BÀI TẬP LỚN TRÁCH NHIỆM XÃ HỘI CỦA DOANH NGHIỆP

VIETNAM NATIONAL UNIVERSITY UNIVERSITY OF ECONOMICS AND BUSINESS ASSIGNMENT Course: Corporate Social Responsibility Semester (2021-2022) SUPERVISOR: Dr Nguyen Phuong Mai STUDENT: Dinh Huyen My STUDENT CODE: 18050771 CLASS: QH-2018-E QTKD CLC Hanoi, 12/2021 Question (5 marks): Why some firms, industries, and cultures have different CSR thresholds than others? Illustrate your answer with real examples for all three categories (Write a short essay from1500 to 4000 words to answer the question) Answer: The decision of when to implement a CSR policy is compounded by why, where, and how it should be implemented, not to mention who should oversee the process The industry context complicates things further because of the varied stages of acceptance of CSR by different competitors Another level of complexity, differences among countries and cultures, ensures different firms will approach CSR in vastly different ways Although the value of an effective CSR policy within spe- cific industries and firms is becoming increasingly accepted, the point at which such a policy becomes ripe for implementation (or unavoidable to those unconvinced of the benefits) varies Thus, when depends on many factors, which include the CEO’s attitude toward CSR, the firm’s industry and actions of competitors, and the cultural environment in which the firm is operating CSR Threshold determines the timing as to when and where the CSR should be undertaken in the organization The threshold determines whether the organization is ready to pursue the policy or not and thus its implementation The threshold enables the business entity to relate its core business and expectations of the society Different organizations have varied CSR threshold due to the culture of the organization, competition levels in the industry and nature of the services and products offered Implementation of the CSR policy varies from the organization to organization, for instance the current environment and the attitude of top management towards the CSR affects the threshold In most manufacturing firms CSR threshold does not change due to environmental factors like the service industry where the attitude of the top management determines extent of participation in social activities An organization’s CSR Threshold is the point at which they turn their attention towards CSR strategies This tipping point occurs due to many factors, such as acceptance by competitors, management’s attitudes, and the surrounding cultural environment Since these aspects are different within various industries, the CSR threshold will be different from business to business In particular firms, the CEO may have personal intrinsic inclinations to conduct business with a sense of corporate opportunity toward social responsibility This business would, most likely, create CSR policies offensively out of management’s high ethical and social awareness On the other hand, companies that may not be led by such management, would defensively react to the demands of consumers in relation to CSR initiatives for reasons, such as avoiding negative media attention or increasing sales In terms of industries, the consumer’s impression of that industry will dictate the businesses within that category’s CSR threshold Companies that sell products are more apt to have lower tipping points than a service industry This may be in part to the fact that services are generally more difficult to quantify harm in than in malfunction or loss in products Additionally, the expectations of certain cultures can affect the CSR threshold of an organization In developed countries a company’s point can be defined by created laws and regulatory bodies However, in many other parts of the world, CSR can be seen as something that only big business needs to take into consideration While these views are evolving, the resource variation between these two types of cultures still maintain vast differences in when the CSR threshold is met CSR thresholds are highly dependent on multiple different factors For firms their business level strategy has a major impact on when they choose to implement CSR policies The firm’s size and capacity, as well as positioning in the industry dictate their timing for CSR At an industry scale its quite dependent on the nature of said industry Apparel for example opposed to the banking industry has a much lower threshold The culturalthreshold is relative to a culture’s perception of the importance of CSR as well as the development and ability to make changes Walmart's business-level strategy probably raises its CSR Threshold; that is, the firm has more CSR leeway and can “get away with" more because its value proposition is based on a strategy of low cost A Walmart shopper, for example, is unlikely to be surprised to discover that the firm favors products manufactured overseas by low-paid contract employees For a firm like The Body Shop, however, which has built its reputation and customer base largely on the social justice issues it advocates (such as no animal testing and fair trade), the CSR Threshold at which customers, the media, and society react may be much lower Thus, The Body Shop's stakeholders are likely to have a lower tolerance for perceived ethics violations In other words, a Body Shop customer would expect the firm to live by the values that attracted him or her to the store in the first place, which translates into a lower CSR Threshold for the firm One CSR error by The Body Shop, for example, may well be equal, in terms of stakeholder backlash, to multiple CSR oversights by Walmart Products targeted at market segments or niches, such as lifestyle brands, are especially valuable to a firm because they often rest on subjective perceptions tied to shifting social trends, rather than objective price and quality comparisons Customers will pay a greater premium for such products Yet, paradoxically, those able to pay this premium are precisely those with the widest range of alternatives, backed by the resources to make different choices The subjective base on which lifestyle brand allegiance lies, therefore, also presents a danger to the firm Question (5 marks): What is meant by the term “CSR as brand insurance”? Can you give an example of a real firm that has benefited from CSR in this way? Regarding CSR implementation, what additional actions you suggest the chosen firm to strengthen its brand? (Write a short essay from 1500 to 4000 words to answer the question) Answer: CSR as ‘brand insurance’ is needed because even the most prestigious brands have substitutes Do NIKE's shoes the job any better than Adidas'? Is Starbucks' coffee any better quality than the coffee served at Tully's? Would car engines run any less efficiently if, instead of BP's gasoline, they had to run on Shell's? A CSR mindset throughout the organization heightens the brand-user bond, reducing the brand's vulnerability to internal management lapses CSR is needed as a brand insurance because of most of the brands, even highstatus brands, have alternatives The brand-user bond will be strengthened through a CSR mindset and be able to reduce the brand’s vulnerability to internal management lapses It has the ability to give a company credibility if they get in trouble with a legal problem because they can show a good track record when proving themselves as socially responsible Savvy nongovernmental organizations (NGOs) and consumer activists that know how to engage the ‘always-on’ media are able to multiply the impact of CSR lapses Their actions can severely threaten the implicit contract between the brand and its users These groups can carry the threat of conveying detailed and often emotive ‘evidence’ of CSR lapses further and faster than ever before John Passacantando, Executive Director of Greenpeace USA, expresses the new sense among activists of their growing relevance in the global debate: “You have to skip the middleman and find a way to put on pressure that becomes unbearable for these companies Don't just write to your congressman Take it straight to the brand (Gilding, 2001)” The linkage between stakeholders and brands is the purpose of branding As the value of this relationship grows, so does the strategic importance of CSR This simple relationship can be summarized in what we label The Branding Law of Corporate Social Responsibility: “The importance of CSR to any organization is directly related, and rises in proportion, to the value of the firm's global brand.” Executives find it difficult to apply cost–benefit analysis to avoid future problems of uncertain likelihood But these are the ideal conditions for insurance, not an insurance that pays off after a crisis but more like traditional boiler insurance that focuses on preventative protection The reason why firms need CSR is not because they necessarily have a pressing problem at the moment but so that they can avoid (or at least lessen) problems that undermine their brand going forward Simply put, CSR represents conflict prevention and can be thought of as modern day boiler insurance Here we describe how CSR activities can play an important role in the riskmanagement dimension of a firm’s strategy Consider the situation of Mattel in 2007.4 Mattel ‘s CEO, Robert A Eckert, had just learned that it faced the largest toy recall in history, covering some of its most popular product lines These toys were found to contain extremely high levels of lead paint Disclosing the problem and recalling the affected toys would surely be costly to Mattel; however the long-run impact on the profitability of the firm would ultimately depend on the cause that the public and investors ascribed to the problem If they saw the problem as one mainly stemming from Mattel’s negligence in overseeing its Chinese suppliers, there would be serious, long-term consequences If, however, it were seen as merely an “honest mistake”— something that could happen to even a diligent firm—the damage would be much less We shall argue that Mattel’s “reputation,” driven in part by its perception as a “responsible” corporate citizen, will much to drive beliefs about the proximate cause of an adverse event Although adverse events have direct costs in the form of regulation penalties and lawsuits, there are also indirect costs to consider For example, Mattel may have to monitor its input suppliers more carefully and engage in a substantial public relation campaigns to communicate such improvements Being a publicly held company, these expected costs will be (almost) immediately reflected in its stock price Investors will also price in the future expected cost of such adverse event for the firm -their beliefs about the possibility of such events happening again Obviously, investors’ judgment about this risk will be colored by the firm’s reputation before the event Is this an anomaly or is it consistent with a view that Mattel has been rather cavalier in monitoring its suppliers? In short, the degree of price change following the event will be based on the weight investors place on its cause Similarly, regulators have limited resources to investigate adverse events In local law enforcement, the decision to prosecute some crimes and not others is known as “prosecutorial discretion.” In a regulatory setting, a similar principle applies: All things equal, those firms that are thought less likely to have committed negligence as opposed to have experienced bad luck will be pursued less fiercely or not at all One can think of a scale describing the possible causes of an incident The left side of the scale is labeled “bad luck”—the incident was caused by factors largely out of the firm’s control The right side of the scale is labeled “bad management”—the incident was caused by negligence, foolhardy cost-cutting, or some other factor under the control of the firm Where investors and regulators place an event on this scale depends on the firm’s reputation, based on its past actions as a “responsible corporate citizen,” leading up to the event Viewed in this light, expenditures on corporate social responsibility (CSR) can be thought of as an insurance premium In normal times, this simply reflects a pure cost; however, when an incident arises, the firm is insured to the extent that its past CSR activities tip the scale toward bad luck rather than bad management, saving the firm money, avoiding regulatory scrutiny, and preserving the value of its brand That is, CSR provides a contingent benefit Corporate Social Responsibility means that, “a corporation should act in a way that enhances society and its inhabitants and be held accountable for any of its actions that affect people, their communities, and their environment; it implies that harm to people and society should be acknowledged and corrected if at all possible” (Lawrence, A T & Weber, J., p50 para 2) Mattel is a socially responsible corporation according to their 2009 Global Citizen report, Mattel's Corporate Responsibility mission is to “act with integrity in all we to bring the world safe toys that grown-ups trust and children love We are committed to positively impact our people, our products and our planet by playing responsibly This commitment resonates in our actions and through our company values each and every day, as we: Play Fair by continually encouraging the Mattel organization to align decision-making with the company's values Play Together by working with employees, partners, vendors and regulators to bring the world safe toys that grown-ups trust and children love Play to Grow by committing to a sustainable future through efforts to work smarter and reduce our impact on the environment Play with Passion by volunteering in our communities and helping underserved children experience the joy of play” (Mattel, Inc., 2014) Furthermore, Mattel has always listened to its stakeholders and encouraged open and mutually transparent dialogue “Stakeholders are all those who affect, or are affected by, the actions of the firm” (Lawrence, A T & Weber, J p21) Mattel’s communication with its stakeholders and its management of the public relations crisis not only greatly impacted the recall outcomes but showed socially responsible and ethical corporate behavior In order to ensure the safety of children’s toy’s I believe that toy companies, the CPSC, and the government should work together to develop a plan Us Senator, Dick Dubin is calling for stricter government regulations for recalls on defective toys In an interview Durbin says, “When defective toys are found we don’t have the laws to enforce it The law requires the commission and the company responsible to negotiate and have conversations about next steps before a press release is issued to the public This problem is that these negotiations can take months” (Reuters, 2007) Not having these regulations in place could lead to injury or possibly death The Us Consumer Product Safety Commission (CPSC) is also calling for new testing standards to test toys before they are imported from other countries Mattel’s Global Product Integrity team is engaged to ensure that products meet or exceed our standards and specifications They have also added new requirements to our processes and dedicated more resources to improve product quality and safety Mattel takes pride in its integrity, safety and quality of their toys Mattel also designs its toys to meet or exceed applicable safety standards wherever they are sold Which includes; the evaluation and careful selection of materials and components to create engaging toys that are durable and safe; all while working to comply with each country’s unique regulations (Mattel Inc., GCR, 2009, p15) In my experience the collaborative accountability model has always been an effective way to ensure not only are standards adhered to but that the rules will be enforced Currently, stricter government regulation and enforcement of prompt communication between the responsible parties are being considered Toy companies believe they are making toys safe by testing the toys and keeping products out of the supply chain that may compromise their safety They have a mandatory program that includes testing, standard procedures for verifying products conformed to the US safety standards In addition to developing testing methods, and working with the government to implement legislation Consumer advocates should continue to build trusting relationships with the consumer since the consumer isn’t able to trust the toy industry or the government to keep children safe In addition to mandating federal regulations and inspections to keep children’s toys safe Other stakeholders like children’s product retailers who also want stronger safety measures should continue to advocate for enforcement of federal regulations; a stronger consumer product safety commission; a better production code stamping of products and packaging to easily trace safety issues when they occur and finally an improved recall systems The best way to protect children from harmful toys in the future is to exactly what Mattel has outlined in their third Global Citizenship Report in 2009 The report covered everything from the evolution of the company between 2007-2008, including the formation of a Corporate Responsibility organization that reports directly to the CEO, who says, “We believe that making Corporate Responsibility an independent function will ensure greater accountability and oversight of our product quality, social compliance and environmental commitments.” (Mattel Inc., GCR, 2009, p8) The organization was formed to ensure accountability and oversight of product quality, social compliance and environmental commitments Mattel also announced a threepoint plan This plan aims to tighten Mattel’s control of production, discover and prevent the unauthorized use of subcontractors, and test the products itself rather than depending on contractors As a result of the release of the 2009 report, Mattel has received several honors including being listed at the top 10 of the “100 Best Corporate Citizens”; ranked one of 10 the “World’s Most Ethical Companies”; and has been named for the second consecutive year to Fortune Magazine’s list of the “100 Best Companies to Work For” In my opinion, Mattel’s reputation was quickly repaired due to how the company responded to its market and non market stockholders Their handling of the crisis and subsequent issues following the 2009 recall and the establishment of a new corporate responsibility organization will continue to keep them on top as a global leader Mattel is hard at work restoring goodwill and faith in its brands, even as it continues to be plagued with residual distrust over the lead paint nightmare Reputations are hard won and easily lost, but Mattel appears to be steadfast in its commitment to restoring its reputation 11 REFERENCES Associated Press (2007) Mattel CEO admits it could have done better job NBCNews.com Retrieved from: http://www.nbcnews.com/id/20738314/ns/business-consumer_news/t/mattelceo-admits-it-could-have-done-better-job/#.UyiTt6hdU1M Dill, K (2014) The Top Companies For Culture And Values Retrieved from Forbes: http://www.forbes.com/sites/kathryndill/2014/08/22/the-top-companies-forculture-and- values/#6cf87a593797 Mattel, Inc (2009) Global Citizenship Report (GCR) 3rd Ed Retrieved from http://corporate.mattel.com/about-us/2009GCReport.pdf Mattel, Inc (2014) Playing Responsibly Retrieved from https://corporate.mattel.com/about-us/corporate-responsibility.aspx Reuters (2007, Aug 14) Mattel recalls more Chinese-made toys Retrieved from http://youtu.be/hrb3CMFVeDM Thottam, J (2007, Sept) Why Mattel Apologized to China Time Retrieved from http://content.time.com/time/business/article/0,8599,1664428,00.html Thorne, D., Fraedrich, J., Ferrell, O.C., and Jackson, J (2011) Mattel Responds to Ethical Challenges Daniels Fund Ethics Initiative, University of New Mexico Retrieved from http://danielsethics.mgt.unm.edu 12 ... industries, and cultures have different CSR thresholds than others? Illustrate your answer with real examples for all three categories (Write a short essay from1500 to 4000 words to answer the question)... timing for CSR At an industry scale its quite dependent on the nature of said industry Apparel for example opposed to the banking industry has a much lower threshold The culturalthreshold is relative... with" more because its value proposition is based on a strategy of low cost A Walmart shopper, for example, is unlikely to be surprised to discover that the firm favors products manufactured overseas