Analysis of Social Performance of Hewlett Packard Company - Case Study Example

Analysis of Social Performance of Hewlett Packard Company Name Subject Instructor’s Name Date 1. Introduction Today, the corporate social responsibility and social performance of companies are in the forefront of corporate concerns. Given the factors their derive from society to support business operations, there is a reciprocal requirement for the businesses to contribute towards social prosperity (Solo­mon, 1999). As per Zeller et al. (2003) “the social performance of an organization comprises the relations of the organization with its clients and with other stakeholder (Zeller et.al, 2003). The Corporate Social Responsibility of organisations involves self regulation and voluntary undertakings of social contributions towards various stakeholders (Hockerts, 2008). This paper critically examines the social performance of world’s largest information technology firm – Hewlett Packard Company. 2. Overview of Social Performance According to Davis (1983), “corporate organisations ought to have responsibilities beyond simply enhancing their profits because they enjoy greater social and economic power in any society” (Masaka, 2008). For HP this translates in to responsibility towards entire world given its global presence.. In line with proper corporate responsibility approach, HP has prioritized its social performance activities and integrated it to the overall business strategies through its Global Citizenship program. The measurement of an organisation’s social performance involves investigating elements such as “mission, ownership, management principles,” staff management and development as “well as its conduct in the market and community and relations with various stakeholders” (Zeller et.al, 2003, p5). Institutional performance is infact a “license to operate” within the society where there is an implicit endorsement of the organistaion’s operations and the very existence, by the society (Post et.al, 2002). According to Freeman the CSR should be neither dependent on legitimacy nor morals but a part of organisational creed and culture. It has to be integrated into the overall organisational existence (Freeman, 1984). 3. An analysis of HP’s Social Performance within Global Society Hewlett-Packard Company which is commonly referred to as HP is the largest of information technology companies in the world today. Hewlett-Packard Company is recognized for its social responsibility through many awards and accolades over the year. The social performance of HP is driven by a well strategized Global Citizenship program which engages the HP supply chain, drives how the company develops new products, runs its operations and engages with stakeholders (Hewlett- Packard, 2010). Social performance is one of the seven core corporate objectives of HP and over 70 years, the company has aligned its business goals with the impact to society and stakeholders. While HP addresses various elements in its social performance, the focus on environment 3.1 Positive Social Performance towards Environment According to HP’s Global Citizenship program, “HP strives to be the world’s most environmentally responsible IT company” (Hewlett Packard, 2010). The company has driven its environmental conservation activities through recycling, use of renewable energy sources, conserving resources and developing products that conserve energy. According to records in 2007, the company claims that the company has met the targets of recycling 1 billion pounds of electronics and now working on the new recycling targets set at 2 billion pounds to be achieved by end 2010 which is a 73% lead over its closest competitors in the industry when it comes to recycling. HP also decreased its total energy use by 9 percent compared with 2008 and was ranked # 1 by Newsweek in 2009, in the Green Rankings of America's 500 largest corporations. HP is lauded for its efforts towards GHG emissions and being the first company in the IT sector to report, not only its own GHG emissions but also its supply chains emission data. HP’s far reaching efforts of conserving the environment by linking its supply chain in to the effort will harness over 700 strategic suppliers employing over 300,000 employees, spread across 1200 worldwide locations. HP’s new product developments are driven by the need to conserve energy, remove toxic substances in the product and following the principles of Green Chemistry. Green groups such as Environment California recognize and praised the company as one of the firms committed to keeping the world clean and green. In year 2007, HP gave a commitment to phase out dangerous toxic material such as flame retardants (BFR) and PVC from some of their products by year 2009. Developing products and driving innovation with environmental concern is critical for CSR in today’s world (Hockerts and Morsing, 2008). HPs high social performance in the field of environmental conservation benefits many stakeholders. The environment itself is a stakeholder and the future generations will live in a society with lesser carbons and use electronics that eliminate toxic material from their product designs. Society as a whole benefits from energy conservation, recycling and production of green electronics. Increasing of energy efficiencies by HP and its suppliers can also benefit the shareholders and consumers through reduced costs, reduced prices and better profitability. Phasing out toxic waste will benefit the environment and also the entire population since studies are showing that the effects of toxic waste from disposed computers can be very detrimental (Cook, 2004). These toxics have been found to reach the top of the food chain and end up in human bodies where a recent study in Canada indicated human bodies containing up to 10 times more than the expected levels of toxic substances which has then been linked to disposed computers with high toxic substances (Cook 2004). Case against Hewlett Packard While these beneficial actions toward environment are notable in HP social performance, they have been criticized by Greenpeace for not doing its best in removing toxic substances from its products (Environmental Leader, 2007). A demonstration organized by Greenpeace activists recently, they painted the word “Hazardous Products” on top of the roof of HP Global head office building in California. This was in reaction to HP’s postponement of the commitment given to phase out toxic substances such as brominated flame retardants (BFR) and PVC (polyvinyl chloride) plastic from the HP computers by 2009 (Shatner Talks, 2009). According to industry sources, other manufacturers such as Apple have already embarked on this aspect with much vigour. In addition to these direct allegations of lapses in CSR in the treatment of environment, HP along with all the other computer manufacturers is also responsible, for a much graver SCR failure. This refers to the toxic waste being dumped in developing world through the computer recycling programs. Since HP is in the forefront of recycling effort, this may infact translate in to a larger scale negative performance unless the recycling efforts are not managed properly. According to a BBC news report, it is estimated that by 2010 there will be over 300 million computers that will need disposing of. These e-waste contain wide mix of toxic substances such as lead, mercury and arsenic which are deadly to humans and animal life (Takatsuki, 2006). What is worst is that the majority of the dispose computers that are to be recycled in third world countries, often illegally and the practices used are cheap, crude and very hazardous. Reports from China reveals that children, women and men use their bare hands to tear about the computers and they inhale the toxic fumes when plastic is being melted or metal components are being extracted. The balance waste is disposed in landfills which will contaminate the waterways and soil. The contamination of air, waterways and soil in China and India where these recycling activities of foreign e-waste takes place is beyond humanly tolerable levels (Recycling of Electronic Waste.., 2005). Although the Basel Convention deters developed world from dumping toxics and waste products in to third world countries, USA is yet to ratify it even though it is probably the largest contributor towards e-waste. European Union is currently drafting new laws that requires safe and ethical disposal of e-waste while undertaking the responsibility of disposing national waste within national boundaries (Takatsuki, 2006). According to a report collaborated by many authors representing environmentalists, called Exporting Harm: The High-Tech Trashing of Asia, the dire situation of computer recycling programs contributing to toxic waste in China was shocking. Thousands of children and workers were exposed to toxic waste in recycling waste sites such as in Guiyu, China. According to Greenpeace reports, “the scrap sites here are a profusion of technology brand names; HP, Dell,Compaq, IBM, Apple, Sun, NEC, LG and Motorola” (Toxic Tea Party, 2007). The ground water contamination in areas of these waste sites has reached a stage where water can no longer be consumed. The report further reports that river samples containing 190 times the accepted pollution levels approved by the World Health Organization standards (Much toxic computer.., 2002). While law makers are aware of and have raised legislature to ban dumping or incinerating cathode ray tube monitors in California and Massachusetts, reports indicate that as much as 50-80% of electronic waste that is being collected for recycling in America is shipped to third world countries. Being in the forefront of world computer recycling efforts, HP too can be blamed for these negative and unethical treatment of not only the environment but the inequality of subjecting poor people from the third world to toxic waste involved in the recycling process. A large number of people are affected by the toxic substances involved in manufacturing computers and the environment, children and future generation are to suffer from unsupervised and mismanaged recycling efforts that are driven by economic motives. According to the head of Silicone Valley Toxic Coalition, -Ted Smith, countries such as Japan and some of the European countries have developed their own well organized and safe systems of electronic recycling without passing their e-waste to poorer nations, although at a high economic cost (Much toxic computer, 2002). It would be a good CSR practice for HP to initiate and spearhead such a national level program with the coordination of other industry giants such as Apple and Dell who are already looking for ways to improve their environmental impact. 4. Conclusion From this evaluation it is evident that HP is engaging in high profile social performance in safeguarding environment, promoting energy conservation, attempting to incorporate green concepts in to new product development etc. These efforts are indeed admirable and rather notable given the awards and accolades received by the company. However, the behind the public eye, there can be negative social performances resulting from the unmanaged channels of recycling which diverts the disposed computer waste to third world countries. While HP may not be the only party responsible for this toxic dumping and HP may not be directly sanctioning these activities carried out by middle links in the disposing channels, being the number one computer and electronics manufacturer in the world. Works Cited: Cook, M. 2004. Old Computers and Toxic Waste. UBC Reports. 50 (10) http://www.publicaffairs.ubc.ca/ubcreports/2004/04nov04/toxic.html (accessed August 25, 2010) Freeman, E. R. 1984. 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