Corporate Responsibility describesthe Businesses’ efforts to improve their local and global communities.
Corporate Responsibility commonly knownas Corporate Social Responsibility (CSR) consists of the policies, practicesand initiatives that a company adheres to in order to be honest and transparentwith a positive impact on society and the environment. These policies should bean inseparable component of the service or the product that the company isoffering and these are aimed to ensure that companies stayethical. There are several categories thatbusinesses focus on in Corporate Responsibility – environmental responsibility,philanthropic initiatives, ethical practices and legal and economicresponsibilities are some of them. In today’s modern economy global warming andenvironmental issues are of interests to the public.
Companies should havebusiness models that are considerate of their responsibility to theenvironment. Most companies who practice Corporate Responsibility has adoptedmeasures like energy conservation, minimize waste and increase recycling,control release of chemicals, conserve water that minimizes its impact to thepublic and the environment. Businesses who take steps to reduce pollution tothe environment also benefit as good corporate citizens while contributing tothe society. Philanthropic initiatives comprise of donating money, time andresources to charities and local communities. These donations could be used toaid in health initiatives or assist educational institutions with providinggrants or scholarships. Many companies pledge a certain amount of their yearlyearnings to charitable causes or partner with non-profit organizations.Volunteering is another way of doing good deeds that shows concern for specificissues and support for those organizations.
Studies have shown that volunteeringenhances employee engagement and strengthens relationship among colleagues andincreases employee retention which in turn improves efficiency. Ethicalpractices are also key to any organization as this provides fair laborpractices for the employees and the employees of vendors/suppliers that theyconduct business with. This is key for businesses that operate in internationallocations that has different labor laws. Legal Responsibilities requireorganizations to comply with the laws regulated by the Federal, State and localgovernments under which the business should operate. This also requires thebusinesses to provide goods and services that meet the legal requirements.
Economicresponsibility focuses on the growth of the business to maximize profitabilityand to contribute to the economy. Without producing profitable products andmaintain sustainability a business cannot contribute to the socialresponsibilities. Organizations that aregenuinely committed to CSR have a higher level of employee engagement andbetter customer service.Stakeholders are the people who areinterested in the organization and this includes its employees, customers,suppliers, shareholders, board of directors, political groups, media,government agencies etc. All stakeholders of a business are interested in thevalues and the mission of the company and those organizations that practice SocialResponsibility attract most Stakeholders. Employees want to work for companiesthat care about people, planet and also revenue. Consumers and suppliers arealso interested in businesses that give back to the society. The new generationof buyers demand transparency and always choose a product or brand that issocially conscious.
Investors are more likely to support companies that is notonly committed to its employees but also donates money and encourages employeevolunteering as this shows that the company is not just interested in the profitsbut they are contributing to their local and global community. Media andpolitical groups are also drawn to the organizations that are sociallyresponsible. Stakeholder engagement is essential to businesses as they canbuild relationships with stakeholders to understand their perspective andinterests and include that in the company’s corporate strategy. Stakeholderscould help companies in making informed decisions, avoiding risks and also expandingthe business and brand reputation. Stakeholders are also quite interested inCSR issues when making decisions about investing in companies. Most companiesprovide CSR reports to its stakeholders which is a tool for communicating itssuccess and challenges on all of their socially responsible issues.
The goal of socially responsibleorganizations is to conduct business ethically by focusing on their social,economic and environmental impact and human rights. These organizations areresponsible for their effects on the environment and society based on their CSRinitiatives. Research has shown that organizations that act sociallyresponsible experience high levels of performance. Despite the positivity andoptimism associated with CSR, companies do not always adhere to it. In fact,many companies have adopted CSR as a marketing gimmick. A strong commitment tocorporate responsibility programs can enhance the company’s brand and can helpcreate a positive environment for its employees and its consumers.Florian Nehm, head of corporatesustainability and EU affairs at Axel Springer came across some articles aboutthe devastating circumstances under which some minerals important for theproduction of electronic reading devices like smartphones and tablets wereexcavated in Eastern Congo. Silence and inactivity were not options for FlorianNehm as he was concerned about the future of Axel Springer.
Even though Axelspringer did not produce or purchase the electronic devices, the producers of theelectronic devices were using contested resources. Axel Springer neededauthentic digital devices on which paid content would be offered. This meantthat Axel Springer’s products could also be potentially stigmatized which wouldnegatively affect their digital expansion. Axel springer had faced a similarsituation before the digital era when they were in the printing business. Backthen they took immediate measures to ensure a sustainable source of paper. Sincethey were a direct and major buyer of paper they could influence theirsuppliers and had some power over them. But in this situation Axel Springer didnot directly deal with the sources of the electronic devices.
There are otherfactors like the boundaries of the company’s social obligation and the actionsthat they should take to clean up this issue caused by others. Florian was well aware of the dangers ofdigital media as they used significant amounts of energy and produced largeamounts of emissions. Disposing e-waste was also a major issue as the materialsused in the devices carried a high risk of contamination of the environment. Amongall these issues, the actual sourcing of the minerals needed for the productionof these devices was the major problem.One of the core corporate value atAxel Springer is Integrity, and this is reflected in their commitment to socialand environmental responsibility. Axel springer is known as green and ethicalcompany and their digital business is dependent on conflict minerals. Thecompany is also concerned about journalistic credibility.
Based on all thesefactors, I believe Florian Nehm should not wait till this became a major issueand should present the situation to the CEO, Mathias Döpfner. Together theycould come up with a course of action to tackle this situation. Even thoughthere are ongoing initiatives to stop the flow of conflict minerals fromEastern Congo, those efforts are mostly dominated by political and commercialparties who had more interest in the mineral trade rather than the wellbeing ofpeople and the planet.
Axel Springer being in the investigative media businesscould create more awareness among the public thru their use of media. Theycould also work with their stakeholders, which includes Board of Directors,Shareholders and Government agencies to put in place more controls and auditsfor international trade. Axel springer could require its suppliers who are alsoStakeholders, to disclose the source of the minerals used in their products and,if they were sourced in the Democratic Republic of Congo provide a report ofthe measures that were taken to exercise due diligence on the conflict mineralssource and procurement.