A Report on CSR at Brico Devices

Executive Summary:

CSR or Corporate Social Responsibility is a significant part of business organizations today. With the increasing concern over the climate and social issues the companies around the world is taking CSR as a very serious component for the success and future prosperity. With the recent media development on the issues of CSR faced by the company,’ Brico Devices’, it is important for it to evaluate and determine those issues and develop suitable solution for the future improvement and sustenance.

1. Introduction:

1.1. Background:

The newly emerged negative coverage on the CSR activities of Brico Devices has bought forth immense damage to its brand. It has been alleged that the company failed to provide healthy and good working condition for the workers, low pay rates, indulging in activities that environmentally non-sustainable and even disposal of waste in unsafe manner. Keller et al (2011) assert that it is important to for the company to have a strong brand, since it is through the brand equity a business retains and attracts the customers. 

Lindgreen and Swaen (2010) defines CSR aka Corporate Social Responsibility as a process of initiation and responsibilities developed and followed by the companies and other related regulatory bodies for the social and environmental wellbeing. The authors also pointed out that the correlation between a company’s CSR and ‘Brand Equity’ is high, since one of the factors would affect the other.

1.2. Aim of the Report:

• To assess and understand Corporate Social Responsibility and its importance for the modern firms 
• To conduct a CSR audit 
• To synthesize recommendation according to the audit conducted

1.3. Methods:

In order to acquire the aim of the research, the following methods are followed; 

• Assess and understand the meaning of CSR and its importance for the business, through several secondary sources. 
• Conduct a survey within the workforce of the company in order to understand the issues more profoundly 
• Synthesize recommendation after understanding the issues found through the audit

2. Understanding CSR:

2.1. What is Corporate Social Responsibility aka CSR?

As discussed in the introductory part of this report, the CSR is a firm’s initiative to take responsibility for the social and environmental well being. Tai and Chuang (2014) have signified that the CSR activities or the responsibilities are not only developed through a mere company perception over the social and environmental responsibility that have to be initiated, but there is also a dire necessity to consider the regulatory clauses put forth by the governmental bodies and the data provided by the verified environmental protection groups. 

In the current times consumers are not only concerned about the quality of the product they buy, but also the company’s production aspect as well. As Suliman et al (2016) have posited that the modern consumers are not only satisfied with the product quality, but they are also highly concerned over the company’s responsibility over the social and environmental causes. They also posits that seven out of ten consumers today are concerned more on the moral responsibility of the brand or the company they are loyal to, than the product itself. For example, the allegation on the company Nestle over the ‘child slavery’ in Thailand and coco-fields of Africa have bought down 18.7% of the global revenue (Kelly, 2017).

2.2. The Importance of Corporate Social Responsibility:

In the current business world, Corporate Social Responsibility has become a pivotal standard of practice. The CSR has often become a firm’s commitment towards the social and environmental responsibility, which in turn improves the company reputation and brand equity. On the other side, Lindgreen and Swaen (2010) asserts that CSR is one of the most ‘significant strategy’ when it comes to competitiveness; and in order for the company to be successful, developing CSR is not only mere necessity rather crucial, hence it is important for the company to integrate the aspects such as policies and processes, which constitute to the environmental, social, ethical and even consumer rights to become prominent player in the industry. 

Following are few of the importance of CSR, according to Frederick (2008):

• The concept itself would provide the opportunity for the company and its various workforces to contribute to the society and the environment 
• CSR helps the organization in creating and building a positive image that would directly as well indirectly contributes towards its business. 
• CSR would also help in create positive and healthy environment for the employees within the organization, which then results in the productive indulgence of them for the acquisition of company goals.

3. Findings:

There are mainly four areas in which the company is facing problem, especially under the section of CSR. Therefore after a thorough investigation, the issues concerning each area have been discovered and evaluated.

3.1. Poor Working Condition:

After the thorough investigation in to the various departments of the company, various issues have been found that would directly or indirectly affect the employees’ health and wellbeing. It has been found that in the ‘cartridge section’ there is an immense forming of fiber dust particles, which is harmful for the health of the employees in that department. At the same time, it has also been discovered that there are no protective mask and measures provided for the employees in that department while working, and also the majority of the ventilation system are faulty. The same issue has been found in the welding section, where most of the employees are working without proper or sometimes with dysfunctional working and protective equipments, which would put the health of the employees at danger.

3.2. Low Pay Rates:

It has been found that the employees are receiving payments below the minimum allotted by the government rule. Another significant finding is that many of the employees’ promised bonuses and penalties is at stake, and the complaints dropped regarding this by the employee communities has not been discussed or considered by the respective department or even passed to the higher management till now. This failure from the company’s part is causing many of the trained and skilled employees to leave the company, hence increasing the employee turnover rate for the past five months. Another finding is that the employees who left the company is opening up on the internal issues the company facing in the area of work condition and payment issues towards the general public.

3.3. Environmentally Unsustainable Practices:

The company has failed to synthesize an efficient energy management system and policy. For this reason many of the sections or the departments within the company is overusing electricity, which way above the allotted slot. The company is still using a diesel powered electricity generator for its energy backup, which is emitting a considerable amount of greenhouse gas into the environment. Many of the operational and production areas are still using plastics and other non-degradable materials, which are considered harmful for the environment. Currently the company’s environmental and waste disposal policy is outdated, which is the main reason for the recent issues to get more serious.

3.3. Issues in the Waste Disposal:

As discussed in the ‘poor working condition’ section, the cartridge production section is immensely creating fiber dust particles, and due to the faulty ventilation system most of the dust are removed manually and dumped into the nearby localities. There is a high chance that these fiber-dust particles would be carried by the wind towards the nearby streets and residential areas, which would create health issues for the people living around. Most of the employees are failing to follow the waste disposal method mentioned in the packages of these fiber materials, and this mainly because there has been no attempt from the management to educate these employees in these areas. Also as discussed in the ‘environmentally unsustainable practice’ section the company is highly utilizing non-degradable materials for the production and personal usage of the workforce, which then again is not properly disposed by the company.

4. Conclusion:

After the thorough investigation it has been found that the company has several issues concerning CSR, which is then getting affected negatively over its name and the brand itself. The issues includes,

• Absence of proper protection and faulty ventilation system, which is causing unhealthy work environment for the workforce. 
• Dysfunctional and absence of protective equipments in the wielding section, which increases the risk of accidents and mishaps 
• Employees are underpaid amidst of the government rule of minimum wage. 
• Employee complaints regarding their payment have not been discussed or met with appropriate solution 
• Increasing employee turnover due to the failure of management to come with effective solution for the pertaining employee-issues. 
• Ex-employees are spreading about the poor work condition and the payment issues of the company with the general public, which then causing the company’s name and brand to get degraded. 
• Absence of an effective and efficient energy management system, and also high usage of fossil fuel and non-degradable materials. 
• Poor waste disposable policies and process

5. Recommendation:

The following recommendations are put forth for the company after assessing the findings:

• The company should equip more protective equipments for the employees in all the concerning departments. 
• All the faulty ventilation system should be repaired or replaced 
• The management should consider in restructuring the entire payment system, and should release the pending bonuses and other remunerations for the respective employees 
• All the complaints asserted by the employees should be tabled and discussed, in order to develop suitable solutions 
• An efficient energy management system and environmental policy should be developed, and through this the usage of fossil fuel and non-degradable materials should be decreased or even eliminated if possible. 
• An updated waste-disposal policy should be synthesized in order for the effective disposal of the fiber and non-degradable waste materials.

References:

Frederick, W.C., 2008. Corporate social responsibility. In The Oxford handbook of corporate social responsibility.

Keller, K.L., Parameswaran, M.G. and Jacob, I., 2011. Strategic brand management: Building, measuring, and managing brand equity. Pearson Education India.

Kelly, A. (2016). Nestlé admits slavery in Thailand while fighting child labour lawsuit in Ivory Coast. [online] the Guardian. Available at: https://www.theguardian.com/sustainable-business/2016/feb/03/nestle-slavery-thailand-fighting-child-labour-lawsuit [Accessed 13 Jul. 2017].

Lindgreen, A. and Swaen, V., 2010. Corporate social responsibility. International Journal of Management Reviews, 12(1), pp.1-7.

Suliman, A. M., Al-Khatib, H. T., & Thomas, S. E. (2016). Corporate Social Responsibility. Corporate Social Performance: Reflecting on the Past and Investing in the Future, 15.

Tai, F.M. and Chuang, S.H., 2014. Corporate social responsibility. Ibusiness, 6(03), p.117.

Shareholders and Stakeholders

Executive Summary:

The report evaluates the responsibility of a company director to place shareholders interest above other stakeholders’ interest. In order to acquire the objective, the report has extensively investigated the roles of shareholders and other stakeholders. It is important for every company director to place their shareholders interest as primary, and this is mainly because of the significant role they play, unlike other stakeholders, on the organization’s finance, operations, governance and control.

1. Introduction:

There has been long debated among the scholarly and the business community over the role and importance of stakeholders and shareholders. In the 2003 MIT Management Review, Smith has stated that the major distinction when it comes to business practice and business ethics is between the shareholders and the stakeholders. Although, both the elements have a sublime similarity, it is important to conceive both as different concepts itself says Smith (2003). 

In the course of time, the importance of stakeholders or in other words the role of stakeholders is becoming important in the business sector. As Adams et al (2011) asserted the stakeholders are turning into a pivotal consideration point in the business, especially due to the increase in the social awareness and improved business models. 

On the other side the role of Shareholders are widely debated among the business community as well as among the scholarly world. According Fox and Lorcsh (2012), the shareholders cannot be considered as owners of a particular company, at least in terms of legal aspects; even though the philosophy of corporations consider shareholders as the center of their entire business universe. However, Sandhbu (2011) argues that the shareholders are indeed the owners of the companies, or at least needs to be considered them as one. As an example he pitches the existence and the operations of public companies such as pensions funds, mutual fund and hedge fund corporations, where a pivotal role is played by the shareholders in the operation, finance and administration of these businesses. 

Hence it is important to assess and understand in detail each of these concepts and their role as well as importance in the business world. The report aims to evaluate and determine the evidence that the responsibility of a company director is to place shareholders’ interest over the stakeholders’ interest.

2. Understanding Shareholders and Stakeholders:

Since 20th century, the outlook and the definition towards shareholders have persisted within a same set of thoughts and aspect among the business world. Omran et al (2002) defines shareholders as those who made their investment in a business or a firm through the purchase of shares of that particular business or the firm, and has special interest in the success and flourish of that business especially in the financial aspect. Omran et al (2002) also posits that a role played by the shareholders varies in terms of the type of investment they make for the company, for this reason he terms them as active investors and the passive investors. Active investors are those who have profound influence over the company and its operations, while passive investors are those who invest few percentage of their income into a company, pursuing an income on monthly or yearly basis. 

Coco and Ferri (2010, p. 357) asserts that, “the interest of shareholders over the monetary valuation of the company they have invested is immense, since any fluctuation in this area would directly or indirectly affects the investment made on the company by the shareholder.” For this interest it is important to assume that there is a greater pressure from the shareholders over the company directors in the business operation, especially for the increase of the share-price so that their value of dividend would also increase with it. Through this their financial positions are improved and above all secured. 

In another aspect, the investment made by the shareholders into a business is often liquid and mostly temporary as per Green (1993). The temporary period is mainly due to the form relationship that the shareholders have with the company. As Green (1993) asserted anytime an individual can become a shareholder of a company, and at the same time he or she can sell of the share at any moment for the purpose of a quick profit. Also the same investor would have multiple shares of multiple companies, which legally as well as in the business angle would never make them an owner. Hence, as Fox and Lorcsh (2012) argued that the shareholders would never become the “owners” of the company can be affirmed here. 

Stakeholders on the other side, have a different kind of investment towards the company. Harrison et al (2010) says the stakeholder’s needs to be considered as an investor in the company, but the traditional notion of investment does not totally comply with the stakeholders’ investment within a company. In another perspective, stakeholders are individuals who has stake in the company’s success as well as failure, and this can be comprehended through numerous reasons. In one perspective there is a significance of stock holders and their involvement as a stakeholder and on the other customers of a company is also considered as a stakeholder, since they have a dire part to play on company’s success and failure. Harrison et al (2010) states that even communities that relies on the firm for employment, suppliers that relies on the firm for the contract of several services and even employees that is working within the firm, and who are dependent on to the firm; are all stakeholders in one way or the other. 

Unlike shareholder, stakeholders, according to Adams et al (2011), are integrated by longevity. This means, for a stakeholder it is not easy to make a quick decision to take their stakes away from the firm they have invested upon, since many of the elements are legally bonded with the company. As Adams et al (2011, p. 1337) stated, “There are set of factors that is imposed upon them to make them rely on the company, and this includes cultural and geographical aspects that decide the success or failure of the company, in which the stakeholders have a major part to play.” For this reason, it is not only the performance of the firm that stakeholders are interested in, but also the external factors and the secondary impacts that would mould the performance of that firm.

3. The Contrast in the internal working of a Stakeholder and the Shareholder:

According to Zhong et al (2017), “All shareholders are considered to be the stakeholders, but not all the stakeholders are considered as the shareholder of a company.” Since shareholders are investors and has already invested in a company that make them a stakeholder. As discussed earlier in the report, stakeholders interest always focuses on the success of the company, and here shareholders have the same interest that of the stakeholders, which makes them a stakeholder as well (even though the success aspect differs in both the cases). On the contrary, not all stakeholders are shareholders, and by assessing the stakeholder of a company, this would become clear as per Zhong et al (2017). The best examples of stakeholders are the customers, suppliers and even the employees a company possesses, and it is not necessary that these stakeholders necessary holds actual share or shares of the company. 

Due to the reasons or the causes discussed above, there is a series of conflicts within the interest of the stakeholders and the shareholders of a company. When it comes to shareholders, especially the active or the mega shareholders, have the power or the authority to pressurize the company in certain level (Adams et al, 2011). For example, for their own optimization and increase of the profit they sometimes indulge in controlling the board of directors of a company to utilize a short-term business strategy, and this in some cases might kill the chances of the company’s success in the long run. Apart from it, they also have the freedom to sell of all their shares at their will and invest the same amount in another firm, which makes the position of shareholders all the more important among other stakeholders the company has (Adams et al, 2011). 

When it comes to other stakeholders such as employees and the suppliers, there is a greater or deeper hook they have on the company for its long run and success, since their dependency to the company is greater than that of the shareholders. Due to this dependency of the stakeholders towards the company, it becomes clear that their part as a stakeholder is second to that of the shareholders of the company, since the shareholders holds a greater authority over the company’s success. For the board of directors, the main concern of them is to make their company survive the market and business challenges, and at the same time serve the interest of the shareholders as primary; because for them the stakeholders, especially the employees and suppliers are replaceable. As Smith (2003) asserted, the company view their internal stakeholders, especially the employees and suppliers as something that can be replaced if necessary for the company’s survival. 

This degree of separation or the gap in the preference of the board of directors over its stakeholders is the main reason that pushes the internal stakeholders, especially employees towards the conflict of interest. For employees, their main focus is to move or sometimes fight against company layoffs, specially catapulted on the interest of the shareholders and in some cases for their long term sustainability/survival. Therefore there is a greater degree of rationality that both the shareholder and the stakeholder could invest to secure their self interest, mainly short term in nature, at stake of organization’s viability in the long run.

4. Importance of shareholders: or shareholder above other stakeholder

Although the ownership of the shareholders are debated among the business and scholarly communities, their significance in the business and the business operations are significant without a doubt. According to Harris and Raviv (2010) there are mainly four areas that the shareholders have the power over the company, and they are;

Source: Harris and Rajiv, 2010

• Finance: It is important for every company to raise funds for its ongoing operation as well as for the growth and enhancement. When shareholders invest their money in a company, in return, the company would give the shareholder a certain percentage of authority or control. Harris and Raviv (2010) exerts that the control that the company is giving to the shareholders are not necessarily ownership, since there are many aspects adhered to the term. For example, private firms and startups in some cases would adapt to this method and invite investment into their company for their growth and sustainability. External companies and venture capitalists pursue their investment in these companies in order to acquire certain percentage of share of that company. 
• Operations: When it comes to firm’s operation, the shareholders plays direct as well as indirect role. It is the shareholders, especially the mega-shareholders, which play a major role in electing the directors, who then have the authority to appoint other senior officials; this includes CEO or chief executive officer. Through stock market, shareholders also play an indirect role. They invest in the companies which has the potential to back their investment, for this reason the management of the company would be under persistent pressure for the surplus cash-return towards the investors. 
• Governance: For most of the public companies the board of directors is directly answerable to the shareholders, and it is important for the company to provide periodic financial disclosure of the company to all its shareholders. Some of the crucial decisions of the company are taken and implemented after discussing it with the shareholders. 
• Control: As discussed in the operation section, the shareholders have a greater authority to determine who would control the company. Harris and Raviv (2010) assert that this is one of the advantages of a public company, since decision of the collective shareholders will always be for the success and prosperity of the company they invested upon.

5. Conclusion and Recommendations:

As asserted in the report, the shareholder is always a stakeholder of a company, but a stakeholder is not necessarily a shareholder. The report affirms the significance and the authority of shareholders’ have over the company they invested upon, and at the same time the report also explains the dependency factor of both the shareholder and stakeholder over the company. From this it becomes clear that shareholders stand above the stakeholders of the company. Comprehending this factor, few recommendations are developed for the company directors for the successful future interaction with the shareholders as well as the stakeholders.

Recommendations:

• It is important for the company directors to understand the conflict interest between shareholders and other stakeholders, and strategize the operation as well as governance accordingly. 
• Although the shareholders posit a greater interest for the company, it is important for the directors to bring about balance between shareholders’ interest and other stakeholders’ interest for the long-term sustainability and growth of the company. 
• It is recommended to the directors to assess each strategy put forth by the shareholders, and implements only those that could assure long term success. For this it is important for the directors to conduct meeting with their respective shareholders and extensively discuss on each of the strategies.

References:

Adams, R. B., Licht, A. N., & Sagiv, L. (2011). Shareholders and stakeholders: How do directors decide?. Strategic Management Journal, 32(12), 1331-1355.

Coco, G., & Ferri, G. (2010). From shareholders to stakeholders finance: a more sustainable lending model. International Journal of Sustainable Economy, 2(3), 352-364.

Fox, J., & Lorsch, J. (2012). What Good Are Shareholders?. Harvard Business Review. Retrieved 1 August 2017, from https://hbr.org/2012/07/what-good-are-shareholders

Green, R. M. (1993). Shareholders as stakeholders: Changing metaphors of corporate governance. Wash. & Lee L. Rev., 50, 1409.

Harrison, J. S., Bosse, D. A., & Phillips, R. A. (2010). Managing for stakeholders, stakeholder utility functions, and competitive advantage. Strategic Management Journal, 31(1), 58-74.

Harris, M., & Raviv, A. (2010). Control of corporate decisions: shareholders vs. management. The Review of Financial Studies, 23(11), 4115-4147.

Omran, M., Atrill, P., & Pointon, J. (2002). Shareholders versus stakeholders: corporate mission statements and investor returns. Business Ethics: A European Review, 11(4), 318-326.

Sandbu, M. E. (2011). Just business: arguments in business ethics. Prentice Hall.

Smith, H. J. (2003). The shareholders vs. stakeholders debate. MIT Sloan Management Review, 44(4), 85-91.

Zhong, N., Wang, S., & Yang, R. (2017). Does Corporate Governance Enhance Common Interests of Shareholders and Primary Stakeholders?. Journal of Business Ethics, 141(2), 411-431.

The responsible enterprise in action

1. Introduction:

The main aim of this report is to critically assess the sustainability choice that is available to a business, and also to evaluate the sustainability performance as well as actions of the firm through application of suitable scholarly frameworks. The entire report is divided into five parts, where all the objectives will be critically assessed and interpreted. Apart from it a set of recommendation has also been developed at the end of this report towards the chosen organization. 

With the changing business scenarios, organizations around the globe are facing multi facet challenges, both internally and externally. Jones and Jones (2010) in his book ‘Handbook of organizations’ have asserted on this growing challenges, and according to him the business sectors are becoming complex through the course of time, and this complexity is acting as both challenge as well as the opportunity for the organizations currently. 

In the assignment one, one of the main challenge asserted was on the employee-skills. March (2013) also supports the notion put forth by Jones and Jones (2010); that the challenges within the business sector is significantly increasing, especially the technological, structural and also environmental challenges. In order for the company to overcome, it is important for the workforce as well as the management to equip the skills and ability required, in order to adapt with the change itself. On the other side empowering the employees and the management would not only makes the entire organization capable of facing and overcoming the scenario, but also would help the firm to acquire competitive edge and market leadership as well. 

Another important address made in the assignment one was on the growing demand for the quality and the productivity. According to Goetsch and Davis (2014), quality is the degree in which the customers believe that a particular product has met and sometimes even exceed their expectation. For example, today when a customer purchases an Apple smart phone or an Iphone, there are few expectations adhered in the customers, and the future sales and success of that smart phone has a larger dependency on the rate in which the customers are satisfied. At the same time, it is also important for the organization to meet the demand through productivity once the demand and sales go high with the respective product through sustainable means. Although quality and the productivity factors are indeed posed as challenges for an organization, nevertheless these factors would also pose as opportunity that boosts the organization in its many aspects, including the brand equity. 

Third and the final challenge asserted in the assignment one was on the management of diverse workforce. The term diverse encompasses a wide variety of category, and this includes ethnicity, race, homosexual, elderly, physically challenged and sometimes even community based. According to Harvey and Allard (2015) managing the diverse population or the diversity management is a persisting challenge within an organization. Although there are various scholarly as well as business frameworks developed for the effective management of the diverse population within an organization, accommodating the diverse workforce by acknowledging their difference in their lifestyle, family requirements and work style is still an ongoing challenge for the companies. However, a company’s objective of recruiting diverse population has always been primary due to the potential it brings forth.

2. Strategies to Address the Challenge: 

Every organization has either a collective or individual strategies to address the issues or the challenges ahead. McNie (2012) defines strategy as an action plan structured to acquire a long-term objective or sometimes to overcome an obstacle.

2.1. Strategies for the Development of Employee Skills in Technological, Structural and Environmental areas:

Although most of the companies are indulging in off the job training and coaching sections, it proves to be insufficient, says McNie (2012). This is mainly because the awareness and exposure that the employees are getting during off the job top training are not effective as the on the job, where the employee could comprehend learn through trial and error. 

According to Daley (2012) there are three main strategies for improving or developing the employee skills, and they are mentoring, networking and nurturing.

Source: Daley, 2012

• As per Daley (2012) mentoring is the process of advising and guiding the employee through the work procedure. During a recent interview with the Coca Cola Manager Brandon M. Buchanan, he asserted that the on the job training has more potency than the off the job training (Maya, 2017). As a part he profoundly believes that the act of mentoring is most effective and efficient one. Through mentoring strategy Daley (2012) asserts that the manager or the employer could guide the workforce suitably through real life scenarios and with this it is not only the knowledge that is expanding for the employees, but awareness as well. He also affirms that the employee knowledge and awareness in the environmental aspect of the company and the industry will be strengthened through this strategy. 
• Through the strategy of networking, the employees are able to forge themselves with the organizational culture as per Daley (2012). In a recent article from the popular Virgin Groups, the Chairman and the Founder of the company Sir Richard Branson have emphasized the importance of employee networking. Through this method he have affirmed that the employee confidence level in many areas have increased significantly. 
• Another main strategy proposed by Daley (2012) is through nurturing, and by the term ‘nurturing he meant to provide the right experience to the employees, and make them evolve within it. It is important for the employees to gain knowledge and experience in multiple areas in order to become efficient, and the area includes technological, structural and environmental. For this, nurturing would enable the management to develop the skills in these areas says Daley (2012).

2.2. Strategies for Improving Quality and Productivity by Adapting Sustainable Practices:

According to Griffin (2012) it is important for every organization to improve its products’ quality as well as productivity, since this would contribute to the increase of the customers as well as satisfaction of the employees. With the traditional approach of process mapping, cost-benefit analysis and benchmarking, an organization could acquire the improvement in the workflow, however, in the current context it is also important for the companies to be aware of environmental issues as well while strategizing quality and productivity improvement. Therefore the productivity could decrease the percentage of defects, delay, cost as well as the other environmental issues as per Griffin (2012).

• 

  Source: Griffin, 2012

• Assessing the Process: Through standardization of the policies and procedure in order to improve efficiency. 
• Effective Alignment: The business process should be aligned with the industry standard, especially of the environment and workplace health and safety. 
• Developing Performance Scale: With the use of key performance indicators as well as the environmental standards, the organization should be able to forecast the future outcomes. 
• Efficient Quality Testing: The product should comply with the industrial as well as environmental policies, and at the same time should decrease the defect by a greater percentage.

2.3.Strategies for Effective Management of the Diverse Workforce for the Workplace wellbeing:

Diversity management is not only a strategic requirement for the organization today, but also ethical as well. As Labelle et al (2010, p. 341) stated, “Although the traditional notion of diversity management as an ethical necessity has surpassed, still most of the organizations consider it as an essential ethical element.” However, in the current context, the major importance is given on its potentiality rather than the ethical aspect. As Labelle et al (2010) pointed out; the amalgamation of various cultures contributes to enhancement of creative ideas and experiences. There are mainly three strategies that could pave path to the effective management of the diverse workforce, and they are;  

Source: Labelle et al, 2010

• The recruitment process: An effective recruitment process by providing equal employment opportunity guidelines. 
• Training: Providing effective training and education in order to nurture the skills of the diverse workforce 
• Reviewing the Policy: Ensuring equal treatment to all the workforces.

2.4. How Organizations can become Responsible for the production of Sustainable Products:

Over the past two decades, the significance of sustainability has increased tremendously. Various researches conducted around the world are pointing out the benefits a company could acquire by turning themselves into a responsible organization by producing more sustainable products. Srirangan et al (2012) asserts that by the production of sustainable products, the organization could become responsible mainly in two crucial areas.

• Reduction of Waste: One of the important aspects to adapt to the production of sustainable products is to reduce the waste. 
• Decrease the Risk of Environmental catastrophe: With the emergence of issues such as climate change and global warming, the environmentalists as well as scientists around the globe are asserting to cut down the level of usage unsustainable products. Hence by the production of sustainable commodities, the organization could contribute to environment and its sustainability.

3. Impact of adapting responsible approach over the customers:

The quality of an organization is pivotal in the current business context. As all the business required being responsible towards the society as well as towards the environment they thrive upon. 

According to Maxwell and Van der Vorst (2009) it is the quality of the organization that determines its ability to thrive and survive during the economic fluctuations, and one of the main qualities is always acquired through being a responsible company. By the term ‘responsible company’ the authors asserts on a company that projects quality in all its aspects, especially by giving primary importance to the society and environment; in the second context is also important to have elements such as efficient and effective employees, improved quality and productivity, and also effective as well as efficient diversity management system in order for a company acquire quality. 

According to a recent study, it has been found that companies that produce more sustainable products with quality, and also has an efficient workforce would contribute to the increase of the overall profit and would also boost the brand equity of the company (Allwood et al, 2012). It is also an evident factor that in the current business context, customers are willing to pay more on the sustainable products. 

Today more and more companies are adapting to sustainable and responsible practices, and this is mainly because of the understanding that these two factors have turned into crucial strategies for the business to acquire market leadership and competitive edge. As Allwood et al (2012) stated, today the business organizations around the world could expect a lump-sum return on their investment through practices that are environmentally and socially sustainable. For example, today the consumers in UK and Australia are willing to an extra $3 for a bottle whine that is produced through sustainable practices (Aschemann-Witzel, 2015). It is important to note at this point that these consumers are willing to pay for the products that made through sustainable practices; in fact the figures actualize the fact that they are already buying the products, which was certified as ‘sustainable.’ 

In another study conducted by the Solar City Group over the ’Consumer Trend and Sustainability’, it has been found that 72% of the customers wanted know about the sustainability initiatives adapted by the organization; 75% customers are most likely to buy products from a company that is responsible and are initiating enough effort on the sustainable practices; 82% of the customers are most likely to buy products from the companies that projects Corporate social responsibility than those companies which projects less; and 93% of the customers are aware of consuming the energy and protection of the environment (Solarcity.com, 2017). 

During a 2013 industry-environmental study conducted in the United States by Gibbs and Goel (2013), asserted that 75% of the people affirmed that they buy products from the companies that adopts sustainable practices, 60% of the people said that they read news on companies that are going green; while 72% of the people showed interest in learning on the sustainable practices that the companies are practicing. 

Understanding these perspectives of the customers, it becomes clear that majority of the customers around the world are becoming more aware of the sustainable practices and the importance they give to those companies that are practicing it. And through sustainable practices and by becoming a responsible company there are mainly two advantages or the benefits that it would achieve in the business perspective, an enhanced brand awareness and a competitive advantage (Maxwell and Van der Vorst, 2003).

Source: Maxwell and Van der Vorst, 2003

Maxwell and Van der Vorst (2003) states that, by improving brand awareness, the company projects that they are ‘doing good’ for the environment as well as for the society, since this becomes one of the major pillar not only for the company’s sustainability within the industry but also for its growth as well. Many companies are today integrating their sustainable practices and corporate social responsibility with their marketing campaign. For example, the 2017 TV commercials of Pepsi and Colgate in UK, on the water conservation and the employee welfare respectively caught attention from the viewers. It has been reported that there has been 9.3% increase in the sales after that advertisement is aired in UK (Solarcity.com, 2017).

4. Conclusion:

As discussed in the report, there are tremendous challenges that a company has to face today, and among them adapting to sustainable practice and also being a responsible company is the most difficult one. Although there are various challenges when it comes to adaptation of the sustainable practices by various companies, there are few that are considered crucial and require immediate attention. One of the main issues is the lack of employee skill and knowledge, the other is the improvement of quality and productivity through sustainable practices and third is to effectively manage the diverse workforce. The first two are considered as a direct contributor and the third, an indirect contributor. It is also important to understand that all these challenges pose as a business opportunity in another aspect, hence by finding resolution for each of these issues with suitable strategy, would opens up the opportunity abided in each. The report also discussed impacts a responsible organization would make on its relationship with the customers, mainly through emphasizing growing customer awareness and knowledge on the organizational company practices.

5. Recommendations: 

It has affirmed that the adapting to sustainable practice and being a responsible company would not only bring forth company sustainability, but growth as well. Comprehending its significance and its role in enhancing the business opportunity, few recommendations are synthesized for the company.

• It has been understood through the study that it is important in the current context to improve the skills and knowledge not only on the business and industrial aspect, but also on the environment and sustainable practice as well. For this reason it is recommended that the organizations should equip their employees with adequate knowledge on the importance of environment and on the related sustainable practices that the company is operating on. 
• Improving the quality and productivity of the organization is another challenge that a company could turn into an opportunity. The study has also affirmed that more and more customers are now buying products, which are made through sustainable ways. For this reason it is recommended for the organizations to develop effective and efficient plan to improve the quality of the product and also productivity of the organization through sustainable ways. Integrating quality with suitable ways of production would help the organization in its growth in the long run, this includes enhancement of brand awareness and increasing competitive advantage.

References:

Allwood, J.M., Cullen, J.M., Carruth, M.A., Cooper, D.R., McBrien, M., Milford, R.L., Moynihan, M.C. and Patel, A.C., 2012. Sustainable materials: with both eyes open (p. 384). Cambridge: UIT Cambridge.

Aschemann-Witzel, J., 2015. Consumer perception and trends about health and sustainability: trade-offs and synergies of two pivotal issues. Current Opinion in Food Science, 3, pp.6-10.

Daley, D.M., 2012. Strategic human resources management. Public Personnel Management, pp.120-125.

Gibbs and Goel (2013). SENSE & SUSTAINABILITY STUDY. 2nd ed. [ebook] United States: Perspectives on Corporate Sustainability Among U.S. Adults and Employees, pp.10-11. Available at: http://file:///C:/Users/admin/Downloads/0413_Sense%20and%20Sustainability.pdf [Accessed 3 Aug. 2017].

Goetsch, D. L., & Davis, S. B. 2014. Quality management for organizational excellence. Upper Saddle River, NJ: pearson.

Griffin, R.W., 2013. Fundamentals of management. Cengage Learning.

Harvey, C. P., & Allard, M. 2015. Understanding and managing diversity: Readings, cases, and exercises. Pearson.

Jones, G. R., & Jones, G. R. 2010. Organizational theory, design, and change.

Labelle, R., Gargouri, R.M. and Francoeur, C., 2010. Ethics, diversity management, and financial reporting quality. Journal of Business Ethics, 93(2), pp.335-353.

March, J. G. (Ed.). 2013. Handbook of Organizations (RLE: Organizations)(Vol. 20). Routledge.

Maxwell, D. and Van der Vorst, R., 2003. Developing sustainable products and services. Journal of Cleaner Production, 11(8), pp.883-895.

Maya, F. 2017. Forbes Welcome. [online] Forbes.com. Available at: https://www.forbes.com/sites/dailymuse/2013/06/25/5-strategies-that-will-turn-your-employees-into-leaders/#19d489267f6e [Accessed 3 Aug. 2017].

McNie, E. C. 2012. Delivering climate services: organizational strategies and approaches for producing useful climate-science information. Weather, Climate, and Society, 5(1), 14-26.

Srirangan, K., Akawi, L., Moo-Young, M. and Chou, C.P., 2012. Towards sustainable production of clean energy carriers from biomass resources. Applied energy, 100, pp.172-186.

Virgin Group. 2017. Richard Branson: why you should network. [online] Virgin. Available at: https://www.virgin.com/entrepreneur/richard-branson-why-you-should-network [Accessed 3 Aug. 2017].

Newspaper Analysis: Report (Monopolies, Duopoly, and Oligopolies in Australia)

News Article: Monopoly power driving up prices: SA PM (Sky-News) http://www.skynews.com.au/news/politics/state/2017/08/07/monopoly-power-driving-up-prices--sa-pm.html

Introduction:

It is important to understand the nature of business for various reasons, and one of the main tools in comprehending is through its market structure. Baldwin and Scott (2013), defines the market structure as the organizational and specific attributes possessed by a market. The main focus would be on the pricing says the scholars, however, it is also important to assess the market share of each businesses operating under specific industry in order to determine the kind of market structure they holds says Johari et al (2010). At the same time Carraro et al (2013), asserts that it is not significant to focus too much on the market share of the existing organization within an industry, and their argument is mainly due to the emphasize on pricing they give. Amidst of these arguments and views, assessing a marketing structure requires various variables, hence market share and pricing is two of the equally significant variables. Zhu et al (2009) asserts that there are seven characteristics that aid in identification and determining the market structure, and they are the total number of firms; the percentage of market share held by the biggest firms; the cost divisions; the degree of vertical integration; product differentiation; structure of the customers; and the turn of the buyers.

Figure 1: Source: Zhu et al, 2009

Electricity providers of Australia, especially state enterprise like Energy Australia, are having a monopolistic market structure in the supply of electricity. Energy Australia has the monopoly of energy distribution in the areas including Sydney, Newcastle, Central Coast and some areas of NSW (Council of Clean Energy, 2014). Recently with the unprecedented hike in the energy tariff, the people as well as the various government officials are raising concern over this and demanding an immediate solution over the situation. South Australian Premier Jay Wetherill has affirmed that this price hike is due to monopolistic power held by these companies (Skynews, 2017).

Pure Monopoly and Pricing Power:

For the past five years the energy bills in Australia is skyrocketing. As the sources says that electricity bills around the country is going up significantly without any prior cause (Slezak, 2017). The recent news reports also asserts that the hike was up to 20% in few states, comparing to the time period of 2014-15; making the entire amount in between $300 and $400 (Slezak, 2017). And considering the overall percentage of hike while taking past two decades, it would um up to 60% to even sometimes at 99.9% (Slezak, 2017). With this staggering price hike, and the rate in which it is increasing, it would take a large proportion of an average house-hold budget. According to the Skynews (2017), the main reason that is causing the price hike is due to the increasing network cost that the electricity network companies are incurring. And according to Slezak (2017), these electricity network companies has a obvious monopoly in these areas and regions, where they are the only companies that offers wires and poles for the deliverance of electricity in these areas. For this reason only the electricity companies have come under intense criticism from the politicians as well as from the consumers, by stating they are exploiting the monopolistic power they have through over-investing and putting those burden onto the consumers.

Figure 2: Graph showing price hike since 2011. Source: Slezak, 2017

One of the main aspects that need to be identified through this issue is the market power of monopolistic companies. Hawley (2015), have defined the market power as an organization’s or a firm’s ability to control and manipulate the price of a product or a service within the market, and this mainly done though the manipulation of the level of demand as well as supply. It has been affirmed that the Electrical Networking or the Electrical Companies of Australia are enjoying a monopolistic position in the energy distribution industry; hence as Hawley (2015) defined the market power of a monopolistic organizations, these electrical companies have enormous market power and the capability in manipulating the market-price and thereby increase the profit margin. Merhav (2017) term these companies as the “price makers”, since they have the power to decide and fluctuates the market price of a product or a service without decreasing their percentage of market share. Merhav (2017) also states that the market power is inversely proportional to the number of firms within an industry .i.e. the higher the number of firms lesser will be the market share, and lesser the number of firms created high market power for those firms. As the figure 3 (below) illustrates the number of firms has a greater influence on creating and diffusing the market power. The same can be identified with the Australian Electricity Companies, since the number of firms is less in this industry, which in turn creating a higher market power, manifesting pure monopoly.

Source: Mehrav, 2017

Recommendations:

Understanding the situation it is important to control and bring down the ongoing exploitation of Australian people by the Australian Electricity Companies. According to Child (2013), monopolistic exploitation occurs when an organization take advantage over its customers, and this happens when that organization become the only provider of a product or service towards their consumer segment. The following recommendations are synthesized in order to bring down this situation in future, and provide the Australian electricity consumers with a fairer tariff that they could afford.

• It is important for the government to develop a strong policy to bring the down the rising electricity tariff, in order to prevent the consumers from further exploitation. 
• Enhance the existing unfair contract terms of Australia, and also develop a separate act that would control and bringing down monopolistic exploitation in the nation.

Conclusion:

It becomes evident that market structure, especially monopolistic organizations, has a direct power to control the prices or in other words has an extensive market power. At the same time, it is also important for the respective government of a nation to assure that these organizations are not exploiting their consumers by implementing strong regulations and policies.

References:

Baldwin, W., & Scott, J. (2013). Market structure and technological change (Vol. 18). Taylor & Francis.

Carraro, C., Katsoulacos, Y., & Xepapadeas, A. (Eds.). (2013). Environmental policy and market structure (Vol. 4). Springer Science & Business Media.

Child, N. A. (2013). The theory and practice of exchange control in Germany: A study of monopolistic exploitation in international markets (Vol. 10). Springer Science & Business Media.

Council of Clean Energy (2015). Clean energy Australia report 2014.

Hawley, E. W. (2015). The New Deal and the problem of monopoly. Princeton University Press.

Johari, R., Weintraub, G. Y., & Van Roy, B. (2010). Investment and market structure in industries with congestion. Operations Research, 58(5), 1303-1317.

Merhav, M. (2017). Technological dependence, monopoly, and growth. Elsevier.

Skynews (2017). Monopoly power driving up prices: SA PM. [online] Skynews.com.au. Available at: http://www.skynews.com.au/news/politics/state/2017/08/07/monopoly-power-driving-up-prices--sa-pm.html [Accessed 13 Aug. 2017].

Slezak, M. (2017). Your electricity bill: what are you paying for and why is it skyrocketing?. [online] the Guardian. Available at: https://www.theguardian.com/australia-news/2017/aug/10/your-electricity-bill-what-are-you-paying-for-and-why-is-it-skyrocketing [Accessed 13 Aug. 2017].

Zhu, T., Singh, V., & Manuszak, M. D. (2009). Market structure and competition in the retail discount industry. Journal of Marketing Research, 46(4), 453-466.