Corporate Social Responsibility and Sustainability

Question 1

What are the sustainability considerations relevant to operations management?

Answer 1

1. The environment, employees and/or economic factors
2. The level of world population that should be sustained and the needs of developing countries
3. Ensuring future generations can enjoy the same environmental conditions as the current generation
4. The balance between preserving the environment and natural resources with the need to produce goods and services
5. Organisations must take on responsibility for sustainability themselves rather than waiting for legal regulation

Question 2

How may sustainability impact an organisation?

Answer 2

• Quality: by attempting to reduce waste and rework, an organisation may also improve the efficiency of its production process and improve the quality of its output.
• Process and product design: improvements in operational efficiency should be designed into the production process. Products should be designed to minimise the amount of resources needed to produce them. Where waste is created, it should be recycled where possible.
• Supply chain: an organisation implementing sustainability will look to purchase materials from sustainable sources, and select suppliers that share its objectives and, if possible, are located the minimum possible distance away from it.

Question 3

What can an organisation’s performance on social corporate responsibility influence?

Answer 3

1. Its competitive advantage
2. Its reputation: amoung investors, owners, donors, sponsors and the financial community
3. Its ability to attract and retain workers or members, customers, clients or users
4. Employees’ morale, commitment and productivity
5. Its relationships with companies, governments, the media, suppliers, peers, customers and the community in which is operates

Question 4

What is the difference between corporate social responsibility and business ethics?

Answer 4

• CSR is about responsibility to all stakeholders and not just shareholders
• Ethics is about morally correct behaviour

Question 5

How can CSR and sustainability initiatives affect aspects of a business’s operations?

Answer 5

1. Design and delivery of products and service: Resources used and waste created in the design and delivery stage, plus the use and eventual disposal (and recyclability) of the product by the consumer should be considered.
2. Capacity management: Waste and energy use by the organisation can be minimised if demand is managed and the organisation operates at an efficient level of capacity.
3. Inventory management: Inventory levels should be as efficient as possible.
4. Quality management: Operations should seek to minimise poor quality. If wastage does occur, then materials should be recycled as much as possible and if necessary disposed in an environmentally friendly way.
5. Supply chain managed: Businesses should recognise that they have a responsibility to take appropriate steps to help reduce the environmental impact of their supplies as well as themselves. Large organisations can show some social responsibility by using local suppliers where possible.

Question 6

How can the banking industry recover from the crisis?

Answer 6

1. Strategic choice of customers and markets: Banks must re-evaluate what customers and geographies they can satisfactorily serve well and at a profit. Customer needs are also changing rapidly with a large section of the population continues to need basic products at lower prices and others seeking higher yielding products to support their longer term livelihoods
2. Culture and customer centricity: A genuine commitment at board level is needed to create customer-centric banks together with a recognition that good conduct must link directly to ethics, CSR, personal morality and integrity. Banks must demonstrate that leadership actions, incentives, promotion and recruitment are consistent. Banks must cascade these values and ethics from board level down to all employees and other stakeholders.
3. Product governance: In aiming to achieve the right long-term outcome for customers, banks must move from a product push to a product life cycle approach. i.e. What do consumers need and want? How can we make it?’ Rather than ‘What can we make? How can we persuade consumers to buy them?’
4. Rebuilding trust and reputation: The Banking Standards Board (BSB) was established to promote high standards of ethical behaviour and competence across UK banks and building societies. It states: A successful, dynamic UK economy needs a strong, stable banking sector that serves the best interests of its customers. For the sector to contribute fully to the economy and society it needs to be trusted; not only by its customers (the UK and globally), but also by its staff, by potential employees, by regulators and by policy makers. Trust in the sector has been damaged, and it is only the industry itself, by demonstrating honesty, reliability and competence n a consistent and collective basis, that can rebuild it’.
5. The Chartered Banker Professional Standards Board: (CB:PSB) is a voluntary joint initiative by 8 leading banks in the UK and the Chartered Banker Institute.