Corporate Social Responsibility – Nike

 

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Corporate Social Responsibility-Nike

Essentially, Corporate Social Responsibility Nike (CSR), is a concept in management which states that organizations must integrate social and environmental concerns and find a common ground that maximizes profitability and reduces adverse impacts to the outside world. This is done by improving business operations and ensuring that all stakeholders are taken care of.

Organizations over the world started CSR begrudgingly due to regulations but now companies are taking a more proactive approach to ward off more regulations and to appease their various publics.
CSR has evolved over the years to become a more inclusive and broader term. There are six core characteristics that define corporate social responsibility as per the narration of our Dissertation Writing Services.

Voluntary

CSR is voluntary and exceeds the extents prescribed by law. The governments over the world expect large organizations to go beyond the basic requirements and voluntarily do more to be socially responsible entities. Companies have come to expect this as the norm and voluntarily double their CSR efforts to ward off further stringent policies and laws.
One such example is that of companies in UK propagating the code of responsible practice before laws could be enacted to define CSR for them. (Gardner, 2006).

While the voluntary activities are considered a positive aspect of CSR’s characteristics by most critics, some claim that attention should be more focused on the regulations and the implementation of law by all companies.

Internalizing or managing externalities.

CSR includes looking at the effects the organization has on the outside world and minimizing the damage caused. The economic impact of the organizations operations are borne by others and companies increasingly voluntarily work to mitigate the effects.

One such effect is pollution which is an adverse impact on the local communities where the firm is located. This is typically managed by regulations dictating companies to internalize the cost of pollution but would be better accounted for by investment in green technologies. Such an approach is more proactive and therefore more beneficial all around. One example is the league of UK NGO’s including WWF, Amnesty International and Action Aid that work towards reducing the negative effects of company actions on the environment. (Husted & Allen, 2006)

Internalizing also includes ensuring that actions like downsizing do not have social and economic impacts that prove too devastating for the company.

Multiple stakeholder orientation.

While previously firms focused on the effect of their actions on building up shareholder value, they now focus on the effects on a variety of stakeholders. This is a relatively new school of thought and is based on the fact that the companies depend on all stakeholders and must consider their interests as well. These include consumers, suppliers, pressure groups etc. As we go down that road of knowledge, our Essay Writing Service takes you deeper into its pitfalls too.

Alignment of social and economic responsibilities

While the trend to look after all stakeholders has increased, the flip side of the argument is that organizations do have the responsibility to maximize shareholder value and must do that alongside. There for the concept of aligning social and economic responsibilities is a core characteristic of CSR.

This is further helped on by the fact that now being responsible is to be profitable as well. Consumer care and using safe raw materials can avoid future law suits. Using green technology cuts down on costs.

Practices and values

It is important today for consumers and other pressure groups to e convinced that organizations follow their set policies and they are not just words on a paper, there to maintain a public image.
The underlying values are to be internalized.

Beyond philanthropy

Finally, the new concept of CSR states that they firm is not being benevolent in its socially responsible actions and that these are not outside the boundaries of business. CSR now includes managing the firms processes to ensure minimum damage to the environment.
A marketing firm must now disclose the truth about the products attributes and not fool the consumer and this is included in CSR. Thus CSR is built in the company’s mechanism and business model rather than bolted on. (Grayson & Hodges., 2004)

Thus CSR has evolved to become a more inclusive concept impacting a wider array of people. However, how it is perceived in different parts of the world and different industries still varies.

CSR in different organizational contexts

CSR is differently managed by different organizations and sectors in the economy.
The three major economies are the private sector, the public organizations and the civil society.

CSR and the private sector

The business world is particularly impacted by the CSR of companies. Particularly in organizations where ownership is separate from management, the paid managers have to walk a fine line between managing society interests and maximizing stakeholder values. (Bearly & Means, 1932)

Another important consideration is of the size of the organization. Larger firms find it harder to please the various groups and undergo scrutiny from society constantly. These companies are more likely to have formal written statements regarding CSR, a structured approach to the process and effective reporting of its efforts often through a separate annual report.

Separate teams or even entire units may be created to manage CSR.

SME’s however, have a different approach. One research claims that in the Netherlands, twenty percent of the SMEs created detailed CSR reports while sixty two percent of the bigger organizations do that. (Graafland, et al., 2003) Thus SME’s are less structured and more ad hoc in their approach to CSR due to relaxed management and less visibility in the media and publics.

SME CSR is more built into their processes and systems and a key factor is the organizations relationship with its customers. (Spence & Schimidpeter, 2002)

CSR and the public sector

In some economies, the government has a large economic role, providing 40-50% of goods and services to GDP. Thus these organizations are treated like any other and face the same demands. Increasingly, government organizations are including a gender balance and environment protection programs.

Some analysts claim that the demands on the public sector are even greater still due the nature of the business, that is, service providing as opposed to profit generation. (Seitanidi, 2004) Furthermore, many of these organizations are large and the only service providers in their relevant industries as they are the incumbent players. Thus only they can have the required impact and are always visible to the public.
For example, BBC has started to report their CSR activities in detail.

The world over, businesses are becoming more independent in their CSR efforts. Efforts like the European Alliance on CSR show that business are stepping up to the occasion. (Gardner, 2006)

NIKE

NIKE is a renowned brand symbolizing sports, making sports equipment and sportswear and commanding a global market.
NIKE strongly believes in creating a sustainable environment for continued growth and that is where its CSR efforts are directed. (NIKE, 2014)

Workers:

NIKE employs 0.8 million workers in 600 factories across 46 countries.
NIKE focuses on empowering its workforce. NIKE helps its workers by developing their skills and teaching them leaner and better work ways and quickly mitigating the problems they face. Thus, it helps its workforce while ensuring that the efforts also make its own production better and less costly. (NIKE, 2014)

Communities:

NIKE invests in the communities it impacts through direct investment of capital and kind. Its 2011 goal was the deployment of $315 million.

NIKE helps its communities through NIKE Foundation, empowering young women across the world, making them change agents. This is done through funding and donations, building the capability of organizations, nurturing entrepreneurship. NIKE Foundation has contributed $100 million so far.

NIKE uses its brand image to fight for the causes close to their consumers. It has contributed significantly to LIVESTRONG and the Human Race, Hurley’s H2O water initiative, Cole Haan’s Penny Harvest and the Converse (Product) RED.
Finally, NIKE believes that it can have a positive impact through what it does best, sports. It has created Homeless World Cup and ninemillion.org to ensure that every able person is brought into the world of sports and can gain its social benefits. (NIKE, 2014)

People and culture

NIKE hosts a degree of workshops in its home town and the country it operates in. NIKE is accountable for the 30,000 employees it harbors. NIKE’s workforce grew by 16% between 2006 and 2009.
A two month survey is conducted to understand what the employees are driven by and try to align their goals with that of the organization.

The survey revealed that the work force was energized and enjoyed their jobs and the company, having internalized the strategy. Some were not quite at the stage but they understand how their job fits into the larger picture. Furthermore, the employees felt valued and comfortable. It also revealed that they had a mentor in the office. Finally, t revealed that there was a positive relationship between the employees and the management.
Thus NIKE ensures that it is sensitive to the concerns of its employees. (NIKE, 2014)

Environment

NIKE recognizes that environmental concerns should be a top priority for any company and makes efforts towards a more sustainable environment. From the big and apparent issues of water scarcity and climate change to small problems like a chemical dump in some area, NIKE realizes that the impact will be shared by all and takes CSR measures to rectify that.
NIKE also believes that climate change and environmental concerns are being viewed as externalities and need to be considered a priority and an essential part of the business plan.

Innovation as a Driver Like in its products, NIKE believes that innovation is the key to environmental solutions like the challenge of conservation of energy, preservation and purification of water sources and new methods of recycling and reusing products.

To formulate a long term plan, NIKE set a benchmark of an ideal organization that produces and markets sustainable products and is therefore sustainable itself. The Natural Step assisted the company in setting the benchmark. Through this point of comparison the company can now compare its performance to the ideal and identify which CSR methods would best mitigate the problem.

NIKE redesigns products and processes so that it may carry out with CSR. At the same time NIKE does not believe in reducing one’s profitability through CSR. For instance, if NIKE invests products which may reduce chemical damage, it saves itself money in the future. NIKE calls such advertising and manufacturing as Considerate Design.

NIKE carries out many initiatives to ensure environmental sustainability. NIKE’s founding principles include the reduction of wastage. NIKE is a company that always praised the proper disposal of waste products. One of the founding members actually redesigned the famous NIKE shoe, keeping only what was very essential to the runner and removing everything else to allow minimum wastage.

Thus NIKE continued the efforts of minimum wastage with the founding philosophy, “eliminate what is not critical.” (NIKE, 2014).

Public Policy

NIKE carries out a somewhat unique CSR initiative known as corporate social responsibility Nike, public policy. NIKE is an advocate on many matters of societal concerns but it continues to adhere to its own principles and the views of all stakeholders.

NIKE has a government relations team prepared to interfere in case help is needed. Using the resources and the brand image, it helps raise awareness for six public policy issues; tax and intellectual property, employment, supply chain, sustainability and sport. kuj NIKE must strike the right balance between trade and poverty alleviation.

All policy making and decisions are taken after discussions and debates and simple, easily communicated policies are preferred. (NIKE, 2014)

Recommendations

Ecological Responsibilities:

NIKE’s ecological efforts are commendable. The analysis of NIKE’s policy reveals that it is a well-established in its efforts and truly internalized the need for waste reduction through its various polocoues. Being a global brand,

it has already taken many steps in this regard. However, it can further ensure that it manages the environment better through reanalyzing its supply chain and ensuring that renewable raw materials are used. It can further ensure that the processes it undertakes are friendly to the environment and streamlined to minimize wastage. This is a continuous process as technology evolves and must be updated regularly.

Social welfare:
NIKE can ensure that it is socially responsible and comes to par with consumer expectations by reevaluating the factories where its products are manufactured by the third world countries and ensuring that steps are taken to minimize the risk to workers in these places.

Third world countries in particular may be harboring issues like child labor that NIKE consumers feel strongly about. Setting up an audit committee to ensure that these issues are taken care of before serious damage is done and the media gets wind of it is one way for NIKE to become more socially responsible.

Recruitment and retention of employees:
NIKE employs the best minds in the industry. The reputation of the firm alone commands respect from fresh talent. To ensure that NIKE continues to hire and retain this talent, it must ensure that it takes relevant steps.

To begin with, NIKE could market its CSR efforts not through annual reports alone but also through social media and promotional videos that reach young people.

Secondly it can set up a forum for employees to pitch in their CSR ideas and follow through with the good ones to ensure employees feel heard and are retained. The current system to hear out employee ideas is once in two years, this must be revised to an annual system. Furthermore, employees should be asked to champion these projects to help them engage with it more and feel further motivated.

Conclusion

As a whole Assignment Writing Service end with the final note that the CSR’s new definition of responsibility beyond philanthropy and continuous CSR through business processes is a model that will work for businesses, employees, stakeholders and the environment.Since large companies are always subject to public scrutiny and are generally more structured, NIKE exercises voluntary CSR, that is, it goes beyond the prescribed law and does more for the people,society and the communities it impacts.

NIKE takes ample measures to ensure that all concerned groups are satisfied and that the company goes beyond basic CSR models to influence policies using its brand power and resources to create a positive impact.

However, NIKE could improve its CSR by ensuring that the policies and practices match, that employees are given a greater say in its CSR activities, use new media to promote its CSR and thus establish an even better name in the industry and to ensure that proper audits are carried out in the third world countries to ensure that work standards are as per NIKE standards. Any slip in the kast nett…