CSR Continuum

One of the final requirements in our Corporate Social Responsibility (CSR) class is to assess our company’s positioning in the CSR continuum shown below.  

While reflecting where our company really is, I realized I made a wrong judgment of my current employer.  Before I took up my MBA degree, my perception of CSR is doing or giving back something to the community.  Tree planting is one of the most common activities when we talk about CSR, and with my 3 year stint with the company, I have not witnessed this program.  In one of my conversations with a colleague, also before taking up my MBA, we compared our company with the other organizations, and envied how big the CSR activities are for those companies.  We were somehow upset since our company does not give a big deal to these programs.  One perfect example is our cash donation to 2 big foundations.  During the actual giving of check, our only representative was our company nurse.  We compared that in other companies, donations are usually handed over by the top management, and of course, with well documented photos. 

This course gave me a whole new perspective of what CSR really is.  From having an impression that my company is apathetic in promoting CSR activities, I now give a high regard to my employer’s CSR values.  One of my key learnings in this course is that CSR is not about charity nor a public relations activity.  CSR is how companies contribute to society through good business practice, and how it forms part of the company’s core business.  CSR is more of how companies make or earn profit, and not how they spend it.  This framework makes a lot more sense than my initial perception of what CSR is.  Some companies may have good public image because of their charity and other related activities.  But if we try to further scrutinize, are their employees well taken care of?  Are they actually practicing a fair competition?  Are their employees given a just compensation and benefits?  Do employees have a conducive and safe working environment?  

In this course, I realized how CSR is being used as a facade by most companies.  I’m glad that our company is not among them.  My current employer may not have huge spending on charity activities, but I would say that responsible business practices are definitely being carried out.  In terms of production process, my employer ensures a high quality of our products.  Despite having a very minute size, our products perform a very critical role in automating various functionalities of a vehicle, from power to sensors and alarm.  Some of our products are as small as 1/8 of a thumbnail, but this small can damage the car and worse, a human life, if produced with a defective or low quality.  The manufacturing plant, in general, is a safe work place and pollution is controlled, as we want to avoid complaints from nearby residents.  Our employees are well taken care of.  Compensation is within the industry’s average, or at least our HR tries its best to align with the market rate; benefits exceed what the law requires, and employees in general are treated well by managers and supervisors.  Our HR department continuously improve its benefits package, and conducts more and programs to promote wellness and camaraderie of our employees.  Rather than spending money for donations and other external CSR programs, the company focuses itself instead on internal programs, for the welfare of our employees.  They are after all the most valuable asset of our company.  They are after all, the main drivers in ensuring the quality of our products.  

Gender Equality in the Workplace

One of the last topics covered in our MBA-CSR class was the gender equality in the workplace.  Gender equality, according to our slides, means “that the different behavior, aspirations, and needs of women and men are considered, valued and favored equally.”  In my current employer, I believe that if not nearly equal, we have more female than men employees.  This has significantly evolved from decades ago.  Since we are a manufacturing company, the manpower before used to be dominated by men.  One of the main reasons was that there were less automated machines in the past, and that the strength of men is needed to operate or lift the parts of some machines.  Aside from the gender preference, our company also used to require a certain height limit.  Yes, this is a form of discrimination.  But the justification of our managers was, they needed taller employees to reach certain parts of the machines. 

As years passed, the physical structures of our machines, as well as their functionalities have also evolved.  Alongside with this machine evolution, is the change in the gender and height preference of the company.  To reduce issues on discrimination, there were some modifications in the facility layout.  The height of some of our machines did not really change over the years.  But the modification made was to place some platforms, so that height requirement will no longer be an issue. Although lifting of some machine parts would really require male employees, more female employees are now hired for almost all other functions.  The strengths and weaknesses of both genders are acknowledged by the company, and that’s where the strategy on where to place them comes into place.  Male employees are usually assigned to processes which may require lifting of certain heavy tools and machine parts.  Females on the other hand, are usually assigned to visual inspections, since women in general have softer hands and have more attention to details.    In terms of management, we have about 100 managers, and I would say that women population for managers is almost the same as men.  However, the top management is still dominated by men. 

Another discrimination issue that we have also eliminated was the requirement on the educational attainment.  Several years ago, the company's minimum educational requirement for our operators is at least 2 years in college or vocational course.  When our HR was evaluating the turnover rates, they have realized that turnover rates were a lot lower before, when the minimum educational requirement was 'at least high school graduate.'  The management reflected that those who did not step in college have a higher loyalty than than those who had at least finished their 2nd year in college.  Because of this, the management decided to revert to its requirement a decade ago, which is to reduce the educational requirement for applicants.

Companies, like what my employer did, should continue to find ways and assess the value of equal opportunity in the workplace.  In setting requirements as to gender, educational background, height, religion, race, etc., companies should carefully evaluate why they really need such limitations.  Existing hiring policies should also be periodically reviewed, and management should evaluate what are the possible workarounds in meeting certain requirements, while eliminating discrimination.  

Labor Issues

For several years, I have been using IPhones and have tried 3 models already.  Although I’m not really a gadget-savvy, I’m a happy and satisfied Apple user.  However, my perception of Apple has changed after I watched the video featuring the labor conditions at Foxconn.  Foxconn is the major manufacturer of IPhones and other Apple products, Hewlett Packard, Dell, Motorola, Nintendo, Nokia and Sony (Wikipedia).   In the video, Foxconn is said to have violated a number of labor rights, resulting to riots and worse, suicide of some employees.  Employees are said to be working for excessive hours and not fairly compensated for their overtime.  Other allegations about Foxconn include cancelling of lunch breaks if targets are not met, limited day offs, child labor, and that employees are sometimes exposed to harmful substances.  It is really surprising to know that behind the most popular mobile brand, are some negative stories. 

First, I was quite surprised that there’s a highly manual operation involved in the manufacturing of Iphones.  I am also working in an electronic manufacturing company.  Although we have a large workforce, I would say that the jobs of our operators are not labor intensive.  Our employees work on a 12-hour shift, but they are properly compensated.  Most of them actually prefer to work on a 12-hour shift than on an 8-hour shift, because of a huge jump in their net pay.  Unlike Foxconn, our company is very careful in handling our employees.  We have encountered various labor cases already, and as much as possible, we want to avoid incurring costs on legal cases.  Aside from a negative public image, we are also subjected to high legal costs, both to our lawyers, and to the employee who had filed a complaint/case against us.  Aside from cost, there’s also a lot of time spent in facing these charges.  So, rather than a reactive approach, our company is more of doing a preventive approach, by ensuring compliance with the labor laws. 

At first, I wondered why Foxconn has managed to continue its operations despite the cases filed against them.  Then I realized that the government cannot simply cease the operations of very big companies.  Ceasing, or at least suspending the operations of these influential companies, not only would affect the employment rate of the country, but would also significantly affect the tax revenues of the government.  Although the government has the power to halt Foxconn’s operations, it would eventually backfire against them. 

Foxconn’s customers (e.g. Apple) on the other hand, should also have the responsibility in ensuring the sound business practices of their suppliers.  CSR is not limited to a company’s operations and programs, but also extends to the sound business practices of their suppliers and customers.  In other words, a true and effective CSR should be implemented in an ecosystem of the company and its stakeholders.  Accountability of implementing responsible business practices should be shared by suppliers, customers, employees, owners, and other stakeholders.  Countries and their governments also form part of this ecosystem.  Another issue involved here is that the approach to CSR is different between the supplier’s country (China) and its customers (US).  US on one hand is giving a high regard to CSR activities, but on the other hand, China’s approach to CSR needs more maturity.  It may be a big leap to reconcile the differences in these two powerful countries, in terms of their approach to CSR.  To reconcile differences, the safest approach is to ensure that the contracts between the suppliers and customers are adequately reviewed, and adequately include provisions on CSR matters particularly on labor and quality issues.