the planet as equally important is a realisation that is necessary for every business. People are the company; without any employees, a company cannot function well.

Therefore, employee practices and human resource management should be efficiently and effectively handled in relation to fair labour, recruitment and retention improvements, and similar initiatives. Planet refers to environmental practices and how the company disposes of waste, engages in recycling, and makes the location in which the company operates and even beyond, a better place for future generations and the future of the company as well.

It is important to note that when companies invest in corporate social responsibility; the investment is recovered many times over. This is because the organisation undergoes a change for the better, and driven by this change, the company becomes more profitable and more receptive to customers, employees, stakeholders and stockholders alike.

Therefore, it is necessary for a business to embrace corporate social responsibility, so long as there is a lasting change and the effects of implementation are noticed by all those involved.

Furthermore, corporate social responsibility is not a new concept, although it is a recent move for the company regarding a step in the right direction. Many companies have incorporated corporate social responsibility previously, as seen by our main competitor, Interface.

The main difference between our competitor’s implementation of corporate social responsibility and our own, is that we are undertaking an initiative that will be efficient, effective, and long-term. It will be visible in all parts of the business, and its benefits will assist in making Carpeteria expand and become a pioneer in carpet manufacturing.

Strategy Outline

When outlining the need for corporate social responsibility, the strategy behind this new initiative is five-fold. It requires creating balance, effective management, opportunity identification, development of business practices and organisational capacity.

Contrary to popular belief amongst business managers, corporate social responsibility is not simply an add-on to company objectives. It requires a holistic investment on the part of the company, and only then will it have holistic rewards. Therefore, the first step in using a strategic approach to corporate social responsibility is creating balance; in terms of economic value and societal value.

These are not mutually-exclusive alternatives, and both can be achieved. However, both of these objectives need to be maintained by operating the business with economic value as an underlying purpose, and societal value as a powerful driving force.

The second step is effective management, in regards to business relationships that are of high importance to the company. Usually, there are a few that are not worth retaining if incorporating corporate social responsibility. 

Therefore, it is necessary that those business relationships that do not embrace our new company initiative or refuse to comply with the company’s focus on positive societal impact should be severed from further business dealings. Any individual or business that does not partner with the company on this front is not worth having.

The third step is identification of opportunities, as well as responding to any threats the business may have. In terms of opportunities, there are several avenues that the company can consider when implementing corporate social responsibility initiatives; whether it is investing into community projects, using environmentally-friendly products and services, or spearheading increased corporate quality testing and certification in the manufacturing stages of operation.

The possibilities are endless, and will be covered in context later on. However, there are always some threats to the business, in terms of competition. To prevent our corporate social responsibility initiative being labelled a copycat scheme in opposition of Interface and other related competitors, our company should be able to find ways of differentiating in order to create a lasting competitive advantage, as will be discussed in the corporate culture section.

The fourth step is the development of sustainable business practices. Sustainable refers to long-term changes that can be readily measured and identified by all those involved. These practices should be in the best interests of the company itself and society at large. It is unnecessary to implement changes that are not foreseeable as beneficial for the future. Therefore, all changes should be in line with the direction of the company, the customers we interact with, and the surrounding environment in which we operate.

Lastly, the capacity of the organisation, in regards to engaging in charitable causes, should be considered. Philanthropy is a good part of re-investment into the community, especially for those who need it most.

There are major clients and individual customers who should be rewarded for their loyalty and also their need, and this will be a major driving factor for our philanthropic cause. This will be in addition to any charitable activity that we may be involved with currently, with a focus to expand on this area for the long-term.

Business Implementation

The implementation of corporate social responsibility in regards to the way the business is operated spans a numbers of key stages. Highlighted here are four stages of the corporate social responsibility design and implementation process, including: engagement, conduct, creation and establishment (Maon, Lindgreen and Swaen, 2009).

Stage one requires the engagement of employees to whom corporate social responsibility applies. Since the company is taking a holistic approach to this initiative, all staff will be initiated into the new policies and procedures.

These will also be written into company manuals and documentation. It is also our duty to inform all those who have business relationships with the organisation of any and all changes to our company outlook for the present and the future.

For the conduction of corporate social responsibility training in stage two, both management and employees will be briefed on how the company plans to carry out changes in the workplace, and also the operating environment. This will consist of various informative corporate meetings over the span of a few months, in order to roll out changes efficiently and effectively.

Stage three is the creation of internal and external communication plans. This will consist of improving the consistency between employees who operate out of the office and those who interact directly with customers. In addition, any communication channels that have any inherent issues are to be fixed within a relatively short period of time within the timeframe of the changes being implemented.

For the establishment of mechanisms which allow the business to operate smoothly, there will be improvements to all business divisions, in terms of streamlining processes and introducing the corporate social responsibility initiatives. This will ensure that there are no problems later on when the business is experiencing increased productivity and growth.

In regards to some of the new programmes to be implemented as part of the corporate social responsibility initiative, the manufacturing stage of operation will be improved, in terms of higher safety protocols and quality materials used for customer preferences. This will allow for the company to be at the cutting edge of production and ensures that the amount of hazardous waste is significantly reduced.

The type of carpets and other products used in customer residences or professional locations will be used with respect to any physical allergies or customer preferences. In addition, only environmentally-friendly products and services will be used, to reduce our carbon footprint and improve company image in a professional manner.

Finally, the investment into community endeavours and charitable organisations will ensure that we give back to our clients, employees and societal interests at heart. This will also increase customer loyalty and bring in new clients for the business. Furthermore, it will increase the philanthropic activities that we already have in place, making our reinvestment into the community that much more valuable for the long-term.

 Importance of Stakeholder and Stockholder Perspectives

There is a difference between stakeholder and stockholder perspectives, although both are important to the company. Firstly, the stakeholder sees suppliers, employees, customers, and other societal groups are crucial to the operation and management of the company; whereas the stockholder perspective sees shareholders as the owners of the company, and the chief duty is to look out for their interests and therefore increase their value.

Usually, the company cannot serve competing interests, therefore it is in the best interests of this business to take a stakeholder perspective, for three main reasons. The first reason is that many of the stakeholders have a major influence in the operation of the company, in terms of sustainable growth, profitability and environmental impact. Without stakeholders, there would be no foundation for the business at all, and the owners of the company would be rendered almost useless.

The second reason is that stakeholders support the company physically and financially, in regards to employees and support groups. Therefore, if there was no support base for the company, it would be next to impossible for the business to function efficiently and effectively. These stakeholders are needed for both the short-term and long-term.

The third reason is that the stakeholders are heavily involved in the company’s goals and future. Although owners of the company may change, stakeholders often outlast individuals, and are quite loyal to the business in many respects. It is important to maintain stakeholder ties and give them priority and input in company decisions, since the corporate social responsibility initiative is ultimately for their benefit.

Inadvertently, when stakeholders are valued, the owners of the company will also feel valued, because the company will continue to grow and become more profitable. This will become part of the benefits of corporate social responsibility, as stakeholders will be involved in both the giving and receiving end of the new initiative.

Not only is value maximised, but also employees and support groups will be more motivated to invest their time and effort into the company, not just for the sake of the company, but for their benefit as well. This will add to future benefits, as they will be able to reap the rewards, all in due time.

Most importantly, the company reputation and image will also improve as a result of this stakeholder perspective, due to the implementation of the corporate social responsibility initiative. As there have been some issues with customers in regards to our lack of initiative in this area in the past, our new initiative will be able to meet and possibly exceed their expectations.

All major stakeholders will come to embrace this new change, as it will be beneficial to many, and will spark a positive reciprocity, in terms of improved business relationships. As a result, it will be easier to handle customer relations, and employee satisfaction will be set to increase due to the new initiative.

Corporate Culture Change and Competitive Advantage

When incorporating corporate social responsibility into not only the core functions of the business, but every department, there are major changes that will occur as a result, in terms of the corporate culture of the company.

To ensure that the changes that are made are smooth, and the transition if effective, there are six main guidelines that should be followed as a rule of thumb, which also lead to the company’s competitive advantage.

Firstly, there needs to be a clear vision for the company, in regards to how corporate social responsibility will change our outlook for the future. If there is no vision, there can be no visible changes in the company and the way it runs; therefore, this should be clarified as a sustainable move for the sustainability and improvement of the company for the long-run.

Secondly, senior management should display commitment to the goals of the company, especially the new initiative that requires commitment to societal stakeholders. By ensuring that management hold to and believe that corporate social responsibility being the next step forward for the company, it will provide leadership and direction for the rest of the business as well.

Thirdly, modelling the culture change at all levels of the company is important for the building of trust in the new initiative and rapport among those who are involved in the business process. For this to function efficiently and effectively, the new business practices and policies should be reflected by all those who are part of the company.

Fourthly, the company structure should be modified to reflect the new changes. This also includes the company culture as a whole, which is part of the organisational structure. As this takes time, it also requires the cooperation and effort of employees, management and even the owners of the company. This will be discussed further in the organisational restructuring section.

Fifthly, employee engagement is critical to the company, in order for the corporate changes to be successful. There are many ways to engage employees in transition between corporate cultures and when the change takes place; incentivising employees who encourage others to be involved in the corporate social responsibility initiative, making the workplace more suited towards corporate social responsibility by modifying ergonomic design, and also introducing a reward scheme for customers who refer environmentally-friendly products and services related to the company to new clients.

Finally, corporate social responsibility measures should be launched to make sure that all those involved with the business are aware of the changes, understand them, and take up the responsibility of making the changes last. This will ensure that the corporate culture of corporate social responsibility spreads throughout the whole organisation.

If the corporate culture is valued by those who espouse it, it will be a source of sustained competitive advantage for the business. This will become our driving force for spearheading the new initiative, and will ensure that corporate social responsibility is here to stay. In order to differentiate ourselves from our competitors, the new corporate culture should be rooted and sustained by stakeholders and stockholders alike.

Customer Expectations and Global Market Perceptions

As aforementioned, corporate social responsibility is not a new concept in the business world, as many companies have been engaging and using this facet in different areas of business. However, it has only been widely embraced by most companies in the past few decades, and is certainly the newest initiative in regards to our company moving forward in the direction of sustainable, efficient and effective change in the area of social improvement.

Many of our customers have raised concerns about the lack of sustainable and environmentally-friendly practices in our company, as well as the embracing of the concept of corporate social responsibility by many of our competitors, particularly Interface, which has been experiencing rapid growth in recent times.

However, our company takes corporate social responsibility more seriously than just a concept; it is the new face of our company, it will stand for everything that this company represents, and it is a new initiative for the improvement and sustainable direction of our business.

In particular, customers have questioned our company’s environmental impact, fair wages, community involvement and supply chain activities. As outlined above, the business is moving forward in the right direction regarding all voiced concerns by customers, as we have taken these into account and are implementing new changes.

Therefore, our environmental impact will become positive due to the use of environmentally-friendly products and services; the introduction of incentives for workers who embrace the new corporate social responsibility will be implemented; reinvestment back into community projects will move to the forefront of our initiative; and all suppliers and others involved in the company’s supply chain will be reviewed and monitored for the highest level of quality and the embracing of our new corporate social responsibility’ policies and practices.    

Dynamic interaction between and amongst multiple stakeholders allows for the successful development and dissemination of environmentally sustainable practices (Rusinko, 2010). Therefore, by valuing the stakeholders mentioned earlier, it will be easier to maintain and sustain the changes necessary for corporate social responsibility to take effect in our company for both now and the future. Furthermore, as the carpet industry has taken into consideration such initiatives, it is an important and necessary step for our company to use this new initiative to pave the way for continuous improvement.

On a global scale, corporate social responsibility is having positive effects on all companies involved, especially for those who have realised its value and importance, taking this into account by allowing corporate social responsibility to be the driving force in all areas of the business.

As the push towards globalisation increases, it becomes more and more important for corporate social responsibility to take a central role in the function of a business, especially ours. It has become crucial for companies to endeavour to reduce their carbon footprint, use renewable energy sources, and maintain the competitive edge of green programmes inherent in the business.

            Most companies have embraced corporate social responsibility for three reasons: (1) to increase market potential; (2) creating future opportunities for improvement; and (3) provide products and services that enhance customer service and stakeholder investment. Firstly, tapping into a viable source of sustainability such as corporate social responsibility allows the company to diversify and expand business operations into different avenues, the most obvious being new market niches. With the support of customers and clients, it is possible to increase development into these areas as well as increase profitability simultaneously.

            Secondly, by improving the business processes that are currently in place, it is easier to improve business practices in the future, for the simple reason that change is continuous. By implementing such change, it becomes a socially and culturally viable investment that reaps rewards if correctly implemented. Therefore, the company becomes more sustainable for the long-term.

            Lastly, introducing new and improved products and services to customers and investors allows the company to experiment in more ways than one. By using such test cases and environmentally-friendly initiatives, the general public has come to know the positives and negatives of such a move; and benefits from the former, and limiting the latter.   

As it is expected by the customers and perception is determined by the global marketplace, it becomes that much more important that we as a company are seen to and implement such changes in order to establish our presence in the business environment and increase our social change initiative to become socially and financially stronger.

By doing so, the company will be able to move forward with vision, instead of moving backwards without momentum. It is crucial that we are seen to be doing the right things by stakeholders, and are implementing the correct changes in the company. This will ensure that our company is stepping forward in the right direction. 

Research shows that influence, perception and performance of the organisation rely heavily on the focus of corporate social responsibility (Johnston, Swaen and Lindgreen, 2009). Therefore, it is an important initiative that this company is proud to be making, and one that will not be taken lightly, as it becomes the focus of our business’ function in the marketplace.

Although expectations of the company may change over time, the perception of the company is set to become more positively acquainted with corporate social responsibility on a holistic level. For this to remain a positive change, it will require the support and effort of those both inside and outside the company, which is what the new initiative strives to serve.

Organisational Restructuring

For effective design and implementation of corporate social responsibility throughout the company, it is imperative that the organisation undergoes some critical restructuring for the purposes of efficient and effective functioning in the business environment.

Although the company has been successful in the past, there have been many issues and customer complaints have been increasing to a point where the business is at an impasse: it must change in order to become more sustainable. Therefore, the change from a traditional structure to a flat structure is to be proposed.

Also known as more of a horizontal structure as opposed to a vertical structure, there are many differences to the future model of the organisation in regards to the former. For the most part, the shift from many levels of management to fewer levels of management will allow more autonomy for employees to implement corporate social responsibility at every part of the organisation.

Furthermore, there will be a new division of change management for the purposes of spearheading the new initiatives, with change agents to be mobilised and dispersed throughout the organisation with the responsibility of ensuring that business practices and policies will be smoothly, efficiently and effectively introduced into the business.

The senior management of the company will also be responsible for holding corporate change meetings, as aforementioned, with the highlights of progress for the months and years ahead, with a focus on corporate social responsibility and how it is being embraced throughout the organisation. This will ensure that there is still top direction, but a more bottom-up focus.

This new structure will allow for managers and salespeople to work together on the same level, communicate more effectively, and become more geared toward corporate social responsibility. Understanding that corporate social responsibility challenges the long-established, traditional idea of maximising financial gain alone, and rather turning to positive societal impact, is one that should not be ignored (Carroll and Shabana, 2010).

By streamlining the business process, productivity is set to increase due to the introduction of the new initiative, a more organic corporate culture, and a flat organisational structure. This also removes the threat of a centralised chain of command, as the company wishes to make sure that all those involved in the business are confident that this new direction and vision is in the best interests of the business.

For the company to realise that corporate social responsibility is to be implemented as a core driving force, and not simply as an add-on facet to the business, this organisational restructuring is needed. More importantly, it is completely relevant regarding the current position of the business, and the state of the company is set to rapidly grow and improve once major changes take place.

It should be noted that this organisational restructuring is not to be taken as change for change’s sake. It is an important move that will have an impact throughout the company, in every area we operate, and with all stakeholders involved. Therefore, this move should be taken with all sincerity, focus and effort for those involved in making this initiative work for the improvement of the company. 

As can be seen, an organic culture and a flat organisational model is part of the new initiative to be more flexible in the functioning of our company and more receptive to our stakeholders. To be effective in the business world, we must be efficient as a company. In this way, we will make a positive impact in our environment and on our society. 

Corporate social responsibility benefits the social stakeholders, employees, customers, and the government on the whole (Turker, 2009). Therefore, it is important that this new initiative begins internally and works externally, so that there is an efficient and effective move towards the sustainable future.

Conclusion

 In summary, Carpeteria has faced some challenges in the face of competition and customer feedback. Therefore, it has begun a new initiative to embrace and implement corporate social responsibility in every area of the organisation. As a result, the corporate culture will change to a more organic form, in compliance with the restructuring of the organisation from a traditional model to a flat organisation. This will ensure that all stakeholders will support and sustain the new policies and procedures of the organisation, that environmentally-friendly products and services will be introduced, that philanthropic reinvestment into social causes will increase, and that the staff and customers of our company will be valued in light of our new direction and vision for corporate social responsibility both now and in and the foreseeable future. 

References

Carroll, A. and Shabana, K. (2010). The Business Case for Corporate Social Responsibility: A Review of Concepts, Research and Practice. International Journal of Management Reviews, 12(1), 85-105.

Johnston, W., Swaen, V. and Lindgreen, A. (2009). Corporate Social Responsibility: An Empirical Investigation of U.S. Organizations. Journal of Business Ethics, 85(2), 303-323.

Maon, F., Lindgreen, A., and Swaen, V. (2009). Designing and Implementing Corporate Social Responsibility: An Integrative Framework grounded in Theory and Practice. Journal of Business Ethics, 87(1), 71-89.

Rusinko, C. (2010). Evolution of Environmentally Sustainable Practices: The Case of the US Carpet Industry and CARE. International Journal of Sustainable Economy, 2(3), 258-276.

Turker, D. (2009). Measuring Corporate Social Responsibility: A Scale Development Study. Journal of Business Ethics, 85(4), 411-427.