Corporate Social Responsibility - Literature review Example

Corporate Social Responsibility Student’s Name Subject Professor University/Institution Location Date The 21 st century companies are faced with increasing demands for ethics which are defined by the owners, shareholders, directors, and management. The elements of ethics work alongside the objectives and guarantee the right balance between company’s interests and the rights of the clients, employees, business partners, suppliers and society at large. Ethics trickles down to form a culture which is then operatinalized in the functioning as values, behaviors and beliefs providing predictable pattern actions. Companies which assume strong cultures have subsequently achieved higher results as they promote a focus of the manner and the way of doing things. Corporate social responsibility accounts for integrated self-regulation in the business model. The company promotes a built-in mechanism to monitor and ensure its active compliance to the set law, ethical standards and various international norms. In such cases, embraced responsibilities promote positive impacts of company’s activities in its environment, for employees, communities, consumers, public sphere and stakeholders (Lindgreen & Swaen 2010). These terms have been a spotlight where multinational corporations whose impacts are experienced differently by the general entities occur. The companies do not have to rely on the government to overly regulate them in cross-border, national ands local operations but has to take initiatives according to the overarching precepts set by the all the actors and as per the expectations. The company has to integrate CSR into its mission stands and uphold it in developing and applying principles for different problems and in the business environment. Even when there are no formal legislation developed and enforced, the general will of the company will strive to support the endeared culture, ethics and corporate social responsibility. In the long run the company raise its level of national competitiveness contribute to economic and social development in its regions of operations and prosperous social environment (Andersen & Skjoett-Larsen 2009). British Petroleum (BP) which deals with gas and oil as multinational company is currently the third largest energy and fourth largest company in the world. Its operations in different areas involves exploration and production of gas and oil, It then refines, distributes and markets its products which is rigorous undertakings which require constant and strong measures to ensure that they remain relevant in pursuance of corporate social responsibility, ethics and promotion of a culture in operations. As by 2012, it operated in 80 countries in different parts of the globe with a total of 20,700 service stations. On its environmental record, BP has been named amongst the 10 most worst corporations by 2001 and 2005 by Multinational Monitor (Uhlmann 2010). Its track for human rights and environmental has continued to lag behind. This accounts for actions like hazardous substance dumping, violations of safety and health, air pollutions, farmland damages claims and water oil spillage. BP has the worst safety records among other major oil companies when it comes to industrial accidents. Most of the its actions, 97% are termed as willful violations and this totaled to 760 between 2007 and 2010 in USA operations as identified by OSHA. The company has repeatedly disregarded environmental and safety rules which has risked serious accidents. This is demonstrated by its tendency to ignore the safety policies in its operations. To mention just but a few incidents that confirms it’s unresponsive to safety and environmental regulations, BP have had refinery explosion in Texas in 2005. This resulted to 15 deaths, injures 180 employees and caused massive displacement of the residents who lived near it (Uhlmann 2010). The cause was identified as ultimate resistant of management and executive to maintain safety measure which failed to address engineering problems. BP has the highest fine record in the history of OSHA at $87 million in regard to failure that resulted to that explosion (Lyall 2010). There are various violations still in discussion involving BP. between 20006 and 2010 it has recorded multiple refinery fatalities, leaks and safety violations. This has included employee deaths in 2006 and 2008, through accidents, electrocuted and pipe stack due to mechanical failures. Malfunctioning equipments has also release chemical s in the air to surrounding operational areas. There have been leaks of benzene, nitrogen oxides and carbon monoxide. Residents have joined actions to oppose the release of emissions and suit BP for its harms. According to Lyall (2010), in 2008 BP had Caspian gas leak which then blew out due to bad cementing job. In 2010 there was deepwater horizon oil spillage due to well explosion. As Mouawad (2010) demonstrates, BP in 2012 reached a $4 billion federal criminal charges settlement, the largest of its kind in US. Its criminal proceedings in USA has stemmed from oil spills, explosion and BP itself has pleaded guilty of its 11 felonious acts involving manslaughter, lying to Congress which put them under a four year government monitoring for its ethics and safety practices. In 2010 it was accused of manipulating gas markets through its trading activities in 2008. Bp has been ranked as world’s most responsible corporation due to its openness to dialogue but in recent years, it has slipped in ranking. Its current disaster, the Gulf of Mexico and Texas, environment impacts and workers fatalities may change that view. Increasing cases of worst performance for BP shows that something is lacking on its corporate social responsibility. Corporate activity does not seem to matter as there is no real actins shown or communicated by BP. Company mission should realign to combat the climate change, communicate through the social channels and give back to the local communities. The public relations for BP have not pushed for progressive public image (Fodor & Stowe 2010). Deepwater Horizon oil explosion has been a growing crisis which has recently deal a massive blow to environmental conditions in many miles of the coastline. Edoho (2008) points out that, when a company is under the spotlight of world media such as it has happened with BP, it s talks about environmental care becomes naught where its functions and actions fails its social corporate responsibility message. Even after the company fired its CEO, pay restitution and enhance its drilling standards, it may fail to regain the trust the general public had over it. The Gulf oil spill took three months to be capped with over 4 million barrels extending damages to the ecosystem (Griggs 2011). This has promoted public suspicion over voluntary action and negotiated legislation that promote company’s ethics, culture and corporate social responsibility. As Painia (2012) argues, in late 2010, BP Global has promised to move forward, assure the public and rebuild the confidence following the terrible events. Their strategy in image building accounted for BP commitment to regular progress updates provisions to the public. This would be carried along the available advertising, social media and press avenues. This will ensure that tragedy will never happen and trying to bring everything back on track. However, recent updates have overly been criticized to be more involved with themes of corporate results, major transactions with no health and safety environment release. On the other hand, social media pages have better messages but people are less involved or engaged in BP pages, posts, videos and tweets. The message about economic restoration, environment and public impact is thus less communicated (Muralidharan, Dillistone & Shin 2011). Cherry & Sneirson (2011) observes that, BP has spent much in repairing the Gulf Coast and less resource have been geared to communicating progress which can rebuild its image. The culture of its workers is seen as hesistant and views communication as insurmountable activity. The catastrophe of its kind may change the company forever and shake the brands to depths. BP leadership is required to think about its reputation to the public and not just to their emphasized stakeholders. If such activities are not endeared, it may take longer to build its image and restore trust (Muralidharan, Dillistone & Shin 2011). The company since then has become a laughing stock as its share prices has indicated. In 2011, the BP stock price went down to 35% in comparison to pre-spill levels (Fodor & Stowe 2010). However, the company will need more incentives and try harder to achieve the lost image. According to Frynas (2009), BP’s trashed reputation has demonstrated a truth to most business leaders. Those that are less socially responsible, the society has a way of punishing them. The leaders should promote persuasive case as the consumers are highly alerted and superficial brand position may not influence them at all. This shows that corporate social responsibility is a must and fundamental to business. The incidences of spills and explosions have been an image-changing which possess a challenge to initiatives to change the business. The logo and the message emphasizing green conscious company should be followed by actions that prove so to the people. As Muralidharan, Dillistone & Shin (2011) argues, the era has changed in the way people get access to information. The social media and online communicating has allowed the public to access the information, share it and comment various depending on their viewpoints. According to Cherry & Sneirson (2011), consumers can therefore engage in punishing those businesses that fail to live to public expectations. The companies are expected then to demonstrate authenticity, transparency and speed in actins and this has lacked in BP as relevant qualities. The trend on the most successful business will change from the way it is today. Environmentalist, scientist and the local residents have continued to reveal the immediate and long-term effects of the recent spills caused by BP. The assessed effects of 170 million gallons of flooded oil resulted to injury of more than 8,000 sea turtles, birds and marine mammals (Jernelov 2010). Long-term effects and damage included the dispersant chemicals whose effect may not be known in near future. The months following the oil disaster were followed by rescue crews, wildlife managers and researchers reports of wide-range wildlife impacts. There were oil coating on birds’ feathers that reduced their buoyancy and their ability of regulating their body temperatures. Most mammals ingested oil resulting to internal bleeding from ulcers. Most sea turtles were covered, died and sea corals were reported dead miles from the Deepwater Horizon well. Long term impacts will be felt in wetlands and beaches for years. Creating serious and meaningful restoration plans will prove to be a serious challenge. Some of them will include unbalanced food web for wiping of major consumers in food chains. The fish and wildlife populations are expected to decrease due to death and change in migration trends. There is and also is expected decline in recreation as commercial fishing and other outdoor recreation that was carried by local residents dissipated. State part closure and recreation fishing trips have blown revenue and activities after the spill (Jernelov 2010). Griggs (2011) has observed that, different stakeholders were affected differently by BP oil spill. Most among them were home developers and real estate mangers. The location is the most choices for developers and homes facing the coastline are better considered for recreation purposes. Rental and along the beach front have incurred damages and homeowners will have to deal with repair, replacement and maintenance from oil. The cost of cleaning up is high not counting that they still suffer loss of property enjoyment. They might consider renting or planning another home as the beach is covered with oil. Those living near the beaches are also affected, as business will close since there is no visit to coastal beaches. Hotel, entertaining ad accommodation business has incurred losses along the Gulf Coast. Tourist that had enjoyed summer holidays along the coast will have to relocate to other possible expensive places. Most workers losses their jobs as hotel, tourist and operators industries close along the routes. The most socially responsible business will take the lead as the companies are communicating their corporate social responsibilities targets to their consumers and actively explaining if they fail. Transparency promotes a culture where employees work in reference to company’s values. This can further reinforce the behavior and ultimately become profitable for the business. Having a respectable brand by the public will trickle down through socially responsible initiatives which in no longer optional as it were in sometime past. Conclusively, for a company to create value, it will depend on its corporate social responsibility with established and monitored purpose, impact and benefits. CRS is a possible element for risk management and companies will find it necessary to comply to mitigate their operational impacts, risks and support the external relationships. This will be promoted by strong company’s ethics and culture. References Andersen, M & Skjoett-Larsen, T 2009, Corporate social responsibility in global supply chains. Supply Chain Management: An International Journal, 14(2), 75-86. Cherry, M & Sneirson, J 2011, Beyond profit: Rethinking corporate social responsibility and greenwashing after the BP oil disaster. Tulane Law Review, 85(4), 983. Edoho, F M 2008, Oil transnational corporations: corporate social responsibility and environmental sustainability. Corporate Social Responsibility and Environmental Management, 15(4), 210-222. Fodor, A & Stowe, J 2010, The BP Oil Disaster: Stock and Option Market Reactions. Available at SSRN 1631970. Frynas, J G 2009, Corporate social responsibility in the oil and gas sector. The Journal of World Energy Law & Business, 2(3), 178-195. Griggs, J W 2011, BP Gulf of Mexico oil spill. Energy LJ, 32, 57. Jernelov, A 2010,The threats from oil spills: Now, then, and in the future. Ambio, 39(5-6), 353-366. Lindgreen, A & Swaen, V 2010, Corporate social responsibility. International Journal of Management Reviews, 12(1), 1-7. Lyall, S 2010, In BP’s record, a history of boldness and costly blunders. The New York Times, 7, 12. Mouawad, J 2010, For BP, a history of spills and safety lapses. New York Times, A22. Muralidharan, S Dillistone & Shin, J H 2011, The Gulf Coast oil spill: Extending the theory of image restoration discourse to the realm of social media and beyond petroleum. Public Relations Review, 37(3), 226-232. Painia, B 2012, The Great Advertising Campaign: The Effectiveness of British Petroleum’s Post-Oil Spill Campaign. Uhlmann, D M 2010, Prosecuting crimes against the Earth. The New York Times. A, 23. Read More