The New Balance Company’s Analysis

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Introduction

With a history of over a hundred years, the New Balance Company started as the organization that produced shoes for people, who were incapable of using standard footwear due to health issues. William O’Riley founded the organization in 1906 and started expanding into the sports industry three decades later, producing “custom shoes for running, baseball, basketball, tennis and boxing” (New Balance: Developing an integrated CSR strategy, 2010, p. 2).

The steady growth of the company triggered an unbroken string of success over the next few decades, which encouraged the leader of New Balance in 1990s to launch a series of acquisitions, “involving various bands such as Dunham, Warrior and Brine” (New Balance: Developing an integrated CSR strategy, 2010, p. 3), to name just a few.

However, in the realm of the 21^st century, the company has experienced the need to redefine its approach towards the organizational behavior standards, customer relationships and its values. Particularly, the introduction of the CSR principles into the framework of New Balance’s operations is currently being considered as an option. The significance of adopting the specified approach is defined by the factors such as human and labor right violations, environmental challenges, health and safety of the staff, etc. (New Balance: Developing an integrated CSR strategy, 2010, pp. 4–5).

While the application of the CSR principles in the environment of private ownership, which the company used to be, was comparatively easy, the transfer to the CSR approach for a global organization, which New Balance became in 2010s, is fraught with major difficulties. Primarily, the necessity to introduce the principle of the corporate citizenship into the organization’s framework, the need to design tools for assessing the changes in the company’s performance inflicted by the CSR principles adoption, etc., needs to be addressed.

Strengths and Weaknesses

Strengths

Overall Governance

A rigid set of values and ethical principles;
A range of CSR initiatives;
Incorporation of the CSR strategies into the organization’s operational framework allowing the company managers to provide leadership for the entire industry (New Balance: Developing an integrated CSR strategy, 2010, p. 11);
Creation of the Responsible Leadership Steering Committee;

Products and Services

Addressing social needs;
Enhancement of the product life cycle;
Exploring the possibilities of recyclable and renewable raw materials for the company’s production related purposes;
Out-of-the-box thinking;

Operations

Responsible business practices;
Waste reduction;
Significant drop in New Balance’s expenditures;
Responsible leadership;
Recent engagement in the BCCCC research for carrying out a CSR assessment of the company’s operations and defining the further course of development;

Community Support

Active volunteering o the company members;
Efficient strategy for addressing social challenges;
A rather rigid set of principles of concerning staff satisfaction, putting a very strong emphasis on the need to maintain high rates thereof.

Weaknesses

Overall Governance

Communication impediments and the resulting drop in the company’s performance;
Poor connection between the company’s production processes and green strategies;
Lack of tools for measurement of the green strategies’ effects and tools for reporting these effects to the company’s leader.

Products and Services

Dependency on the fashion industry and the need to define the further production process of fashion statements, which are prone to rapid and unexplainable changes;
No access to the life-cycle impacts of the footwear produced by the company.

Operations

The pressure from the current market in terms of HRM, environmental issues, safety and transparency of the company’s key operations slackens the company’s operations down considerably.

Community Support

Company’s inability to implement the principles of CSR in the organizational environment;
Lack of alignment between the community involvement strategy and the business strategy.

Analysis

As the list of the company’s strengths and weaknesses provided above shows, the incorporation of the CSR principles into the organization’s framework is likely to require updating its leadership strategy. Indeed, in order to enhance the CRS principles within a company, one will have to introduce a specific model for the staff to comply with and follow when choosing the required organizational behavior pattern.

According to the existing information, it is the transformative leadership approach that allows for redefining the organizational behavior model and enhancing staff’s motivation. The company, however, seems to have chosen the laissez-faire approach, based on the relationships that it has established between the firm’s managers and its staff. Seeing that the laissez-faire model presupposes a rather loose definition of the corporate organizational structure and offers the employees enough room for making decisions in the field that they work in, the New Balance organization, in fact, follows the basic principles of the laissez-faire approach quite closely.

While the given strategy for managing the work of the staff admittedly has its positive aspects, it is still not quite applicable to promoting change within an organization. Consequently, the introduction of the transformative leadership approach seems the most reasonable step to take at the specified stage of the company’s development.

The lack of connection between the green principles, which the organization pursues, and the actual line of actions that the New Balance organization adheres to, can be addressed with the adoption of the sustainability principle. Seeing that sustainability as a concept presupposes not only addressing the environmental concerns that the organization is facing, but also improving the cohesion between the departments of the company, working on the communication process and facilitating a well balanced distribution of the organizational resources among the departments of New Balance, it is desirable that the concept of sustainability should be incorporated into the framework of the organization.

The specified strategy appears to be all the more important for the company to adopt as the link between CSR and sustainability is explored. Creating the premises for successful introduction of the CSR principles into the company and the building ground for the staff to accept and train the newly acquired CSR related qualities, the principle of sustainability is an essential addition to the New Balance’s set of strategies.

As far as the products and services of the company are concerned, the dependency on fashion, which New Balance is unlikely to ever get rid of, can be leveled with the use of recyclable materials in the company’s production process. As a result, the access to the life-cycle impacts of the shoes that the Ne balance Company produces can be attained through a careful analysis of the environmental and health related impact that the New Balance shoes have.

Based on the analysis carried out above, one may claim that the emphasis on the Products and Services area, as well as the overall governance of the organization, may help improve the process of CSR principles integration.

One might argue that the consideration of the Community Support realm could be more efficient in terms of the CSR principles promotion. However, on a second glance, the enhancement of the Community Support processes may be viewed as the lack of understanding of the connection between support and CSR. This connection, though often becoming reciprocal, often presupposes that the CSR ethics enhances the community support, and not vice versa (Du, Bhattacharya & Sen, 2010).

Thus, with the improvement of the leadership issue, particularly, the strategies and the corporate values, as well as the reconsideration of the green issues regarding the Products and Services field, may affect the promotion of the CSR in a much more powerful way than any other factor considered above. Once the CSR strategy is adopted, the possibility for improving the communication issues will emerge: “Since creating stakeholder awareness of and managing stakeholder attributions towards a company’s CSR activities are key prerequisites for reaping CSR’s strategic benefits, it is imperative for managers to have a deeper understanding of key issues related to CSR communication” (Du, Bhattacharya & Sen, 2010, p. 9). Therefore, the emphasis must lie on the above-mentioned domains at present.

Implementing CSR

Traditionally, the principles of CSR are implemented in the organization setting with the help of developing a set of strategies, creating a set of CSR commitments and conducting an assessment of the current situation (Corporate social responsibility: An implementation guide for business, 2007, p. 3). In other words, the New Balance Company will have to reconsider its corporate values and vision prior to any alterations in order to promote change among the staff members efficiently.

The integration of the new values and principles of organizational behavior can be carried out with the help of the Responsible Leadership Steering Committee that the company created several years ago. Though in the need for an update, the specified body will help facilitate the integration of the governance department of the company in the process of changing the concept of responsibility among the staff. As recent researches show, the committees similar to the RLSC “have developed various compacts, declarations, guidelines, principles and other instruments that outline norms for what they consider to be acceptable business conduct” (Corporate social responsibility: An implementation guide for business, 2007, p. 7).

In other words, the adoption of the CSR approach allows for boosting the communication process, which, in its turn, will launch cooperation between the firm’s departments and create the premises for the overall improvement of the staff’s attitude towards their job. The establishment of the behavioral model for the staff to comply with, in its turn, will promote the significance of the CSR principles and plant the seeds of responsibility in the New Balance employees.

Conclusion

The enhancement of the company’s performance through the promotion of CSR within the organizational setting is a complicated task that requires major changes in the leadership approach, the corporate values, etc. However, the introduction of the CSR principles spurs the overall performance of the staff by enhancing the communication process and the acceptance of the company’s values, vision and concept of quality. As soon as the organization recognizes the significance of an efficient leadership model and learns the importance of shaping the employees’ organizational behavior, the incorporation of the CSR model into the organization’s framework can be executed.

Reference List

Corporate social responsibility: An implementation guide for business. (2007). International Institute for Sustainable Development.

Du, S., Bhattacharya, C. B. & Sen, S. (2010). Maximizing business returns to corporate social responsibility (CSR): The role of CSR communication. International Journal of Management Reviews, 12(1), 8–19. Web.

New Balance: Developing an integrated CSR strategy. (2010). London, UK: Richard Ivey School of Business. Web.