If India wants to attract more FDI for developing business, it is essential that it should review its business practices and see that it does not create externalities.
While being quality conscious in manufacturing products or delivering services businesses should develop systems and processes which contribute towards preserving the environment, protecting human rights, avoiding corrupt practices, and promoting transparency & accountability for developing sustainability.
Table of Content
- Meeting Changing Expectations of Stakeholders
- Shrinking Role of Government
- Increased Customer Interest
- More Competitive Labour Markets
- Increasing Supply Chain Responsibility
- Growing Investor Pressure
- Demands for Increased Disclosure
- New and Emerging Issues
Meeting Changing Expectations of Stakeholders
Various stakeholders are increasingly looking to the private sector to help them with myriad complex and pressing social and economic issues.
There is a growing ability and sophistication of activist groups to target corporations they perceive as not being socially responsible, through actions such as public demonstrations, shareholder resolutions, and even “denial of service” attacks on company websites. These efforts emphasise the issue of accountability to stakeholders when doing business (BSR 2001).
Shrinking Role of Government
In many countries, national and local governments have taken a more hands-off approach to regulating business, due to the globalisation of commerce and shrinking resources.
As a result, companies and multinational companies in particular are relying less on government for guidance, and instead, adopting their own policies to govern such matters as environmental performance, working conditions and ethical marketing practices (BSR 2001).
Increased Customer Interest
The growing interest in CSR comes from both business-to-business customers and consumers. In the former, there is a significant move by many companies, governments, universities and other institutions to align their purchasing decisions with social criteria, particularly those related to companies’ environmental and human rights performance.
Example: Corporates like Tata’s and L&T have developed a policy to purchase recycled paper. Starbucks Coffee sources coffee beans from fair trade labelled suppliers.
More Competitive Labour Markets
In a tight labour market, many workers especially professional, technical or highly skilled employees are looking beyond pay checks and benefits to seek employers whose philosophies and operating practices align with their own beliefs.
Example: Some companies have found that having “family friendly” policies or being identified as an employer of choice have given them a competitive advantage in attracting and retaining employees.
At the same time, companies are finding that they need to turn to non-traditional labour pools – including economically disadvantaged, non-English-speaking, and physically or mentally challenged individuals – to meet current and future demands for both skilled and entry-level employees (BSR 2001).
Increasing Supply Chain Responsibility
As stakeholders take a growing interest in companies’ corporate social responsibility, many companies are finding that they are responsible not only for their own CSR performance, but for that of the companies “upstream” and “downstream” – that is, a company’s suppliers as well as its customers.
The result is that some companies are imposing codes of conduct on both their suppliers and customers to ensure that other companies’ policies or practices do not reflect unfavourably on them. This has a cascading effect along the entire supply chain, encouraging suppliers to adopt socially responsible business practices (BSR 2001).
Example: Toyota has designed a manual of CSR for its suppliers, which they are supposed to adhere to.
Growing Investor Pressure
The growth of socially responsible investing has accelerated in recent years, with investor groups increasingly pressurising companies on social issues.
Many of these investors are using the shareholder resolution process to pressurise companies to change policies and increase disclosure on a wide range of CSR issues, including environmental responsibility, workplace policies, community involvement, human rights practices, ethical decision-making and corporate governance.
Activist groups are also buying shares in targeted companies to give them access to annual meetings and the shareholder resolution process (BSR 2001).
Demands for Increased Disclosure
Customers, investors, regulators, community groups, environmental activists, trading partners and others are asking companies for more and more detailed information about their social performance.
In response, leadership companies are responding with a variety of reports and/or social audits that describe and disclose their social performance on one or several fronts.
As part of this move toward greater disclosure, many companies are putting increasingly detailed information about their social and environmental performance – even when it may be negative – onto their publicly accessible websites (BSR 2001).
New and Emerging Issues
Recent years have seen growth in the breadth of topics considered under the “corporate social responsibility” umbrella.
Included among these are corporate governance issues, such as how boards of directors are chosen and compensated; religious freedom in the workplace; “cyber ethics” issues of access to and privacy linked to information technology, both for consumers and employees; consumer concern over the use of genetically modified organisms in agriculture; and the new demands brought about by the increased interest in environmental sustainability (BSR 2001).
Business Ethics
(Click on Topic to Read)
- What is Ethics?
- What is Business Ethics?
- Values, Norms, Beliefs and Standards in Business Ethics
- Indian Ethos in Management
- Ethical Issues in Marketing
- Ethical Issues in HRM
- Ethical Issues in IT
- Ethical Issues in Production and Operations Management
- Ethical Issues in Finance and Accounting
- What is Corporate Governance?
- What is Ownership Concentration?
- What is Ownership Composition?
- Types of Companies in India
- Internal Corporate Governance
- External Corporate Governance
- Corporate Governance in India
- What is Enterprise Risk Management (ERM)?
- What is Assessment of Risk?
- What is Risk Register?
- Risk Management Committee
Corporate social responsibility (CSR)
Lean Six Sigma
- Project Decomposition in Six Sigma
- Critical to Quality (CTQ) Six Sigma
- Process Mapping Six Sigma
- Flowchart and SIPOC
- Gage Repeatability and Reproducibility
- Statistical Diagram
- Lean Techniques for Optimisation Flow
- Failure Modes and Effects Analysis (FMEA)
- What is Process Audits?
- Six Sigma Implementation at Ford
- IBM Uses Six Sigma to Drive Behaviour Change
Research Methodology
Management
Operations Research
Operation Management
- What is Strategy?
- What is Operations Strategy?
- Operations Competitive Dimensions
- Operations Strategy Formulation Process
- What is Strategic Fit?
- Strategic Design Process
- Focused Operations Strategy
- Corporate Level Strategy
- Expansion Strategies
- Stability Strategies
- Retrenchment Strategies
- Competitive Advantage
- Strategic Choice and Strategic Alternatives
- What is Production Process?
- What is Process Technology?
- What is Process Improvement?
- Strategic Capacity Management
- Production and Logistics Strategy
- Taxonomy of Supply Chain Strategies
- Factors Considered in Supply Chain Planning
- Operational and Strategic Issues in Global Logistics
- Logistics Outsourcing Strategy
- What is Supply Chain Mapping?
- Supply Chain Process Restructuring
- Points of Differentiation
- Re-engineering Improvement in SCM
- What is Supply Chain Drivers?
- Supply Chain Operations Reference (SCOR) Model
- Customer Service and Cost Trade Off
- Internal and External Performance Measures
- Linking Supply Chain and Business Performance
- Netflix’s Niche Focused Strategy
- Disney and Pixar Merger
- Process Planning at Mcdonald’s
Service Operations Management
Procurement Management
- What is Procurement Management?
- Procurement Negotiation
- Types of Requisition
- RFX in Procurement
- What is Purchasing Cycle?
- Vendor Managed Inventory
- Internal Conflict During Purchasing Operation
- Spend Analysis in Procurement
- Sourcing in Procurement
- Supplier Evaluation and Selection in Procurement
- Blacklisting of Suppliers in Procurement
- Total Cost of Ownership in Procurement
- Incoterms in Procurement
- Documents Used in International Procurement
- Transportation and Logistics Strategy
- What is Capital Equipment?
- Procurement Process of Capital Equipment
- Acquisition of Technology in Procurement
- What is E-Procurement?
- E-marketplace and Online Catalogues
- Fixed Price and Cost Reimbursement Contracts
- Contract Cancellation in Procurement
- Ethics in Procurement
- Legal Aspects of Procurement
- Global Sourcing in Procurement
- Intermediaries and Countertrade in Procurement
Strategic Management
- What is Strategic Management?
- What is Value Chain Analysis?
- Mission Statement
- Business Level Strategy
- What is SWOT Analysis?
- What is Competitive Advantage?
- What is Vision?
- What is Ansoff Matrix?
- Prahalad and Gary Hammel
- Strategic Management In Global Environment
- Competitor Analysis Framework
- Competitive Rivalry Analysis
- Competitive Dynamics
- What is Competitive Rivalry?
- Five Competitive Forces That Shape Strategy
- What is PESTLE Analysis?
- Fragmentation and Consolidation Of Industries
- What is Technology Life Cycle?
- What is Diversification Strategy?
- What is Corporate Restructuring Strategy?
- Resources and Capabilities of Organization
- Role of Leaders In Functional-Level Strategic Management
- Functional Structure In Functional Level Strategy Formulation
- Information And Control System
- What is Strategy Gap Analysis?
- Issues In Strategy Implementation
- Matrix Organizational Structure
- What is Strategic Management Process?
Supply Chain