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How Being Socially Responsible Can Benefit Corporations

Overview (Short Version)

Corporations need to change how they do business. They must transform their operations to be more socially responsible, including being “green” or sustainable in their operations. There are a number of advantages for corporations:

  • Improve attraction of new employees
  • Improve retention of employees
  • Improve motivation and work performance of employees
  • Lowered costs
  • Increased innovation
  • Reduced organizational risks

Why to these advantages exist for organizations which have corporate social responsibility (CSR) programs?

Millennials and Gen Z people (born between early 1980s – early 2000s) have different work preferences compared to previous generations of workers. Organizations must adapt to meet these changing demands from younger generations.

What can organizations do, and how do they do it?

Rather than taking simplistic approaches to CSR  (such as trying to reduce photocopy paper use, turning off lights, or having simplistic community fund raising activities, organizations should focus on the larger picture by:

  • Don’t just look at your own departments; rather, look at all your supply chain partners. Only do business with partners who operate in sustainable ways. For example, the City of Regina could exert tremendous influence by only choosing business partners who have sustainable operations.
  • Transdisciplinary engineering involves making products in a way so that the entire life cycle of a product is considered when trying to be sustainable. For example, computers and all their components would be designed in a way so that nothing is discarded without being reused or recycled.
  • Use a “Creating Shared Value” (CSV) approach. A corporation of other entity could create an interdisciplinary council that ensures the interests of all the stakeholders of a company’s operations are considered and dealt with.

What Can the Public Do to Encourage Companies and Society to Change

Consumers can:

  • Buy less; buy second hand, fix things, re-purpose items. Every time a product is made it requires resources. Get off the consumer bandwagon that says you must look good by buying something new.
  • Make your own items if possible
  • Only patronize companies that operate in sustainable manners
  • Be true to your own values. Change happens because individuals make choices according to their values; don’t work for a company that violates your own values of sustainability.
  • Tell governments and corporations that you expect them to implement sustainable supply chains and put profits second behind sustainability.

How Corporations Can Get Value from CSR/ “Green” Programs (Medium Length Version)

Following are excerpts of a paper I wrote recently. In this paper I wrote about how human resource development practices of corporations can support sustainable operations, thereby giving corporations a strategic advantage over competitors. Human resource development (HRD) includes everything from training individuals, improving work performance of workgroups, to improving organizational processes and performance at an organizational level. In short, HRD is about finding ways to enable people to work effectively together in work groups, organizations, and communities.

Various researchers in the field of HRD have discussed that organizations can gain a number of advantages by “going green” or having corporate social responsibility (CSR) programs. (Green programs are considered to be a sub-type of CSR programs.)

Spector (2013) states that companies can gain a number of advantages by going green such as increased innovation, lowered costs, reduced organizational risks, improved recruitment, improved employee motivation, and market differentiation. Spector (2013) says that going green is about more than simply complying with regulations. Rather, going green will involve transforming how corporations are designed, and how they operate. This involves change management. Consequently, since change is one of the three pillars of strategic HRD (SHRD) (Gilley and Maycunich Gilley, 2003) there is a clear role for SHRD professionals to help transform companies to become environmentally sustainable. However, what does it mean for HRD professionals to be engaging in sustainable development?

As discussed in Fien, Goldney & Murphy (2009), there are a number of perspectives regarding how sustainable development should be defined. In an attempt to bridge the different perspectives, Fien et al. (2009) provide two principles that can be used to think about sustainable development. First, is the promotion of understanding of the environmental problems, their origin in the growth models that assume unending resources (which in fact do have finite limitations), and the need for businesses to transition to sustainable growth models. Second, is the idea that society must transition to a holistic view in which the various business and social actors in society are seen as interdependent connected participants in a global system. These two principles can guide HRD professionals as they develop, implement, and evaluate HRD programs. The authors suggest that thinking and living in an environmentally sustainable way requires a change in how we think of our place in the world, and interact with the world. They argue that we must adopt a systems view, and avoid seeing ourselves as apart from nature – a view which in the past has resulted in people thinking of the environment as something which can be manipulated and used to produce desired results. Rather, they argue, humans are inextricably connected with the environment, are constantly affected by the environment, and cause impact on the environment (Fien et al., 2009). The authors therefore, argue that a key undertaking by HRD professionals is to ensure an increasing number of people understand how connected humans are to their environment, and that a transition is enabled regarding how businesses operate. HRD professionals have a role to play in promoting such increased understanding among employees as well as society at large in order to support a transition as discussed by Fien et al. (2009).

In fact, during the past decade an increasing number of organizations have been undertaking CSR programs, including various green initiatives. Baric (2017) conducted a review of literature between 2005 – 2016 regarding CSR programs, stakeholder theory, and information-communication technologies. He concluded that CSR programs had evolved during that time from being viewed as a potentially burdensome undertaking that corporations only reluctantly undertook to being viewed as an undertaking which is critical to an organization’s success. He concluded that as companies increasingly are globalized the number of stakeholders increases, and CSR programs provide a way of addressing varied interests of these stakeholders, companies use CSR programs to differentiate themselves from competitors for their stakeholders thereby gaining competitive advantages for themselves.

Collier and Esteban (2007) discuss that corporations are organized so that external risks created by business operations are borne by societal stakeholders. Whereas individual countries may have legal frameworks which can address the cost of risks created by corporations, the increasing globalization has resulted in risks being transferred externally to society. This is because, in 2007 at the time of their article, (Collier and Esteban, 2007) there was no global international legal framework which held corporations accountable for their “external” risks such as various negative environmental consequences. Three years later, in 2010, the ISO 26000 framework was released to provide an international guiding framework for corporations to engage in environmentally sustainable development practices (Wikipedia, 2019). A 2015 study (Toppinen, Virtanen, Mayer, and Tuppura, 2015) examining the sustainable development practices among a number of global forestry companies found that the majority of the companies had already changed their practices in accordance with what was suggested by the ISO 26000 framework. The authors therefore concluded that the framework was unlikely to provide added value, at least in the forestry sector, because the companies had already changed their practices prior to the introduction of the framework. Since there is no legal requirement for complying with the framework, and there are no penalties, it is interesting to note that many corporations examined by Toppinen et al. (2015) chose to engage in the sustainable practices as suggested by the framework. What motivated them to change? What advantages did they see to engaging in sustainable practices?

How Corporate Social Responsibility Programs Can Benefit Organizations

            The motivation for companies to go green can vary. For example, a 2009 study (Bern et al. 2009) found that in the USA three reasons motivated companies to become more environmentally sustainable: government regulations, consumer preferences, and employee preferences. Spector (2013) states that while in the USA government regulations are the primary motivator for companies to change, in Europe customer preferences are the primary motivator for going green. Awareness of such international differences is of strategic value for globally operating businesses, and therefore, HRD professionals would be involved in designing, implementing, HRD programs accordingly.

            Another significant change with which organizations must contend arises out of demographic trends. In this case demographic trends refers to the increasing number of millennials and generation Z (Gen Z) people entering the workforce. Wieland and Nair (2016) found that millennials (those people who were born between 1980 and 1999) have different preferences than the baby boomers (those people born between 1945 and 1964). The baby boomer generation were generally accustomed to working in organizations where rules of the organization were followed and workers were expected to leave family and other personal concerns behind. However, millennials have entirely different expectations. Companies which don’t adjust to these different expectations will have difficult times attracting people from a shrinking supply of workers. According to Wieland and Nair (2016), the expectations millennials have of companies include

  • wanting work-life balance in addition to earning money;
  • being able to acknowledge them as individuals who are valued (by peers, supervisors, and the organization); and
  • work values must be congruent with their personal values.

Wieland and Nair (2016) summarize various research that discusses the expectations of millennials. In order to attract millennials a company must

  • demonstrate ethical practice;
  • demonstrate social responsibility;
  • demonstrate social engagement; and
  • create work conditions that enable flexibility (for workers) and provide a way that workers can feel fulfilled by their jobs.

Millennials want to know they are making a positive difference in the world somehow, according to Wieland and Nair (2016), and they want to do it in a way that satisfies their personal value system (concern for family, social well-being, and the environment).

Wieland and Nair (2016) discuss a number of ways in which CSR affects recruitment. For example, Wieland and Nair (2016) discuss that knowledge workers need to be dealt with differently than unskilled laborers, even if both categories of employees are millennials. This is because research by a number of scholars (Alvesson, 2000; Flood et al. 2001; cited in Wieland and Nair, 2016, p. 1074) has shown knowledge workers expect their values to be met through their work, they expect to have flexibility, and they expect to be able to use their creativity. Therefore, Wieland and Nair (2016) say organizations must address these requirements of knowledge workers if they wish to attract, retain, and engage this type of worker.

            Wieland and Nair (2016) also discuss that people have become fed up with various business scandals, and that there is a backlash resulting from a society that emphasizes continuous consumption. One result they note is that people react positively to the authenticity of leaders and organizational practices. An organization’s perceived authenticity is also relevant to labor markets because workers who bring their own personal values to work will find themselves conflicted if a corporation demands that work be performed in a manner which is somehow incongruent with the personal values of the workers. This will affect attraction, hiring, and retention, as well as motivation. Therefore, an organization’s CSR programs that address strategic objectives such as recruitment in order to help organizations achieve their strategic objectives in an authentic and congruent manner.

            It is critical that CSR programs be seen as authentic and not just a quick fix to appease some inconvenient voices. Care in designing and implementing CSR programs affects employees’ judgements about the authenticity of corporate CSR programs. The authenticity of an organization’s CSR  program affects employee commitment, and thereby the productivity that an organization can achieve is impacted (Lee and Yoon, 2018). Furthermore, Collier and Esteban (2007) review literature that shows employees’ commitment toward, and participation in, organizational ethical and CSR objectives depends on three factors. The first factor is the extent to which employees derive their identity from being a part of an organization. Employees will identify with and adopt organizational characteristics as part of their own identities if the employees find those organizational characteristics to be attractive and congruent with their own values (Collier and Esteban, 2007). The second factor is employees’ perceptions about justice and fairness in the organization. Organizations with a high degree of procedural justice internally, and organizations where violators are held to account will result in a high degree of commitment toward, and participation in, ethical and CSR programming (Collier and Esteban, 2007). In fact, the authors point out that when low levels of procedural justice and low levels of accountability are present, the research shows it is more likely that unethical conduct will occur. The third factor affecting participation in CSR programs is the degree of ethical leadership demonstrated unequivocally by senior leadership in an organization (Collier and Esteban, 2007). As a result, it is clear that HRD professionals have a role to play to support the design, implementation, and evaluation of CSR programs. Attending to the evidence about commitment toward CSR objectives (Collier and Esteban, 2007; Lee and Yoon, 2018) will ensure that employees will be optimally committed and engaged in CSR initiatives, which in turn will influence perceptions of authenticity and congruence by potential future employees (Wieland and Nair, 2016).

            Practical Real World Applications of CSR/ Green HRD

So far we have seen reasons provided by various scholars regarding why corporations might want to consider to become more green, and in particular how HRD could assist in this transformation. Next some examples will be discussed that show what some corporations have done to become more environmentally sustainable.

One method is supply chain management. As globalization has increased the supply chains have become global in nature. Managing the supply chains for efficiency and consistency provides improvements in profits. HRD professionals are key resources to assist in strategic planning, creating corporate cultures, creating performance management systems, developing accountability systems, recruiting, and other organization development and performance programs.

Green supply chain management is an approach that concerns itself with more than just profit motivation of corporations. A green supply chain management approach looks also at how products or services can be provided in a sustainable way. For example, Canciglieri Junior, Reche, and Esterilio (2018) discuss literature about product development which is linked to green supply chain management. In this approach decisions about product development are made in conjunction with selecting suppliers so that environmental sustainability is emphasized throughout various processes involved in developing products in a green way.

Wognum and Bremmers (2009) discuss environmentally sustainable supply chain management in the food industry. They argue that the food supply chain has to become more transparent, not only to demonstrate food safety, but also environmental sustainability in order to ensure consumer trust and confidence in food products. By demonstrating care of the environment in a transparent manner the value of the food supply chain is increased. In Europe legislation was enacted in 2002 which requires, among other things, traceability of all parts of the food supply chain. However, the authors state that full traceability does not exist, and that there is a lack of standardization and consistency with regard to traceability (Wognum and Bremmers (2009). Full traceability increases costs due to the necessity of using additional technology, and modifying various processes, and such costs are not easily transferred to consumers (Wognum and Bremmers, 2009). The authors stated that as of the time of writing their article only certain high value specialty products or products with small supply chains had full traceability. Creating full traceability produces a competitive advantage, according to Wognum and Bremmers (2009). The authors point to organic products which tout their supply chain traceability with respect to environmental impact as a way to differentiate themselves from other products, addressing the interests of a particular market segment.

To achieve full traceability all the stakeholders in the supply chain must each be able to individually demonstrate their environmental concern, and these stakeholders must be able to act in concert with each other to ensure the entire supply chain is conveying a coherent message about its environmental sustainability (Wognum and Bremmers, 2009).

An example of a sustainable supply chain management process is provided by Spector (2013) who discusses the process McDonalds created. To become more green, McDonalds created the Supply Chain Working Group in 2006 to transform not only itself, but also its supply chain partners. The joint objective was to be more environmentally sustainable in their operations and products they each provided in the supply chain. This transformation was achieved without sacrificing corporate profits (Spector, 2013).

These examples of green supply chain management show how a corporation can achieve environmentally sustainable operations by viewing its operations in a larger context which goes beyond the boundaries of any single company. Several scholars have discussed that, in fact, to become environmentally sustainable organizations must take a broader view that focuses not only on their own operations, but they must also look at the operations of their partners and other stakeholders. One such approach is called transdisciplinary engineering (TE) (ISTE, 2019), also known as concurrent engineering (CE) (Peruzzini, Pelliccari, Bil, Stjepandic, and Wognum, 2018). TE is concerned with considering all phases of a product’s lifecycle, including consideration of the extended networks of entities involved in the creation of the products, and also considering environmental impacts throughout the entire lifecycle of the product. The TE approach attempts to increase effectiveness and efficiency, and to reduce loss and errors throughout the entire product lifecycle. This approach is transdisciplinary and acknowledges that no single field of knowledge can solve complex problems that are increasingly global in nature (Peruzzini, Pelliccari, Bil, Stjepandic, and Wognum, 2018 p. v).

A related concept called industrial symbiosis is discussed by Scafa, Marconi, and Germani (2018). These authors state that linear models of economic development have become obsolete and that economies should be thought of as “circular economies” (p. 1184). In a circular economy the use of resources is maximized and waste is ideally zero. To accomplish this stakeholders must work together in planning their operations and working effectively together as one large ecosystem (Scafa et al., 2018). Large scale implementations of a TE or circular economy approach requires not just planning, but also change management and organization development programs. These are the purview of HRD professionals.

Finally, an approach called “creating shared value” (CSV) is described by Bee, Diby, Mbacke, and Wettstein, (2015). The authors describe how Nestle, an internationally operating company created a CSV council to manage and ensure the security of environmental, social, and economic interests for Nestle and its various stakeholders such as suppliers and communities in which they operate. The CSV council consists of external experts in fields such as corporate strategy, nutrition, water and rural development. Through this council Nestle attempts to devise strategies which provide corporate benefits and also benefits to other stakeholders, including communities in which they operate, or to which they market their products. According to the authors the CSV approach was developed by Harvard Professors Michael Porter and Mark Kramer as a way of making a company competitive over the long term (Bee, Diby, Mbacke, and Wettstein, 2015). A detailed discussion of how Nestle operationalized the CSV approach is found in Bee et al. (2015).

            In considering these three approaches it is important to notice that to differentiate between the approaches one must attend to public statements by company officials as well as written organizational policy statements so that one can infer which approach has been adopted by a particular company. As noted above, behavior and statements by executives and managers which are incongruent and which appear to be inauthentic can result in decreased employee engagement and productivity. Therefore, a company which claims to be environmentally conscientious, but which is shown to be careless for the sake of achieving profits, resulting in oil spills might experience a drop in employee morale, engagement, and productivity; it might also experience difficulty attracting and retaining employees. Such an effect might become even more critical for a company which relies on contingent employees.

Wieland and Nair (2016) also discuss that the decreasing number of full-time permanent jobs is putting particular stresses on organizations, impacting their ability to perform. Whereas full-time employees tend to form relationships with one another which enable trust to build, part-time and temporary positions preclude trusting relationships to be formed. Wieland and Nair (2016) emphasize that under these conditions where social networks founded on trust are not formed it becomes even more important that organizations provide strong value-based leadership. For example, he says, if a company manages to attract and hire people through advertisements of strong values such as social and environmental issues, or work-life balance, but the organization fails to deliver, then workers will leave. This will result in an additional cost of having to hire new staff repeatedly. Again, the failure of leadership to be role models for an authentic people orientation, or to provide structure that creates a value-based culture congruent with the employees’ values will result in higher turnover rates. These strategic issues are critical to organizations’ performance, and they can be addressed by HRD programs.

The urgency of addressing environmental sustainability has increased according to Anderson (2009). He says that during the industrial era much of the impact from industrial activities could be addressed and regulated within national boundaries. However, increasing globalization and the transition to a post-industrial society has changed who can impact climate change. The resulting environmental impacts from a post-industrial society have meant that no single nation can address environmental sustainability on its own. Transnational corporations with complex global supply chains have created a situation where a global response is required (Anderson, 2009). The author points out that current development practices are no longer sustainable, and in fact we may have passed the threshold of recovery form environmental damage perpetrated by global business practices. Therefore, a different business paradigm is required (Anderson, 2009).

Referring to Giddens (1994), Anderson (2009) argues that it is the emphasis on what Giddens (1994) called “Productivism” that has led us, in part, to our current situation. Anderson (2009) argues that a change is required. According to Giddens (1994) productivism refers to when personal growth and development have been replaced by the primacy of achieving economic wealth and benefit by way of full-time paid employment. Productivism, argues Giddens (1994), is the result of capitalist society where consumption is heavily emphasized as well as production of goods. Giddens (1994) argues it is problematic that consumption is heavily emphasized in most modern economies because economies which are based on ongoing consumption contribute to the deterioration of environmental conditions. They also result in a society where many people do not feel worthy unless the consume for the sake of consuming to demonstrate what they have consumed and accumulated (Giddens, 1994). Therefore, he argues that productivism “must be actively and widely problematized” (Giddens, 1994 p. 38). This will result in questioning the consumeristic behaviors and practices associated with productivism which will challenge the fundamental assumption that paid work is required, and the meaning of paid work itself. However, in arguing against productivism, Giddens (1994) is not arguing against ongoing economic development; he is arguing against the unbridled consumption of resources and commodification of work for the sole purpose of economic development. The purpose of work, he says, should be happiness. Yet in modern society that purpose has been shifted from valuing happiness, personal development and well-being to productivism which values consumeristic behavior. Anderson (2009) argues that this productivism has resulted in education and training being increasingly influenced by neoliberal pressures to ensure that education and training institutions support economic objectives. These influences include increasing “privatization, commercialization, and marketization of its provision and financing” (Anderson, 2009 p40). As a result of neoliberal influences, and as a result of the increasing adoption of human capital theory, most curriculum design “is based on Taylorist technical-rational, ‘training needs analysis’, in which the sole frame of reference is the workplace” (Anderson, 2009 p. 41). The goal of these activities is ultimately to enhance the economic success of organizations, and all other possible goals that might be considered are subordinated. Anderson (2009) states that the needs and interests of the individual and of society have been pushed aside to ensure the needs and interests of industry are met. Anderson’s (2009) assertions regarding neoliberal influences are echoed by Carroll (2010, 2018). Carroll (2010) provides an analysis of corporate structure, ownership, and influence in Canada. Furthermore, Carroll (2010) provides examples of how corporate influence has affected Canadian universities because, he says, there has been a shift to seeing universities as sites of human capital and expertise creation to support corporate and national economic objectives. Anderson (2009) argues that failing to question the assumptions underlying productivism, or to even be aware of them, results in the reproduction of “agents of productivism” at higher education institutions (Anderson, 2009 p. 45). In his discussion Anderson (2009) is discussing TVET learners and institutions. However, given that TVET is a field of HRD, those HRD professionals who are immersed unquestioningly, and without reflexive understanding of the productivist context in which they work, will also become agents of productivism (Anderson, 2009).

            Anderson (2009) challenges the underlying assumptions that sustain neoliberal productivist objectives and interests. He suggests that paid work, commodified in support of economic objectives, is not necessary and that a different way of thinking is possible. The current pursuit of economic objectives at all costs has resulted in social and environmental challenges from which communities and societies may not be able to recover he says. Therefore, according to Anderson (2009), a solution to environmental damage may be to challenge or step away from the underlying assumptions that we must all work to earn so that we can consume.

            Finally, it is interesting to consider the following. Given that GHRD can have a strategic benefit for organizations, and that a benefit to society and the environment can accrue from GHRD, it is fascinating to consider that the implementation of CSV appears to have actually performed the functions which have formerly been performed by national and local governments. In an era of globalization, transnational corporations, and a neoliberal perspective (which pursues, generally speaking, less government), some large corporations have taken on the role of ensuring societal well-being. It will be interesting to see how far this shift in power from governments to corporations continues.

            A fully green implementation of organizational HRD strategies, such as the creating shared value or the transdisciplinary engineering approach requires more than having companies attend to using less photocopier toner or paper. More is required of companies than touting the number of dollars spent on their green or CSR programs. Yet these are the shallow approaches to which some companies still resort in 2019. Faced with increasing competition for human resources, how do Saskatchewan businesses, Crown corporations, and government entities rate their CSR operations? As noted above, younger generations entering the workforce want certain things, including environmentally sustainable operations. Therefore, organizations must transform themselves to be competitive and to thrive. HRD professionals can play a central role in such transformations.


References

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Baric, A. (2017), “Corporate social responsibility and stakeholders: Review of the last decade      (2006-2015)”. Business Systems Research, Vol. 8, No. 1, pp. 133-146. doi:10.1515/bsrj-2017-0011

Bee, J., Diby, P., Mbacke, B., & Wettstein, B. (2015). Nestle: Sustainable value chain       management from the farm to the fork. In M. D’Heur (Ed.), Sustainable Value Chain Management (pp. 313-326). doi:10.1007/978-3-319-12142-0

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Giddens, A. (1994). Beyond left and right : The future of radical politics. Stanford, CA: Stanford University Press.

Gilley, J.W. & Maycunich Gilley, A. (2003). Strategically integrated HRD (2nd Ed.).          Cambridge, MA: Perseus.

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Peruzzini, M., Pelliccari,M., Bil,C., Stjepandic,J., and Wognum, N. (Eds.), Transdisciplinary Engineering Methods for Social Innovation 4.0 (pp. 1184-1193).   Washington, DC: IOS Press.

Scafa, M., Marcon, M. & Germani, M. (2018). A critical review of industrial symbiosis models.    In M. Peruzzini, M. Pelliccari, C. Bil, J. Stjepandic, and N. Wognum (Eds.), Transdisciplinary Engineering Methods for Social Innovation 4.0 (pp. 1184-1193).   Washington, DC: IOS Press.

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Wognum, N. & Bremmers, H. (2009). Environmental Transparency of Food Supply Chains –        Current Status and Challenges. In S-Y. Chou, A. Trappey, J. Pokojski, S. Smith (Eds),       Global Perspective for Competitive Enterprise, Economy and Ecology (pp. 645-652).          doi:10.1007/978-1-84882-762-2


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