The four traditional arguments are the moral (or ethical) argument, the license-to-operate (or gal) argument, the sustainability argument, and finally the reputation (brand image) argument. While acknowledging that these are solid arguments in support of CARS, the article further argues that another solid reason for pursuing a strategic CARS program is that it could lead to innovation. In conclusion, the article argues that CARS should not just be considered an expense, but rather an investment.
According to Joe Silvia, CEO of Screwier, “Innovation in CARS will look at companies across industries and examine how they are innovating and using CARS to reach and engage stakeholders, employees and customers. In this article, there are many instances and ideas that have or should help companies take control of their own CARS and also how it has been proven that CARS increases the profitability of a company.
CARS driven innovation on the other hand is a process where companies use CARS (Corporate Social Responsibility) as a driver for designing a profitable product or service, which will prove beneficial for the surrounding environment and society. Introduction As early as in the 18th century, companies have acted in socially responsible manners by building houses and schools for their employees and their hillier (Cannon 1 994, Carroll and Bucktooth 1999). Michelle (1989) traced the emergence of corporate social responsibility as a concept back to the 1 9205.
He sees the discussion as an ideological movement to legitimate the power of large corporations. However, since the mid sass, political and public debates about the social responsibilities of firms have gained renewed force. Increasing numbers of companies are beginning to realize that they can no longer ignore the moral expectations society places on them. Many firms are working to deal with a variety of often inconsistent and conflicting norms and emends placed upon them.
They struggle with the question of how to define their role as good corporate citizens. Policymakers, the general public, and even corporate leaders, agree that companies of all types must also be responsive to the needs of the communities in which they do business. Advocates of Corporate Social Responsibility (CARS) such as Station (2002) argue that “it is clear that society expects much more from companies than simply a well-made product or a reliable service at the right price” (p. 4). Not only is society expecting companies to be good corporate citizens, it is also becoming less and less learnt of companies that fail to address their social responsibilities. CARS can no longer be ignored, especially by major corporations, and evidence that it has become a hot topic is found in corporate boardrooms around the world. Today, many scholars and analysts are recommending a more strategic approach to the CARS.
Some corporate leaders now see CARS as part of their strategic management program, while others see it as a source of in innovation (Allen & Hushed, 2006). In fact, in the course of pursuing CARS initiatives, some companies have developed very innovative products and services that are inefficient to the company’s profitability. Strategic CARS should be distinguished from charitable donations or the “good works” of corporations and requires the company to balance the needs of all stakeholders with its need to make a profit and reward shareholders adequately.
Traditionally, supporters of CARS have used concepts such as moral obligation, sustainability, license-to-operate, and reputation as arguments why CARS is important. To this end, this study examines this latest argument in support of (CARS) and provides an overview of CARS and how it can help organizations achieve their goals, sometimes in unexpected ways. What is CARS? Corporate Social Responsibility is a management concept whereby companies integrate social and environmental concerns in their business operations and interactions with their stakeholders.
CARS is generally understood as being the way through which a company achieves a balance of economic, environmental and social imperatives (“Triple-Bottom-Line- Approach”), while at the same time addressing the expectations of shareholders and stakeholders. In this sense it is important to draw a distinction between CARS, which can be a strategic business management concept, and charity, sponsorships or philanthropy. Even though the latter can also make a 3 valuable contribution to poverty reduction, will directly enhance the reputation of a company and strengthen its brand, the concept of CARS clearly goes beyond that.
Why CARS? Moving Forward If you are serious about driving a CARS Strategy through your own business, then you should be acutely aware where global corporate social responsibility is headed in the future. CARS trend analysis suggest the following points: 1 . Consumers are increasingly interested in taking action on issues such as climate change 2. CARS and branding campaigns that resonate with consumers re those that address the consumer’s interest, provide easy-to-digest education, and spark dialogue and action 3.
Reputable campaigns are those that are innovative and substantiated by the company’s authentic commitment and ability to demonstrate tangible results towards its CARS goals. 4. Partnerships are critical as a pathway forward, either between companies or with MONGO partners. They help build credibility, and no one company can go through such a large issue like AIDS or global warming. 5. CARS isn’t going away soon. The Millennial generation, which is now hitting the workforce, is demanding and driving this reality. 6. Competitors are developing CARS strategies.
Not considering a CARS strategy ourselves would let the competitor get ahead. CARS does not tend to show and yield instant results, it being a long term interest and venture. Benefits of CARS Collective corporate social responsibility (CARS) activities amongst various corporations and its stakeholders could contribute to the microeconomic development of a developing country through sustainable benefit to all. At the same time, optimum national impact, cooperation, and communication should be encouraged and socialized.
Government Development and acceleration Of microeconomic sustainable growth wrought using “good corporate governance/value change” and “best practices,” resulting to a market environment conducive to both local and foreign investors (with the availability of good infrastructure, good education and health facilities, well-trained human resources and labor, and well-cared- for environment) C] Encouraging CARS activities, giving benefit to the community, with meeting certain development and sustainability criteria possibly being considered for tax incentives O Joint CARS budgets possibly representing an additional source of public revenue (employment and wealth creation to reduce poverty)
Local Community and Society CLC Changed habits, improved quality of life C] Capacity building, creates employment and wealth Corporations Growth, profit, image, and competitive edge L] Community acceptance and goodwill C] Pride and spiritual values to employees and their families C] Genuine dialog with stakeholders The World and Environment CLC Waste management C] Balanced ecosystem 0 Green and clean environment Review on Ongoing CARS Activities Corporate suggestion boxes may be crammed full of such innovative ideas, methods or devices in virtually every industry, but “new ‘ does not necessarily reinstate into “profitable,” so there is clearly something more required to make any such innovation sufficiently worthwhile to pursue to achieve improved profitability or otherwise contribute to a company’s bottom line.
In some cases, an unexpected or unintended aspect of the innovation may represent the best chances for profitability and these cannot be foreseen of course. From another perspective, it is possible for an organization to achieve an improved bottom line simply by taking advantage of the positive public relations that result from a greener approach to its operations or supply Hahn management activities as the result of some innovation. Environmentalism According to Hood (1 995), “Within the corporate social responsibility movement, there is no more important issue than environmentalism. Often the call for corporate responsibility and the exhortation to ‘save the planet’ from a host of environmental problems seem virtually to be the same thing.
The firms most honored for their responsibility such as The Body Shop and Ben and Jersey’s, usually exhibit some sort of (highly publicized) commitment to environmental goals”(p. 80). The American public has been responsive to impasses that use their innovations for the collective good, then, as long as they are made aware of them and many companies spare no expense to accomplish this, spending far more perhaps on advertising their good deeds than they did on the original innovation. Notwithstanding these misguided corporate tactics, the fact remains that CARS is just good business and if managed properly, can provide a company with a positive return on the any investments made to this end.
For example, as Jones and Morasses (2003) point out, “As environmental pressures continue to increase, companies that improve environmental performance more than heir peers are likely to achieve superior financial returns and competitive positioning over the mid to long term. In addition, corporate environmental leaders frequently report achieving enhanced profitability in the short term” (P. 34) 5 Manning in his essay, “Benefits of Environmental Stewardship” (2004) reports that, Today, more than ever before, the air we breathe and the water we drink are not strictly ‘environmental’ issues. They’re business issues. That’s because today, more than any time in our history, business and the environment are inextricably linked. And successful companies know it.
They annunciate regularly with people and businesses in the neighborhoods they serve to understand and fulfill their needs and to avoid taking steps that could be perceived as harming them in any way (p. 9). CARS as another Word for Philanthropy An innovation that could satisfy the needs of the local community represents such an opportunity for using CARS to a company’s advantage, again providing that the otherwise strictly altruistic nature of the enterprise is not lost on the company’s consumers and potential consumers. Communication is the key here. According to Manning, companies that use their CARS in this fashion stand to main across the board: Are these businesses being philanthropic? Yes and no. They’re doing the right thing, to be sure. But they’re also doing the smart thing.
With more local and investment communities looking beyond earnings to a company’s ‘triple’ bottom line, being socially and environmentally conscious is key to success, even survival, in today’s competitive business climate” As noted above, corporate leaders must remain vigilant to recognize opportunities to use innovations to their advantage in terms of its impact on their bottom line. Although the phrase “thinking outside the box” has become somewhat worn, t is entirely appropriate in this case because the “innovation” in question may well be the unexpected or unintended beneficial outcomes of something that is already being done as well as the introduction of some new method, concept or device. CARS. What to do about it?
Although corporate leaders today cannot wait for an apple to drop on their collective heads to provide them with the inspiration needed for a particular innovative approach, of course, they can take advantage of unexpected opportunities to use the results of their CARS initiatives in innovative ways. Because innovations can span the entire range of a company’s operations, he manner in which CARS initiatives can be used to accomplish them are virtually limitless and are constrained only by the imaginations of the players involved. Some guidelines provided by Manning can be used to help business leaders recognize opportunities for addressing an existing need or using an unexpected or unintended outcome to their advantage as shown in Table 1 below. Table 1 : Guidelines for identifying opportunities for using CARS innovations to a company’s advantage Steps Commitment t/Rationale Make Environmental Commitment Part of Your Corporate Culture.
One way to “stick to your guns” is to put environmental responsibility right in the “holster. ” Make it a corporate value and publicize that value, both internally and externally, to all who will listen. Most importantly, follow through. Staying true to your environmental ideals is an important way to build solid relationships with communities, customers, investors and regulators. And these relationships can, in turn, give you the respect and credibility you need to successfully negotiate issues that could be important to your company later on. Also, make your Environmental organization an integral, and high-profile, part of your corporation; not a apartment relegated to a remote operating area.
Your environmental performance does, after all, have far-reaching implications that extend beyond the realm of “Environment. ” And it’s becoming more evident as time goes by that green companies not only have a great track record with attracting and retaining customers, they also have a competitive edge when it comes to recruiting and holding on to the best and brightest employees. As most companies realize, laws–particularly environmental laws–are dynamic, not static, and they continue to emerge at an exponential rate. Smart businesses look to stay ahead of the rev by anticipating future regulations and by influencing the regulatory process to assure the application of sound science. Many simply go above and beyond compliance as a regular practice.
Examples include: exceeding emission requirements; reporting more, not less, to the public; advancing environmental stewardship in your service territory; encouraging employees to volunteer for community environmental projects; and, voluntarily donating legacy sites for open space, rather Stay ‘Ahead of the Curve’ with Rules and Regulations. 7 Keep Your Programs, Practices and Products Clean. In Times of Trouble Don’t Wait for Community Needs TO Become Community Nuisances. Than development. Besides protecting and preparing yourself for the future, your efforts generally won’t go unnoticed by the public, press and environmental regulatory agencies. Even businesses in industries that are not inherently clean–transportation, power generation, manufacturing, etc. -can make a positive difference in their communities by running their operations as cleanly and efficiently as possible.
Explore and try to utilize the latest technologies available. Make an investment in future efficiency by putting your R& D dollars and muscle to work. Today, ore than ever, there are sophisticated technologies coming to market that can turn your ambitions of environmental stewardship into reality. Make sure your product and the way you manufacture it is as clean as possible. And use it yourself. If you’re going to say you’re “green,” you need to act green. So, if you’re promoting natural gas as an alternative transportation fuel, use it in your own fleet. If you’re selling recycled paper, use recycled paper. And if you’re generating electricity, use clean fuels to do it.
Also, no matter what field you’re in, get involved in your local communities, and introduce programs and revise that can benefit their members. Staying in touch with local customers’ needs and concerns–and striving to meet them–is an excellent way to forge positive, long-lasting relationships, and to put yourself in the positive public eye. Get out there and address communities’ needs and concerns at the start of each project you contemplate. Make it a priority to achieve positive results for everyone, even (or especially) in a difficult situation. For example, if you’re considering a development project that might meet with public skepticism or “NIMBI (Not In My Backyard)-ism,” don’t wait for the yelling to start.
Engage the community, and come up with compromises and workable solutions right at the beginning. Be honest about your plans and, if possible, be flexible about how you’re going to achieve your goals, with the community’s interests always in mind. No news can be good news in certain circumstances, and being proactive can shield your company from the consequences of bad press that inevitably results from going against the wishes Of the community you are trying to serve. Businesses and environmental groups are no longer necessarily on opposite sides of the fence. Many are establishing and maintaining ritual partnerships that benefit both business and the environment.
Businesses that support their local environmental groups may be surprised to find that many groups are just as willing to cooperate with you as you are with them–for the good of the environment and the local community. They can also guide you toward environmentally friendly practices that are not necessarily more difficult, dimensioning or expensive, but which can greatly benefit the local environment. The bottom line is that businesses and environmental groups working together can forge compromises that strike a balance between conservation and placement; between philanthropy and profitability, etc. Make Environmental Groups Your Friends, Not Foes. FOCUS POINT Characteristics Of a good CARS program: L] Is embedded within the business operation. C] Generates sustainable benefit. C] Provides a win-win solution.
C] Is impossible for a company without profit. C] Can only be sustainable if continuous capacity building and community empowerment are done, supported by the necessary infrastructure. 0 Continuous improvements through monitoring, assessing, and reporting. 9 The Changing Popularity of CARS A wide variety of corporate practices has been developed under the vignette f CARS, most often in reference to acts of responsibility. Etymologically, to be responsible is to be answerable (Lucas 1993), to be able and willing to answer. As a matter of moral principle, being or acting ‘responsible’ is good. But things change once the principle is turned into practice.
Immediately, many questions rise, for example regarding the realm for which responsibility is to be assumed, and the manners by which it is to be expressed. And things get worse once multiple responsibilities towards different stakeholders have to be addressed, all the more so if these responsibilities are incompatible or inflicting. Indeed, various corporate audiences express different expectations regarding how firms should assume their social responsibilities. The differences between principle and praxis are all the more visible once the CARS debate is examined at different levels of abstraction. If the CARS debate is examined at a high level of abstraction, there are two different positions.