This report contains the major corporate social responsibility and environmental issues that the company will encounter when it relocates to India, a developing country. With the changing times, there is a lot of pressure that mounts on companies from the stakeholders i.e. the employees, customers, governments, the communities, and the locals of the areas in which they operate. The expectations of the stakeholders for the companies to make beneficial contributions to their societies, make positive changes, are part of corporate citizenship.
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In this regard, this report was requested by the company’s Chief Executive Officer. This report contains the corporate social responsibility issues of human rights, environmental concerns, employment of locals. On top of highlighting these issues, the report has also given recommendations on how they can be addressed and also the potential benefits that the company stands to gain by handling these issues accordingly.
Corporate social responsibility is also considered as corporate citizenship or corporate responsibility and principally involves the responsibility of business and corporate organizations and institutions to consider the social, economic progress of the communities in which they are instituted and run by taking care of the impact of the activities and operations on their clients, suppliers, employees, shareholders, and other stakeholders and very importantly the environmental impacts. This is voluntary responsibility that ensures that the business complies with the rules, regulations, and principles of business of the said country (Garry Crystal, 2008).
India being a third-world country, experiences several challenges including slow economic growth, unemployment, pollution, poverty, corruption, and many legislative hurdles in the registration of businesses. Corporate paternalism plays a very important role in shaping the community, prospects of progress in India besides the pressure mounted by civil society, the government, and the consumers, the local communities have been at the forefront of being off due watchfulness since they are most affected in this line (Atul sood,Bimal Arora,2006).
The employees should be involved through motivation and company support of various programmers including saving schemes, retirement savings, and reasonable access to information, legitimacy, and recognition since the employees are the ambassadors of the company, representatives of the community, for job enrichment and personal satisfaction. The company should open itself up to global stakeholder initiatives, this will involve the locals hence the feeling of ownership of the company in a way and any adverse effects might as well affect them. Among its key strategies is total responsibility management which still provides a big challenge to many business co-operations. The company should not play the ball too fragmented, from the defensive position towards stakeholders to an affirmative, integrated approach in solving issues arising internally and externally. The company should measure the social impact, value chain production/supply, and competitive context investments for self-regulation and meaningful growth.
The Company should also declare its asset and financial capitalization in the country and fully follow the code of conducting business in the country since any intent to hide revenue sources, failure to remit taxes, and other illegal underworld malpractices will not be condoned due to the changing political regimes and investment interests. An exemplary case is of an American Bank which pleads guilty in court and paid $16 million to clear criminal charges against it for unlawful transactions with Augusto Pinochet, the Chilean dictator involving his assets.
The company should also ensure that it makes its transactions transparent and avoid off-the-book transactions failure of which stands as a liability and may be charged both in that country or another country through which such transactions have been wired. The company should also ensure that it does not get involved in the rampant corruption of third-world countries like India. This will still be detected however carefully it has been done. Such cases remain as liability risks for the company and should be kept at bay by all means including water-tight fiscal payment and asset acquisition systems, employees should be advised against the same since the image of the company is almost everything when it comes to business competitiveness and performance. The company should be very careful when engaging security personnel to act on its behalf and any cases of high handedness can create a history of abusive conduct or legal suits in case such uncalled for security brutality involves abduction, beatings, rape, and even killing
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The company should also consider the following factors as being critical for its success in India: The Company’s management and leadership should demonstrate a belief in stated values, principles, purpose, strategy and practice, whole company consensus, and constant reinforcement of the same to avoid controversy and complacent practices. The company should also create effective and continuous communication procedures and an oversight decision-making board, it should engage the stakeholders effectively and be ethical in its operations and performance reporting.
The company should integrate human rights into business practices to improve stakeholders’ relations, company’s reputation, reduce business risk, engaging corporate power and business climate. Human rights protection policies should be reinforced and the company stands a good chance of business development partner rating in the market.
India is a religious country that practices several doctrines which the company needs to respect including equal measure respect for all the stakeholders including
India’s communities, values like community service, and philanthropy in its activities and events. This stems from the traditional heritage of their influence and paternalism among its traders. The government of India has also put in place a raft of legislation on corporate social responsibility which is socialistic in governing the labor laws and the society. These legislations include equitable distribution of the acquired resources, checks on the importation, control on foreign exchange, protection of the small entrepreneurs, industrial license, and quota system for raw materials and scales of production. These rules and regulations have been the basis of drafting subsequent business legislation in India since its Independence in 1947. These legislations ensure social behavioral control in business and the public, reduction in corruption and government bureaucracy.
The different trade unions in India equally advocate for the rights of the people beyond salary at the workplace leading to improved service delivery and better living standards. A lot of pressure on corporate social responsibility has been put on the export-led sectors and the supply chain businesses. The company’s view of its stakeholders is very important since respect deserves respect but any carelessness in handling the company and issues involving the stakeholders may be very risky. The Company should ensure that the stakeholders are effectively and reasonably involved in its activities. These stakeholders include: Investors, Customers, trade Unions, Suppliers and Contractors, local community, local government, National Government, International agencies, Media, Religious groups, Academics, and the ethical rule regulators
The company should consider the key prerequisites for successful partnerships including shared common purpose, mutual respect for every partner, shared investment, and accountability, evident inclusively besides shared partner commitment.
Even though there is increased clamor for corporate social responsibility globally, the legislations on the same are not institutionalized in India. This means responsibility is principally internally driven within the business agenda with very little government emphasis. Employee care is an ethical undertaking of the businesses to their discretion. The principal challenge for the government, India’s citizens, and the business community are to develop and nurture vibrant civil institutions responsible for developing the corporate community and their markets which will ensure that the companies increase their corporate social responsibility for the success and development of all the stakeholders.. (Atul Sood, Bimal Arora, 2006).
The business should avail ready information for quick decision making and avoid any form of ambiguity that might lead to public discord and dissatisfaction. This will also lead to the right business decisions being taken both by the material, labor supply, and market availability (“E” Choupal, 2000).
The business is likely to experience infrastructural inadequacies since most of India is rural. This incubuses power supply, telecom connectivity, and bandwidth besides a largely uneducated population.. (“E” Choupal, 2000).
The agricultural sector is one of the major economic pillars of India. The business therefore will as well play a significant role in the development of the sector which may include investing in farm mechanization as part of its social responsibilities in achieving sustainable development through agriculture and local energy production schemes from the plant remains as bio-fuels which is a major challenge for this Least Developed Country. The business should develop a sustainable pollution control strategy to avoid any kind of adverse government legislative actions like closing the business down. This is exemplified by the closure of the Coca-Cola Kerala Plant in 2005 by the Government, an action which was advocated for by the Pollution Control Board in Kerala, India. Other serious cases include the case of toxic fertilizers given to farmers by the same company (Business Respect, 2005).
The business should also operate within the set rules as stipulated in the document, “Green Paper Promoting a European framework for Corporate Social Responsibility” (Mineral Resources Forum, 2003).
Corporate social responsibility is necessary since it ensures the protection of human rights through regulated labor laws and corporate development of employees for profit maximization. It is also a business promotional tool by which a company’s credibility and responsiveness are measured and identified. The company should take careful steps towards the displacement of the local communities and that they are involved in every stage of the company’s development within the local; community without any discrimination of any kind. The company will be avoiding any legal suits against violation of human rights if it decides to use forceful eviction of the local communities, which is a crime under international law. Liability cases may be equally faced if construction of infrastructure and exploitation of the resources in on the land. Legal battles involving forceful evictions have been faced in several third-world countries few other notable cases in the first world.
India is a very good country in terms of the availability of resources, opening its economy to foreign investment and cheap labor. The latter has been a very thorny issue with several companies facing internal staff rebellion, go-slows, strikes, and even lawsuits in many countries. The most notable cases that have seen the light of the day involve forced labor. Temptations by companies to use sacking as blackmail to forced labor may be very costly both financially and to the reputation of the company. An American company farming rice in Siaya District, Kenya, was sued by the workers for forced labor, a case which created a lot of tension between the local community and the company with the locals demanding immediate termination of operation of the company. The case was later settled out of court and the company agreed to be more cautious about labor laws and to get involved in the community development.
Corporate responsibility also ensures that the business neither remorselessly pollutes the environment nor depletes the resources. This concept also helps governments identify with partners with the countries of origin of these businesses. The company should manage the impact of its activities in the following ways: Practicing ethical business principles to avoid disobedience to the law of the country, Cooperate with the various government departments responsible for labor and employment and human rights advocates, market its product responsibly through staff codes and behavior, management and philanthropic activities within the local community, develop business operations and undertakings as per the stipulated legislation on the same, initiate and sustain a responsible social, economic and environmental policies agreeable to the country (Chris Marylyn, 1993).
- Atul Sood, Bimal Arora. 2006. Class PowerPoint Notes.
- Chris Marsden.1993. Class PowerPoint Notes.
- Garry Crystal,2008. Class PowerPoint Notes
- “e” Choupal,2000. Class PowerPoint Notes.
- Mallenbaker.net.2005. Corporate Social Responsibility. India: Coca Cola ordered to close Kerala plant.
- Paul Allen.2005. Class PowerPoint Notes.
- Time Foundation. 2008. Corporate Social Responsibility.