Discuss the concept of “corporate social responsibility” through the lens of the business organization Unilever.
The “advent of globalization and the recent developments in the fields of technology as well as innovations has drastically changed the way the various business organizations as well as companies transact their business in the present times” (Williams, McWilliams & Lawrence, 2017). It is “a reflection of this particular fact” the concept of “corporate social responsibility has gained prominence in the recent. It is “significant to note that the focus of the various business organizations in the present times is not only finding ways to enhance the amount of profit gained by them” but also on making a positive contribution towards the environment from which they are taking so much (Shaw et al., 2016). Thus, the “various business organizations in the present times try to take the help of various kinds of corporate social responsibility” activities to not make a positive contribution towards the cause of the environment but also to enhance their brand image in the business market (Shaw et al., 2016). It is “significant to note that in the present times the brand image of a particular business organization often depends of the kind of corporate social responsibility” plans they have in their agenda. Furthermore, with the rise of the concept of ethical consumerism and with the increasing focus of the various customers to opt for the products or the services belonging to the business organizations with positive brand image it has become all the more important for the various business organizations to follow the concept of “corporate social responsibility” in the most effective manner (Williams, McWilliams & Lawrence, 2017). This particular report will discuss about the concept of “corporate social responsibility” through the lens of the business organization of Unilever and the activities of Polman as the CEO of the business organization.
The concept of “corporate social responsibility” is a traditional one however in the recent times it has gained much attention on the score of various factors like the increasing awareness of the various individuals towards the cause of the environment, the willingness of the various business organizations to return something to the community as well as the planet from which they have taken the basic resources which were “necessary to bring about the overall growth as well as the development of their business organization” and others (Cheng, Ioannou & Serafeim, 2014). The concept of “corporate social responsibility” more popularly called by the names of “CSR, corporate sustainability, sustainable business, corporate conscience, corporate citizenship or responsible business” can be defined as a “corporation’s initiatives to assess and take responsibility for the company’s effects on environmental and social wellbeing. The term generally applies to efforts that go beyond what may be required by regulators or environmental protection groups”(Kim, Park & Wier, 2012). However, in the recent times the concept has undergone a drastic change keeping in view the changing nature of the business market as well as the world itself and it is a reflection of this particular fact the concept currently even incorporates within itself the various legislations related to the business world as well (Kim, Park & Wier, 2012). Therefore, the concept of “corporate social responsibility” in the present day context can be defined as “a type of international private business self-regulation which is in compliance with the regulatory requirements of the international rules as well as regulations and engages in actions that appear to further some social good, beyond the interests of the firm and that which is required by law” (Bhattacharya et al., 2017). Therefore, it would be apt to say that taking of help of this particular concept the various business organizations rule themselves as a sovereign would rule his or her nation. Thus, it can be said that the concept of “corporate social responsibility” has emerged as one of the most important ones in the present context. In the opinion of many people the various “corporate social responsibility strategies which the various business organizations as well as companies often take the help of encourages them to make a positive impact on the environment and stakeholders including consumers, employees, investors, communities, and others” (Bhattacharya et al., 2017). There are several benefits which the implementation of this particular policy provides to the concerned business organization like the impact which it has on the environment, the help it renders in the creation of a positive brand image, its influence on the customers and others (Aguinis & Glavas, 2012). However, most of the business organizations are motivated by the ethical factor for the implementation of these policies as most of the managers as well as the CEOs related to the various business organizations are of the opinion that it is their ethical responsibility to make a positive contribution towards the society as well as the planet itself from which the concerned business organization derives all the major resources needed for the effective conduct of the business of the concerned business organization (Aguinis & Glavas, 2012).
The company “Unilever” founded in the year 1930 by “William Lever, 1st Viscount Leverhulme, James Darcy Lever, Samuel van den Bergh, Georg Schicht and Singrose” is “a British-Dutch transnational consumer goods company co-headquartered in London, United Kingdom and Rotterdam, Netherlands” (Unilever Global., 2018). The “business organization under consideration here is the 194th largest business organization of the world in terms of the revenue which it generates and the annual revenue of the business organization under consideration here for the year 2017 was $143.9 Billion”(Forbes Welcome, 2018). The company is known for providing quality household as well as personal care goods to the customers from various parts of the world and it is a reflection of this particular fact the company is operational on a global basis. Furthermore, as per a statistic of 2017 the company has more than 169,000 employees in the different parts of the world and products more 400 different brands to the customers (Unilever Global., 2018). Moreover, the business organization under consideration here is “the world’s largest consumer goods company measured by 2012 revenue and is also the world’s largest producer of food spreads, such as margarine. It is Europe’s seventh most valuable company” (Unilever Global., 2018). The below graph provides a few financial details of the business organization under consideration here,
Figure 1: “Financial statistics of the company Unilever”
Source: “Factset, Bloomberg, S&P Cap IQ; Forbes”
The “business organization under consideration here” is facing various problems in the present times on the score of various factors. The primary issue which the organization under consideration here is facing is on the score of the ineffective leadership of its current CEO Polman (Borelli, 2017). It is significant to note that Polman took over the reins of the business organization in the year 2009 and since then the organization is facing various kinds of issues on the score of his ineffective leadership (Borelli, 2017). In the opinion of many people the CEO of the business organization under consideration here instead of using the platform provided to him by the organization to further the cause of the business organization here takes the help of that particular platform to further his own personal interests (Borelli, 2017). In this particular context many people have compared him to the ex-CEO of the business organization Starbucks Howard Schultz who utilized the platform provided by the business organization to protest against the political systems of the other nations of the world (Borelli, 2017). Therefore, it is seen that “the CEO of the business organization under consideration here instead of taking decisions which would have furthered the cause of the business organization” took the kind of decisions which would have portrayed him in a positive light, like the various environmental policies, the harassment and sexual regulations and others (Borelli, 2017). It is a reflection of these ineffective policies of the CEO of the business organization under consideration here that the growth rate of the business organization has considerably slowed down in the preset times. For example, “The company’s 2016 fourth-quarter sales reported in January 2017 grew 2.2 percent which was lower than analysts’ expectations of 2.8 percent. Sales for the entire 2016 year were 3.7 percent below Wall Street’s estimates of 3.9 percent” (Borelli, 2017).
The inability of the CEO of the business organization Unilever to effectively handle the various issues which the business organization in the present times have faced in the diverse nations of the world in which they are operational is also hurting the prospects of the business organizations in a negative manner (Borelli, 2017). A pertinent example of this particular fact is the lawsuit which the business organization faced in the year 2006 in the nation of India on the score of the mercury exposure which the 600 workers of the organization related to the manufacturing of thermometers were exposed to (Borelli, 2017). It is significant to note that the issue received global attention on the score of the lack of concern of the business organization and Polman for this particular issue and the end result of this particular fact was that the business organization along with its CEO had to face a considerable amount of backlash (Borelli, 2017). Another scandal which has significantly damaged the reputation of the business organization in the present times was the sexual harassment which the various workers from the continent of Africa faced in the factories related to the concerned business organization (Borelli, 2017). This particular scandal was brought to light by the “Irish Times” in the year 2011 and is generally considered as another instance which shows the ineffective leadership skills of the CEO of the organization (Borelli, 2017).
The major mistake which the concerned business organizations and its CEO have committed in the recent times was the refusal of the “$143 billion takeover effort from Kraft Heinz” (Borelli, 2017). It is significant to note that following the announcement of the proposal the share prices of the business organization rose by 15% (Borelli, 2017). However, after the news broke that the CEO of the business organization Unilever Polman as rejected the takeover proposal of Kraft Heinz the share prices of the business organization dropped by nearly 8% below the original base price (Borelli, 2017). The rejection of the offer seemed a totally perplexing one at the time as “the offer of $50 per share represented an 18 percent boost from its share price before the takeover bid and it would have resulted in valuing the company at 24 times 2016 earnings” (Borelli, 2017). Therefore, it would be apt to say that the refusal of the offer of the Kraft Heinz for the takeover of the ailing organization was one of the major blunders which the business organization as well as its CEO Polman committed in the recent times (Borelli, 2017).
The concept of CSR has emerged as “one of the most important ones in the present times and the various business organizations take the help of this particular concept to further enhance the prospects of their business” (Grayson & Hodges, 2017). It is “significant to note that this particular concept is utilized by the various business organizations of the world to contribute in a significant manner towards the society as well as the planet from which they derive the major resources which helped them to sustain themselves in the business world”.
Another major advantage of the various CSR policies is that it enables the various business organizations of the world to develop their governing bodies for the effective management of their business activities (Grayson & Hodges, 2017). It is “a reflection of this particular fact that the various business organizations in the present times have developed their legislative as well as regulatory bodies by means of which they handle the various issues” which arise during the course of their business operations.
The tool of CSR is utilized by the various business organizations in the present times to create a positive brand image for themselves(Hopkins, 2012). In the present times it is generally seen that the concept of ethical consumerism has gained significance and does the various customers like to take the help of products as well as services which have been manufactured using ethical means (Ruggie, 2017). It is “a reflection of this particular fact that the various business organizations in the present times takes the help of various kinds of environmental activities” in a bid to create a positive brand image for themselves as in the present times it is seen that the various customers have become very conscious about the brand image of the business organizations whose services or products they are opting for.
In the present times it is seen that a debate has ensued among the various business organizations as to whether they should take the help of the CSR policies or not. In the opinion of many people the present nature of the business world has made it imperative for the various business organizations to take the help of the various kinds of CSR activities (Servaes & Tamayo, 2013). For example, the business organization Unilever can further enhance its business by contributing in a positive manner towards the cause of the environment. Secondly, the business organization Unilever can take the help of the CSR to develop its regulatory body by means of which it can tackle the various scandals as well as issues which would arise in the future times. Thirdly, the business organization Unilever can take the help of the various CSR activities to create a positive brand image for themselves since in the present times it is seen that the customers have become more conscious about the brand image of the various products as well as the services which are opting for.
Conclusion
The business world has undergone a rapid transformation in the present times and it is a reflection of this particular fact that the concept of CSR has gained prominence in the present times. The primary purpose of this particular policy is to make a positive contribution towards the society and the planet in general from which the various business organizations derive the majority of their resources. Furthermore, the various CSR policies also help the business organizations for the regulation of their business and also for the creation of a positive brand image. Thus, it is seen that the various business organizations take the help of various kinds of CSR policies.
References
Aguinis, H., & Glavas, A. (2012). What we know and don’t know about corporate social responsibility: A review and research agenda. Journal of management, 38(4), 932-968.
Bhattacharya, C. B., Korschun, D., Sen, S., & Routledge, H. (2017). Corporate social responsibility. Journal of International Law, 26(2).
Borelli, T. (2017). Unilever and the failure of corporate social responsibility. Forbes. Retrieved from https://www.forbes.com/sites/econostats/2017/03/15/unilever-and-the-failure-of-corporate-social-responsibility/#bb24369498d2
Cheng, B., Ioannou, I., & Serafeim, G. (2014). Corporate social responsibility and access to finance. Strategic Management Journal, 35(1), 1-23.
Forbes Welcome. (2018). Retrieved from https://www.forbes.com/companies/unilever/
Grayson, D., & Hodges, A. (2017). Corporate social opportunity!: Seven steps to make corporate social responsibility work for your business. Routledge.
Hopkins, M. (2012). The planetary bargain: Corporate social responsibility matters. Routledge.
Kim, Y., Park, M. S., & Wier, B. (2012). Is earnings quality associated with corporate social responsibility?. The Accounting Review, 87(3), 761-796.
Ruggie, J. G. (2017). The theory and practice of learning networks: Corporate social responsibility and the Global Compact. In Learning To Talk (pp. 32-42). Routledge.
Schwartz, M. S. (2017). Corporate social responsibility. Routledge.
Servaes, H., & Tamayo, A. (2013). The impact of corporate social responsibility on firm value: The role of customer awareness. Management science, 59(5), 1045-1061.
Shaw, W., Barry, V., Issa, T., Catley, B., & Muntean, D. (2016). Moral Issues in Business. (3rd ed.).Melbourne, Australia: Cengage Learning.
Tai, F. M., & Chuang, S. H. (2014). Corporate social responsibility. Ibusiness, 6(03), 117.
Unilever Global (2018). Unilever Global. (online). Retrieved from https://www.unilever.com/
Williams, C., McWilliams, A., & Lawrence, R. (2017). MGMT. (3rd ed.). South Melbourne: Cengage Learning
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