Corporate Social Responsibility and Supply Chain Sustainability - Essay Example

Corporate social responsibility in supply chains – Analyze the impact in the context of global supply chains Table of content Contents Contents 2 Executive summary 3 Relevant Journal Articles 5 Executive summary The research report is based on the issue of corporate social responsibility and its impacts on global supply chain. In the introduction of the report, the importance of given topic and objective of the research have mentioned. In literature review 21 different articles have selected to conduct the research. For this purpose, all related articles have listed in the table to classify them in different categories. Time and its themes are used to differentiate each article from one another. In the third portion report which is literature research, the detailed analyses and synthesis of 21 journal have given to relate the topic of research with those selected journal. In the end of the literature report also describes various options and recommendations to achieve corporate social responsibility to ensure sustainability of global supply chain. In the conclusion all the report and its findings have been summarized. Introduction The topic of this research paper is corporate social responsibility and its impact on global supply chain. Corporate Social Responsibility generally known as CSR has become a hot topic of discussion across the world. It has many benefits and relevance to different departments of the organization. Like, CSR and its policies help in recruiting right people for right job, it promotes feel good quotient, improves corporate image, prepare future regulations and also empower soft laws (Vogel, 2005). Moreover, it promotes environment friendly policies and green customer concept.it also convince investors to invest in sustainable practices for create positive impact on environment. Similarly, corporate social responsibility in general and supply chain sustainability in particular have been growing concern for companies and also for research over past decade (Seuring & Muller, 2008). The concept of corporate social responsibility has a long history of many years. According to Corporate Social Responsibility concept all the companies whether local or international have an obligation to pursue those policies and line of action that are beneficial for the values of the society (Bowen, et al., 2013). While in the past, the theme of sustainability was only referred as the environmental issues on the other hand the concept of corporate social responsibility is considered as social issue (Robinson, 2004). Moreover, this concept become more important after the transformation of simple world in to global village. New concept of globalization of production has emerged with new responsibilities and core values for multinational companies. New challenges emerged, every multinational wants to use the concept of CSR as its competitive edge. Likewise multinational firms make best CSR strategies and policies i.e. “Green strategy” to create positive image of their brands by promoting environment, nature, social and cultural friendly strategies globally. And now in Globalized world of business many researcher and scholar consider corporate sustainability and corporate social responsibility as one concept (Lehtonen, 2004). In this research essay we will focus on the concept of corporate social responsibility. Moreover we will also analyzing the effect of good or bad CSR policies and its impact on global supply chain with the help of related journal and articles that will be mentioned in literature review. In literature search the findings and synthesis of the related articles will be mentioned. At the end, the findings of related journals about the topic of this report will be concluded. Literature Review The methodology that has been chosen for conducting this research is reviewing the articles or journals related to the topic. The study of articles includes a detailed review of articles published in English in peer reviewed scientific journals. The journals search was carry out on various web database. Moreover the research of journals was based on two distinct but related criteria. First criterion related to global supply chain which includes all agents of global supply chain i.e. purchasing processes, supplier, procurement, buying vendor, contractor, retailer and wholesalers. The second criterion is related to corporate social responsibility and its agents and impacts i.e., corporate citizen, social ethics, code of conducts, rule, regulations, corporate laws, and environmental or nature sustainability. For this purpose we have selected 21 journals and articles that are listed in the below in the table to classify all the journals with respect to time and their main issue. Relevant Journal Articles Journals Articles related to Corporate social responsibility (CSR) in supply chain No of Journals Name of journal and Author Year of research and publisher Issue or view point of journal 1. “What is a Responsible Supply Chain?” by Terje I.Vaaland and Richard Afriyie Owusu Published by EPCI Foundation, 2012 It describes the core processes of a supply chain and the concept of corporate social responsibility (CSR). 2. “Corporate Social Responsibility in Buyer-Supplier Relationships” by “Thomas Leppelt, Kai Foerstl and Evi Hartmann Published by German Academic Association for Business Research (VHB),2013 Journal is based on the concept of responsible supply chain and its benefits 3. “Corporate social responsibility in supply chain management” by Eric, Robert and Patricia Published by Darden graduate school for business,2003 It explains the normative perspective of Corporate social responsibility in supply chain management 4. “Challenges of Responsible Supply Chain Management” by Krisztina and Karoly Published by Club of Economics in Miskol 2012 The journal explains the Challenges of Responsible Supply Chain Management/Moreover it also suggest the ways to overcome the confusions that are created from complex codes of CSR. 5. “Collaboration on Corporate Social Responsibility between Suppliers and a Retailer” by Che-Fu Hsueh Published by World Congress on Engineering 2012 It describes that Collaboration between Suppliers and a Retailer is a best possible way to create corporate social responsibility in the supply chain 6. Socially Responsible Supply Chain Partnership Based-On CSR Equity Model By Rong Wang American Journal of Industrial and Business Management, 2012 The journal gives a detail view of Socially Responsible Supply Chain Partnership Based-On CSR Equity Model 7. “Investigating CSR in supply chain” by Fransasco, Pier Paolo and Barbra Scozzi Published by Elsevier Ltd Journal of Cleaner Production,2008 Journal describes the difficulties facing by SME’s in CSR and Supply chain Journal Articles related to supply chain sustainability No of Journals Name of journal and Author Year of research and publisher Issue or view point of journal 1. “An exploration of measures of social sustainability and their application to supply chain decisions” by Margot J. Hutchins, John W. Sutherland Published by Elsevier Ltd Journal of Cleaner Production,2008 Journal describes the measures of social sustainability and their application to supply chain decisions in the global business market. 2. “Environmental Management Systems and Green Supply Chain Management: Complements for Sustainability” Nicole Darnall, G. Jason Jolley and Robert Handfield Published by Wiley InterScience,2006 Journal explains the Environmental Management Systems and Green Supply Chain Management also describes the Sustainability and its complements 3. “Supply chain sustainability” By George Kell and Aron crammer Published by BSR,2010 It explains supply chain sustainability also gives recommendation for continuous improvement 4. “Managing sustainable supply chain” by Dr. Stephen Brammer Dr. Stefan Hoejmose Dr. Andrew Millington Published by Network for Business Sustainability, 2011 It describes the Influence of Globalization, Management complexity, and new Business risks in supply chain management 5. “Mapping Social Sustainability in Supply Chain Processes: A Literature Review” by Ha H. Ta and Monique L. Ueltschy Murfield Published by Council of Supply Chain Management Professionals Educators’ Conference, 2013 It explains the whole supply chain sustainability processes with detailed literature context. 6. “Sustainable supply chain” by Jonath, Robert, and Vaidyanath Published by Elsevier Ltd Journal of Cleaner Production,2007 It describes the background and detailed concept of Global concept of supply chain sustainability Journal Article related to CRS and its impact on Global supply chain No of Journals Name of journal and Author Year of research and publisher Issue or view point of journal 1. 'Corporate Social Responsibility in Supply Chains of Global Brands: A Boundary less Responsibility? Clarifications, Exceptions and Implications' by Amaeshi, K., Osuji, O. & Nnodim Published by Journal of Business Ethics, 2008 It explains Corporate Social Responsibility in Supply Chains of Global Brands 2. “Influence of Corporate social responsibility on global supply chain management” by Bojan Rosi, Tina Cvahte and Borut Jereb Published by University of Maribor,2009 It describes the influence of Corporate social responsibility on global supply chain management after emergence of global business market. 3. “Corporate social responsibility in global supply chains” by Mette Andersen and Tage Skjoett-Larsen Published by Emerald,2009 Journal describes in detail Corporate social responsibility in global supply chains with the case study of IKEA company. 4. “Corporate Social Responsibility in Global Value Chains” by Katharina Wortmann and Richard Bolwijn Published by United Nations 2012 It describes the Corporate Social Responsibility in Global Value Chains and also highlight the Evaluation and monitoring challenges for small and medium sized suppliers in developing countries 5. “The impact of corporate social responsibility on global sustainable supply chain” by Bongani Edwin Mushanyur Published by European Journal of Business and Social Sciences,2013 Journal explains and discussed the impact of corporate social responsibility on global sustainable supply chain with its complete literature review. 6. “The Limits of Supply Chain Responsibility: A Critical Analysis of Corporate Responsibility Instruments” by Radu Mares Published by Nordic Journal of International law,2010 It gives Critical Analysis of Corporate Responsibility in global supply chain 7. “Socially Responsible Procurement: Corporate Social Responsibility in a supply chain context” by Jane Levin Published by CIPS Knowledege,2013 It describes the concept of global excellence in supply chain 8. “Strengthening CRS in global supply chain management” by Helle Bank Jørgensen and Peder Michael Pruzan-Jørgensen, Published by Business for Social Responsibility,2003 Journal suggest the ways of Strengthening CRS in global supply chain management Literature research The review of these articles have explored different areas of corporate social responsibility and global supply chain management. According to research of cleaner production the sustainability is mainly depends on the different systems like ecological, social and economic. These systems are pillars of sustainability. On the other hand corporate social responsivity demands ethical behavior to these pillars of the society. Moreover, these systems should also be considered during the supply chain and its management. Journal of cleaner production also stressed on the need of establishment of socially sustainable supply chain. Evaluation of every company especially multinational corporations is done on the basis of its social impact and socially responsible image. For this purpose a company should provide adequate wages to labor to promote social responsible behavior and company should also made policies, strategies and regulations to ensure environment friendly behavior throughout its supply chain (Hutchins & Sutherland, 2008). Moreover, sustainable supply chain is a need of global world of business. To become socially responsible company, it is very important to ensure effective environmental management system (Darnall, et al., 2008) and also ISO 14001, the global EMS standards (Peglau, 2005).Environmental management system is a strategic approach through which multinational firms can address the ways of how an organization will carry out the impact on natural environment. According to the Environmental management system, organization does not require improvement in environmental performance but it should work on the environmental related policy and procedure. In the global perspective, environment management system complements the green supply chain management. Environmental system management creates environmental sustainability within the organization but also throughout the global networks of supplier and buyer (Darnall, et al., 2008). Likewise, the old concept but with new perspective has emerged after the inception globalized business world and now corporate social responsibility has to become responsible supply chain. Now, corporate social responsibility is divided into three levels intra-organizational level, business to business level and business to society level. The connection between CSR and supply chain is totally depends on the promotion of values and strategies related to society and environment. The multinationals who are irresponsible towards their society they are actually breaking the chain of supply chain management because effective supply chain is always responsible. Though it’s a big challenge to meet the demands of corporate social responsibility within and outside the organization boundary because interaction between the actors in the supply chain is high. Moreover competition, cost handling pressure, cultural differences and high demands of stakeholder make the issue more complex (Vaaland & Owusu, 2012). Moreover, in general we can say that corporate social responsibility and supply chain are inter related concepts.it shows the voluntarily integration of companies by companies on social and environmental concerns in their commercial operations and in their relationships with interested parties. CSR is not only the issue of supply chain of multinational firms but also it is related to small medium enterprises SME’s where company is directly managed by the owner. In global business supply chain, mostly SME’s of developing countries are facing environmental and social concerns of supply chain. In developing countries companies whether small or large need effective strategies, diverse management systems and tools to address social responsible issue along their supply chain to build more value of their company (Fransasco & Scozzi, 2008). In the Global perspective, considering the broader definition of CSR, global brands like Adidas, Nike, and other food chains are also facing intense pressure from the group of responsible supply chains to promote corporate socially responsible supply chain. The pressurize groups also ask the multinational brands to limit the exploitation of labor class of developing nation. As labor exploitation is also one of the biggest challenge of corporate social responsibilty.it also create ineffective supply chain management. This kind of exploitation like labor and child labor exploitation has badly effect the image of the brand. Recently, it hacks the reputation of Nike brand, when pictures of child working as a labor leaked.in this way sentiments of the public get hurt and misperceptions about the irresponsible supply chain emerged in general public which leads to form negative image of the brand (Amaeshi, et al., 2008). Similarly, CSR is becoming the concept related to responsible supply chain. Companies choose to behave in a responsible manner just to create good will and good reputation. It has become the important concept and matter for all businesses. Corporate responsible activities also effects the sales and marketing of the companies. Now, many companies are trying to extend their CSR activities by involving supply chain partners in it, just to protect environment within and outside of the firm. The responsible supply chain involves different actors all have conflicting and different objectives and targets. So, the first thing that is needed to create responsible supply is coordination in all partners at all levels especially in supplier and retailer. CSR activities must design in a way that benefited all the partners of the supply chain (Hsueh, 2012). Because not a single organization can ever exist without being connected to its agents of supply chain. The operation of supply chain is not only related to procurement of material or transfer it to its source but it has many other responsibilities and for fulfilling these responsibilities integration is highly demanded in responsible global supply chain. Trust between the supply chain actors is important factor of corporate social responsibility.it increases the chances of survival of all participant of the supply chain. Moreover, integration and trust can only give competitive advantage if company also act as socially responsible because survival of environment is very important. A new trend of responsible supply chain has shifted from cohabiting to cooperating socially responsible has changed the aims of companies like now companies think about wellbeing of society and also labor. If they consider investors requirement then they also think about rules, regulation, laws, value and norms of the society (Rosi, et al., 2009). Furthermore, many multinational companies have started responded to the pressure of stakeholders by developing and implementing rules, policies and procedures to ensure that their suppliers are complying with social and environment standards. For this purpose companies are systematizing corporate social responsibility with the help of implementing codes and conducts in their organization. The number of codes and conducts have been introduced since 1990 (Hopkins, 2003). Generally code of conduct are the part of the agreement between company and its supplier. They are based on legislature, declarations, laws and legal values (Andersen & Skjoett-Larsen, 2009). Like according to the Global compact principles of United Nations there are some principles that must be incorporated in to company-supplier agreement. The principles based on human right and its protection. Likewise other principles are related to labor rights, abolishment of child labor, elimination of racial and discrimination within workplace or recruiting process .It also includes environment and social concerned principles like promote green environment, encourage the development and installation of environment friendly technologies and eliminations of corrupt practices like corruption, bribery and nepotism from company. These all principles are mandatory to follow for multinational companies. Hence, in this way companies can bound the supplier to show compliance towards responsible supply chain (Sisco, et al., 2010). In addition to this, supplier codes and conducts have become common practice for the companies to ensure corporate social responsibility and promoting the presence social and environmental concerns behavior among their supply chain members. But it is easier for multinational firms to add such a codes and conducts in the agreement with suppliers not for small medium enterprises especially of developing countries. Even these codes and conducts creates new difficult challenges if they want to become the part of global supply chain network. Different empirical studies shoes that suppliers that operate in developing countries always encounter with strong scrutiny from customers because they operate in high risk sourcing zone (Lund-Thomsen & Lindgreen, 2014). Similarly, sustainability issue and corporate socially responsible behavior is one of the most important criterion to be used to select the good and responsible supplier. Now, for companies social and environmental issues are as important as their sales or profit because profits are directly linked with good will of the company. And goodwill is only generated through responsible supply chain actors especially supplier. The sustainability dispensation directly effects the image of the company.in the globalized market, companies should act like philanthropist, ethical and legally responsible member of the supply chain. Companies have to avoid all the activities that can promote misperception of any value of the society (MUSHANYURI, 2013). One of the biggest challenge that companies are facing is labor right protection trough out the supply chain. Labor rights is a basic component of responsible supply chain and corporate social responsibility. So, it must be protected from lower tier to higher tier of production. Corporate social responsivity is not an issue only related to protection of environment and clean surroundings but this issue is equally related to the human rights that comes in social responsibility of the firm and labor right protection is one of them. But researches show that labor right issue remains scares despite it’s a biggest responsibility of all actors of the supply chain (Mares, 2010). For this purpose International organization should play their part and they interrupt in the corporate social responsibility issue to protect labor rights (Mares, 2010). Likewise, it is very difficult for the multinational firms to increase their strategic importance with the complexities of supply chain. Apart from labor or human rights issue, there are many other complex issues are also present global supply chain like, supply chain disruption and discontinuity, inadequate product quality, unpredictable delivery times (Forstl, 2010) , additional cost, cultural issues, linguistics concerns, economic and political issues. These all concerns are related to corporate social responsibility with in supply chain (Millington, 2011). In addition a research shows all the challenges can be tackle easily if a company measure its CSR capabilities by using fact sheet method, by targeting indirect customers, by using marketing strategies by promoting education, human rights and green environment to promote corporate social responsibility. For this purpose the integration of marketing and purchasing process is a crucial matter of responsible supply chain. According to research a cross functional method is effective to create integration among different actors of supply chain (Thomas Leppelt, 2013).Cross functional method is also effective but companies can use equity based model to create corporate social responsible behavior in the supply chain. Like China has world largest economy but at the same time it is lacking in CSR activities. CSR activities are very useful in creating positive image and trust between the actors of supply chain so it is very important especially for the biggest economies. For this purpose of creating integration the equity based model is something of very great importance. With the help of equity based model, the share rate and profits should be equally distributed between the supply chain members. The inequity of sharing ratio can disturb the integration of the supply chain. Inequity can also break the supply chain network.to deal such a problems Equity based model is very effective (Wang, 2012). Furthermore, integrated supply chain is becoming the integral part of the competitive landscape as firms seeks to create strategic advantage. The most significant advantage of the integrated supply chain is economic benefit and economic gain is only derived from using coordinated efforts (Eric, 2004). For this purpose, the consideration is given to convergence of integrated supply chain and sustainability. The most main factor of sustainability of supply chain is environmental concerns (Jonath, 2007). If companies fail to achieve the sustainable supply chain their good will would badly hurt. Most of the companies are accused by pressure group for neglecting social, environmental and ethical issues (Ta & Murfield, 2013). The main issues regarding environmental concerns of responsible supply chain are climate protection, fuel and material, health and safety, emission reduction, sustainability with environment protection standards, biodiversity, reduction of specific heat, green and environmental friendly technology and recycling or disposal of products. These are the parts of responsible supply chain under the umbrella of environmental issues (Jorgensen & Pruzan-Jorgensen, 2003). Furthermore all the issues of integrated and responsible supply chain must be addressed to ensure the corporate social responsibility within and outside the organization. For this purpose different strategies and ways can be used. In the above paragraphs we have discussed two approaches one is cross functional model and other is equity based model to strengthen the integration of supply chain but now we will discuss some ways to ensure CSR. Company can ensure CSR if it can prioritize the key issues first means what things are necessary to consider first, labor rights or environmental concern. Then it can make separate policies to tackle all concerns, after that company should integrate its supply chain communication and all operational processes to ensure the submission of CSR rules at all levels of supply chain among all levels (Levin, 2013). Moreover, supply sustainability is the crucial concern for the companies because now it has become the strategic factor. This factor is responsible not only in recognizing the risk but also for the minimizing the risk. Proactive companies use different strategy to ensure the sustainability like they use codes and conducts, rules, policies, and laws to regulate sustainability within supply chain. But these codes and conduct creates confusion and misunderstanding. For this purpose different organizations and government can play their part by introducing simple rules and regulations for eliminating the confusion that has created by complex laws and codes (Szegedi & Kerekes, 2012). Hence in this way a company can create a responsible and integrated supply chain. Conclusion To conclude the topic, we can say that companies must develop and support a broader and sustainable perspective towards their supply chain. Through sustainable supply chain and corporate social responsibility a company can promote positive relation between consumer, suppliers, community and also with environment. The interaction is very important for creating integrated network of supply chain. Integrated supply chain also helps in facing the challenges of this global market. Hence the company should promote environmental, social, ethical, cultural and even linguistic concerns if it wants to promote its good will through corporate social responsibility. For achieving CSR a companies can use different strategies like cross functional or equity based model. Therefore CSR has become strategic as well as crucial policy for all multinational and submission to corporate social responsibility is a duty of every company whether local or multinational. At the end we can deduced that sustainability issues are no longer issue to be observed but this is that the issue to be addressed not tomorrow but now today. So it must be considered by all companies of the world to promote green environment and prosperous society. References Amaeshi, K. M., Osuji, O. K. & Nnodim, P., 2008. Corporate Social Responsibility in Supply Chains of Global Brands: A Boundaryless Responsibility? 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