Unilever And The Failure Of Corporate Social Responsibility
REPORT: Corporate Social Responsibility (CSR)
In “Unilever And The Failure Of Corporate Social Responsibility" (Borelli, 2017), the article associates CSR with failure.
For this assessment task,
- Define the key term 'CSR'.
- Discuss why Unilever’s CSR approach, as described in this article, is considered unsuccessful.
- Discuss why CSR may be successful for other companies
- Recommend whether or not a company should implement CSR
Use including all relevant components and present the information in a report format professional-looking document.
Borelli, T. (2017). Unilever and the failure of corporate social responsibility. . Retrieved from Forbes https://www.forbes.com/sites/econostats/2017/03/15/unilever-and-the-failure-of-corporate-social-respo
Executive Summary: The key aim behind the development of this paper is to understand the failure of the corporate social responsibility of Unilever and the role of the leading authority in the respective failure. It is also aimed to understand the benefits associated with CSR for the other companies implementing it in a successful manner. In present time, the significance of CSR and its role in the business organisation is increasing day by day. The paper will help in understanding the clear meaning of CSR, its role in the success and growth of the business organisation, analysis of the failure of CSR by the means of the case study of Unilever and the manner in which the implementation of CSR could be improved through vital recommendation.
Context: The following report is in context with the case of Unilever and the failure of corporate social responsibility. It will present in what manner Unilever had experienced failure in terms of implementing strong and effective CSR practices within the organisation.
Background: Over the past few decades Corporate Social Responsibility (CSR), has been developed as a concept which has been the emphasis of numerous research and deliberations. It has developed in significance both in the business sense as well as academically. It captures wide range of values as well as the standards for measuring the contribution of the business towards the social development (Kotler& Lee, 2008). As the term, ‘Corporate Social Responsibility’ is used on a continuous basis, a number of overlapping and complementary concepts comprising of sustainability, stakeholder management, business ethics and corporate citizenship have also emerged (Ruggie, 2017). Such wide range of synonymously used expressions shows that there are multiple definitions which had been derived for CSR from several perspectives and by those in enabling the roles for instance public sector, academics, government agencies and corporate sector.
Objective/Purpose: The objective or the purpose of the report is to understand the failure of the corporate social responsibility of Unilever and the role of the leading authority in the respective failure. It is also aimed to understand the benefits associated with CSR for the other companies implementing it in a successful manner.
Scope: The scope of the report is to understand the clear meaning of CSR, its role in the success and growth of the business organisation, analyzing the failure of CSR by the means of the case study of Unilever and the manner in which the implementation could be improved.
Structure : The report will start with an introduction part highlighting the understanding of the concept developed behind the farming of the report, the context, background, objective, scope and structure of the report. The second part comprises of the discussion which comprises of the definition of CSR, analysis of the failure of corporate social responsibility in context with Unilever and benefits of implementing CSR for the growth and success of companies. The third or the last part of the report comprises of conclusion and recommendations.
Defining CSR: Corporate Social Responsibility or CSR can be explained as a concept that a business organisation is responsible for its effect on all the associated stakeholders. It is the ongoing commitment by the enterprise in order to behave in a responsible and friendly manner and contributing towards the economic development while enhancing the work-life quality of the organisational employees and their families as well as for the society and the communities at large (Valor, 2005).In other words, Corporate Social Responsibility is regarded as the approach for ensuring the growth and the success of the business organisations by the inclusion of the environmental as well as the social considerations into the business operations of the enterprise. It means taking initiative to satisfy the demands of the customers and the shareholders while fulfilling the requirements and the expectations of other stakeholders comprising of the community, suppliers and employees at large (Lindgreen&Swaen, 2010).
CSR also means to contribute towards the society and to manage the business organisation in respect with the impact of the environment in a positive manner. Therefore, Corporate Social Responsibility is a huge contribution towards the sustainable development, implying the manner in which the organisation creates a balance among the social, environmental and the economic objectives while at the same time addressing the expectations of the shareholder and increasing the overall shareholder value (Moir, 2001). The Corporate Social Responsibility does not only comprises of the activities which can use the profit for the purpose of environmental and social development but it also comprises of the various approaches which are used by the organisation for earning the revenues including the transparency to several stakeholders and socially responsible investments. By identifying the significance and the sustainable benefits if being highly socially responsible, a number of companies have started incorporating the business practices of Corporate Social Responsibility. The key aim of CSR is to enhance and upsurge the overall impact of the business organisation on the stakeholders and the society while considering the overall organisational and environment sustainability (Schwartz, 2017).
Analysis of the unsuccessful CSR approach of Unilever
The article provides the key information about the failure of the Corporate Social Responsibility approach of Unilever and the various other aspects associated with it. It has been analyzed that since the year 2009, when the company was leading in the business market, there raised some key issues and challenges of Unilever which had led to the public relations damage and the financial damage faced by the company because of the disastrous leadership of Polman (Borelli, 2017).
Polman, in his leadership put high emphasis upon the superficial feel good policies and practices rather than keeping good emphasis upon the sound business decisions. And as a result, Unilever was mired in a number of controversies related to sexual harassment and environmental issues (Doane, 2005). In the year 2006, there was a lawsuit which was filed against the company over exposure to the highly toxic substances. In India, Unilever had to settle with approximately six hundred workers over the exposure of mercury from a thermometer plant which is now closed (Borelli, 2017). This corporate issue of Unilever has gained international attention from one of the songs of an Indian rapper titled “Kodaikanal Won’t” which addresses the problem of mercury contamination. In the year 2011, there was also exposed the claims of sexual harassment by the Irish Times from the Workers of Africa that stated that there was the practice of offering bribes to the supervisors for letting them stop from the unwanted advances (Browne&Nuttall, 2013).
There were some of the CSR initiatives taken by Polman for addressing the issues and the challenges of sexual harassment claims which were not acceptable by the NGOs. Another report of 2014 issued by the Netherlands-based Centre for Research on Multinational Corporations had claimed that the already present systems of balances and checks had failed to restrict the workers’ abuse on the Kenyan estate of Unilever comprising of the poor housing conditions as well as the sexual harassment. Next to this, the South African business of Unilever was also accused for having collusion with the market competitor by the Competition Commission of Unilever. Polman had its key focus in supporting the UN sustainable development goals that the financial results of the company (Borelli, 2017). And as a result neither the CSR could be positive implementation nor there was growth of the business as the business of Unilever had suffered.The one of the biggest factors behind the failure of the CSR approach of Unilever is its rejection of a $143 billion takeover of Kraft Heinz. The takeover was rejected as it could have prevented Polman in using Unilever for advancing the personal or individual political agenda (Borelli, 2017).
Significance of CSR in the success and growth of companies
The importance and then significance of Corporate Social Responsibility is continuously rising with the time. In the preset business world, the concept for the approach of CSR is regarded as the key strategy behind the success of the business enterprise. There are a number of reasons because of which the companies must use and incorporate CSR initiatives for the overall success, development and growth of the organisation (Luo,& Bhattacharya,2006). Understanding from the perspective of the business related benefits of CSR and from the wide available literature, it is clearly evident that the business enterprises who usually values CSR stand for the opportunity to have numerous benefits and the organisation must take use of CSR in order to gain huge market share, success, growth and the continuous development.
Customer Relationships and Social Responsibility
One of the most vital significance of CSR is that it causes the business organisations to reason beyond the simple or the basic ethical values for considering the advantages of active involvement in communities. In the contemporary business market, the companies are required to prove themselves to the customers for developing a sustainable and reliable association with them. And thus there is a need to get involved in the CSR related work and activities to give back something to the community. This kind of community association endears the business organisation towards the customers (Sharma, 2013).
The organisational employees are the most important asset for the companies. It is the premise of the obligation of the organisation towards the key stakeholder group in respect with the CSR compliance. It regards as treating the organisational employees with huge respect and also providing fair and adequate working conditions. It also means that there must be fair hiring md recruitment practices that promote the non-discriminatory workplace environment as a CSR practice. Therefore, it results in increased morale of the employees and developed high encouraged teamwork (Kotler& Lee, 2008).
The incorporation of the CSR policy within the business improves the value and the profitability of the company. The introduction of the CSR practices such as the waste recycling and the energy efficient practices minimizes the operational costs and thus it offers huge benefits to the environment. The accountability and the responsibility of the business enterprises also upsurge and the transparency with the local communities, shareholders, media and the investment analysts also tends to increase with the incorporation of the CSR policy and practices (Moon, 2007). Therefore, as a result, there is an improvement in the reputation of the company among the various investors as the mutual funds which integrates corporate social responsibility into the selection of their stock. It results in development of a virtuous circle where the stock value of the company tends to increase and thus there is an ease access to the investment capital (Asemah, Okpanachi&Edegoh, 2013).
Social Media Visibility: One of the key reasons because of which the business enterprises must have visible CSR practices and policy is because of the increasing prevalence and the significance of social media. In the contemporary world, there is a vital significance of social media visibility which is considered as an integral part of the business organisations in respect with public perception and public relation for protecting the brand (Ruggie, 2017). When there are exercised CSR practices in respect with setting up of the employees programs or fundraising, then all such actions and activities are promoted through social media which support the company in developing a positive branding environment for the organisation. Therefore, it a significant way to engage the audiences which goes beyond services and products (Du, Bhattacharya&Sen, 2010).
Conclusion and recommendations
Corporate Social Responsibility is a huge contribution towards the sustainable development, implying the manner in which the organisation creates a balance among the social, environmental and the economic objectives while at the same time addressing the expectations of the shareholder and increasing the overall shareholder value. The organisations that recognize the importance of CSR are socially responsible towards their stakeholders and practice CSR in an effective manner to reap its various benefits. In the todays’ business world, no shareholder or employees would like to get associated with the companies who are not showing decent, legitimate and socially responsible ways of making money. And thus, it forces the companies to incorporate CSR policy and practices (Du, Bhattacharya&Sen, 2010). The paper conclude that Unilever with a disastrous leadership and wrong business practices have led to failure of the CSR approaches. But it is still recommended that the companies must implement CSR because for the reason that the socially responsible businesses makes profit in an adequate manner which is socially and environmentally fair as well as such companies also have high employee satisfaction and employee motivation levels (Sharma, 2013). In the long run, it is beneficial for the companies as the operational cost cuts down with CSR practiced and the businesses gain a better reputation, which reflects a positive image of the enterprise in the eyes of the public which ultimately enhances the customer loyalty and reliability. Moreover, the companies incorporating CSR also fetch the attention of higher number of new customers and investors, thereby upsurge and ease to business capital. The study thus concludes that the business enterprises that carry out the CSR activities attain a lot of competitive benefits (Asemah, Okpanachi&Edegoh, 2013). Therefore, the paper recommends that the companies must endeavor to pay adequate attention towards the implementation of the CSR policy and the practice of corporate social responsibility should be a continuous one.
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