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Critical evaluation and comparative analysis of how leaders apply CSR techniques to create sustainability
Introduction
Corporate social responsibility (CSR) has emerged as an integral part of any organization due to the impact of external forces on companies’ responsiveness. Socially responsible companies gain a competitive advantage in the global market as they have a better understanding of their consumers’ needs, and this could help to strengthen their brand. Additionally, CSR empowers employees to do good using company resources, ultimately boosting their morale and increasing productivity. Promoting operative CSR practices in an organization requires effective leadership centered on achieving organizational goals with the consumer and the public in mind. The contributions of four leaders (Jack Welch, Mark Parker, Dan Pena, and Gwynne Shotwell) who have successfully incorporated beneficial CSR practices will be discussed in addition to their influence tactics and recommendations to other leaders. Reflections on what was learned during this project will be outlined and how these concepts will be applied in personal career development.
Leader Contributions to CSR
- Jack Welch
A primary theme in Welch’s leadership reflected in his quest for a socially responsible company was human value. Arthur, Herring, Morrison, and Bertsch (2017) explain that Welch was keen on meeting with employees, responding to their concerns, and creating a positive working environment. He also understood their value in contributing to General Electric’s success, an aspect that was reflected through the establishment of a learning environment and by empathizing with his employees. The second theme evident in his leadership was creating a pleasant workplace by facilitating active communication across all management levels (Arthur et al., 2017). Welch eliminated barriers in GE’s corporate hierarchy to promote candor and brevity in communication while encouraging leaders to use simplistic and straightforward language when instructing their subordinates. He considered these aspects to be vital in promoting productivity and creativity while giving employees enough opportunities for their career development.
- Mark Parker
As the leader of one of the largest global corporations (Nike), Parker has established a CSR culture centered on a positive work environment and improving the external environment. Parker promoted the Sourcing and Manufacturing Sustainability Index (SMSI) within the organization to ensure compliance with environmental, health, and safety guidelines across all Nike factories (Paine, Hsieh, & Adamsons, 2013). He also improved employee working conditions by eliminating the previous excessive overtime hours and providing better compensation for employees. Parker set new CSR goals designed to reduce Nike’s environmental footprint, promote product innovation, and empower marginalized youth interested in sports. Over the past decade, Nike has succeeded in reducing its carbon dioxide emissions by incorporating green energy and streamlining its supply chain. For example, in 2015, the company transformed more than 24,000 tons of waste into premium material in addition to reducing water use by 43% through Nike’s Closed Loop Ecosystem method (Distelhorst, Hainmueller, & Locke, 2017).
- Dan Pena
Pena is the CEO of Great Western Resources Inc, an oil and gas corporation based on Houston and established in 1981 (Pena, n.d.). Over time, Pena worked on building his company into the multi-million-dollar enterprise that it is today. He integrated CSR aspects to improve the company’s relations with the public and its overall productivity. One such measure entails establishing a code of conduct applicable across the entire organization. DuBrin (2017) notes that the advantage of having a code of conduct is that it promotes positive behavior by outlining the company’s commitment to fairness and honesty. Another common aspect of CSR evident through Pena’s leadership is compliance with the state’s regulations and policies. Pena ensured that the company adheres to the tax and employment laws at all times, along with the environmental law.
- Gwynne Shotwell
Shotwell is the Chief Operating Officer of SpaceX, a space exploration and aerospace manufacturing company in the United States (Newnham, 2016). The company’s activities have a significant impact on the environment, an aspect that Shotwell and all other organizational leaders take seriously. To this extent, part of the company’s CSR entails developing products that have the least impact on the environment and ensuring sustainability, which has been achieved through green energy (Rabie, 2019). The underlying strategy focuses on minimizing the negative impact while ensuring optimal benefits to the stakeholders. Internally, Shotwell has worked on maintaining a suitable work environment by ensuring that all employees undergo proper health and safety training, employees’ rights are upheld and that they receive competitive compensation and benefits.
Leader Influence Tactics to Achieve CSR
- Jack Welch
Based on the influence tactics outlined by DuBrin (2016), Welch’s main approach centers on building trust and respect among his peers and subordinates. One way that this is evident is whereby he created an environment where employees could have an easier time communicating their ideas and thoughts with top management. This way, he increased the flow of information and creativity in the organization, and in turn, employees felt more appreciated. Building a positive corporate culture played a major role in improving its brand image and diversifying economic ventures. Another evident tactic applied by Welch is being honest with employees and other shareholders. Welch was open about the company’s social responsibility and the measures it would take to ensure the employees’ wellbeing while meeting its requirements externally. For example, he explained that GE’s primary duty to the community is to pay its taxes, which are instrumental in guaranteeing community development (Aksenchik, 2018).
- Mark Parker
Unlike Welch, Parker’s main focus is on appealing to the public through its brand. In the early 2000s, Nike was under significant scrutiny owing to poor working conditions, among other factors. To mitigate this, Parker initially used rational arguments to appeal to shareholders about the importance of transforming Nike’s operations to focus on better efficiency and a better working environment for employees. He ultimately succeeded in improving the working conditions, and as a result, Nike managed to regain a positive brand image. The second tactic used by Parker is being a positive role model for the community and other sportswear companies. He communicated a message of change, cultural diversity, and empowerment through Nike’s ads and messages to the public. More recently, the company engaged in empowering underprivileged sportspeople by sponsoring athletes and sports events, which helped strengthen the company’s image and ensure that it fulfilled its CSR.
- Dan Pena
Dan Pena’s approach to CSR primarily focuses on the internal environment whereby he uses his appeal to communicate his message and to help employees understand the intended goal. Pena has developed a wide range of public speaking material, where he discusses different aspects of business and how to achieve competitiveness. He also integrates elements of responsibility to earn people’s respect and trust within and out of the organization. He legitimizes his approaches by highlighting how they would eventually result in better profits for the company and shareholders. In his capacity, Pena has earned the respect of his peers and employees by meeting his targets and portraying how adherence to CSR eventually benefits the organization’s brand.
- Gwynne Shotwell
Similar to Welch, Parker, and Pena, Shotwell leads by example as part of her influence tactic. She has worked to ensure that SpaceX is a leader in its industry, not only in sales but also in its corporate culture and interactions with shareholders. The company has played a major role in initiating and promoting environmental initiatives such as introducing the electric automobile. In addition to this environmental campaign, the goal of this vehicle was to reduce the impact of energy, electricity production, and transportation by minimizing pollution. Another strategy is rational persuasion, whereby she explains the significance of CSR to the organization in terms of fiscal and social responsibility. Investing in solar panels, batteries, and electric vehicles is a rational approach as it reduces dependence on non-renewable energy sources eliminating fuel costs for consumers.
Recommendations to Other Leaders
In leading by example, the most important aspect for the leader is to support the organization’s mission and vision. The leader should emphasize what the company aspires to achieve, the main objectives, and each employee’s role in meeting these goals. Additionally, employees should receive support through training and career opportunities whenever necessary. It is also crucial to follow up once an initiative has been implemented, and the leader should follow through with their actions. This measure helps to set a positive precedent for subordinates to duplicate.
Another approach would require integrating systemic change. According to Kim (2017), leaders should consider diverting from defensive actions and integrating proactive initiatives into their organizational strategy. They should focus on making strict commitments that are seen through by making substantial investments in CSR with the intended goal of increasing the probabilities of better payoffs and reduced risks. This message should be communicated to employees to understand the benefits they would gain from the new change.
When trying to persuade others, the leader should aim to provide comprehensive information to legitimize the company’s behavior and the need for social responsibility through effective communication (Kim, 2019). This approach requires transparency, which can often be a difficult aspect to achieve for organizations. It is important to communicate the company’s culture, behavior, codes of conduct, and ethical standards and the company’s future. However, the future can be difficult to represent or predict, and companies should communicate this information cautiously to avoid misleading the public.
Leaders should also aim to highlight the significance of CSR strategies when implementing them in an organization through effective reporting. Schoeneborn, Morsing, and Crane (2020) explain that leaders should analyze their organizations’ activities to anticipate costly ventures and mitigate them. Developing progressive reports enables the leader, stakeholders, and the public to identify how the company’s actions would affect them and contribute to positive development. These reports can also be useful as references in the future when incorporating new strategies.
Reflection on Learning
The main lesson from this project reflects on the significance of effective leadership when implementing a CSR strategy that requires legitimacy and engagement. The leader should communicate the company’s intentions and ensure to follow through with practical actions. For example, Mark Parker managed to improve Nike’s brand image by communicating a message of empowerment and social accountability and legitimized it by changing the company’s operations across the supply chain. It is also important to be a positive role model for employees and the public, as highlighted through Jack Welch’s leadership style. The leader should integrate the organization’s vision and mission when communicating the CSR strategy for employees to understand their roles and how they would contribute to social development. Over the recent past, corporations have had a larger role in society in terms of governing and influencing the well-being of employees, consumers, and the public. As such, leaders should incorporate ethical practices to improve the internal environment without affecting the internal environment.
Conclusion
Different leaders incorporate varying CSR approaches based on their personalities, corporate culture, and interaction with society. These differences are reflected in how Jack Welch, Mark Parker, Dan Pena, and Gwynne Shotwell accomplish their social responsibilities. These leaders use diverse initiatives centered on creating suitable work environments, compliance with regulations, building a sustainable environment, and engaging in social entrepreneurship. Despite these differences, the leaders have some similarities in the applied tactics. A common tactic applied in these industries is being a positive role model and leading by example. These leaders have established positive reputations in terms of CSR due to their active involvement and their concern for both employees and the public.
References
Aksenchik, A. (2018). How to manage personnel properly: principles of Jack Welch. Retrieved from: http://edoc.bseu.by:8080/bitstream/edoc/75866/1/Aksenchik_A._p._45_47.pdf
Arthur, S., Herring, N., Morrison, L., & Bertsch, A. (2017). Jack Welch: The Bridge between Drucker and Goleman. International Journal of Business and Social Science, 8(3). Retrieved from; https://ijbssnet.com/journals/Vol_8_No_3_March_2017/1.pdf
Distelhorst, G., Hainmueller, J., & Locke, R. M. (2017). Does lean improve labor standards? Management and social performance in the Nike supply chain. Management Science, 63(3), 707-728. Retrieved from: https://eureka.sbs.ox.ac.uk/5637/1/LeanLaborStds_MnSci.pdf
DuBrin, A. J. (2015). Leadership: Research findings, practice, and skills. Nelson Education.
Kim, S. (2019). The process model of corporate social responsibility (CSR) communication: CSR communication and its relationship with consumers’ CSR knowledge, trust, and corporate reputation perception. Journal of Business Ethics, 154(4), 1143-1159. Retrieved from: http://www.com.cuhk.edu.hk/images/content_people/publication/sora-journal-2018-csr.pdf
Newnham, D. (2016). Gwynne Shotwell. In Female Innovators at Work (pp. 109-115). Apress, Berkeley, CA. Retrieved from: http://link-springer-com-443.webvpn.fjmu.edu.cn/chapter/10.1007%2F978-1-4842-2364-2_11
Paine, L. S., Hsieh, N. H., & Adamsons, L. (2013). Governance and sustainability at Nike (A). Harvard Business School. Retrieved from: https://www.hbs.edu/faculty/Pages/item.aspx?num=44895
Pena, D. (n.d.). The Trillion Dollar Man. Retrieved from: https://www.danpena.co.uk/
Rabie, P. (2019). NASA’s ‘Green’ Fuel Will Make Its Space Debut on SpaceX Falcon Heavy Mission. Space. Retrieved from: https://www.space.com/falcon-heavy-nasa-testing-clean-fuel-stp2.html
Schoeneborn, D., Morsing, M., & Crane, A. (2020). Formative perspectives on the relation between CSR communication and CSR practices: Pathways for walking, talking, walking. Business & Society, 59(1), 5-33. Retrieved from: https://research.cbs.dk/files/57749100/dennis_schoeneborn_et_al_formative_perspectives_acceptedversion.pdf
