The Corporate Social Responsibility (CSR)
The Corporate Social Responsibility (CSR) is the concept that covers the ethical and social accountability businesses possess over and above the law. It provides the guidelines to allow the commercial entities to contemplate and choose their obligations and responsibilities. CSR has been developed as the avenue at which the business recognizes their ethical outlook and responsibilities. The organization also engages in the CSR activities as a strategy to reach the vulnerable individuals or customers in the society in which the business is located. The businesses take the responsibility of engaging in the CSR to improve the image and reputation of the brands of the business in the region in which the business is established.
The rationale of CSR by Organizations
The Organizations have the Corporate Social Responsibility to protect the rights and benefits of the stakeholders. For instance, the business of the organization should not generate negative impacts on the environment or the society it operates in. The organizations have the social responsibility to ensure that its operations do not contribute to the environmental degradation effects. Moreover, the business of the organization is responsible for improving the welfare of the individuals living in the society. Therefore, the organizations have these legal and ethical responsibilities to ensure that they promote the welfare and safety of the stakeholders.
Carroll's account of CSR and Toms Company
The Carroll's account of Corporate Social Responsibility (CSR) groups the responsibilities into four main dimensions, such as philanthropic, ethical, legal and economic responsibilities (Carroll & Buchholtz, 2009). According to Carroll and Buchholtz (2009), the philanthropic responsibilities of the organization involve the contribution of the resources to the society or community with the aim of improving the standard of life for the members of the community. The philanthropic responsibilities of an organization include the donations, sponsorship and other charitable contributions that the organization make to the vulnerable individuals in the society to improve the quality of their lives. On the other hand, the ethical responsibilities are the strategies which the organization undertakes to ensure safety in the regions they execute their businesses. The ethical responsibilities may include the obligations of the organization to perform what is right, just and fair to the environment and society in which it executes its business.
The legal responsibilities involve the obligation of the organization to comply with the set guidelines of right and wrong in the society in which it executes the business
For instance, the legal responsibility of the organization may entail adherence to the laws of the land or the rules of the game. However, the economic responsibilities of an organization entail the operations like the source of employment, the creation of wealth and provision of return on investment for shareholders. Carroll's perception of the economic responsibilities for the organizations is to provide the economic stability in the economies they execute their business.
According to the case study, the philanthropic Corporate Social Responsibility that Toms Company engages includes donations of a pair of shoes for every pair of shoes purchased
The case study states that Toms Company has donated at least 35 million pairs of shoes since 2006. These philanthropic activities conducted by the Toms Company are spread among the 60 countries and the Company collaborates with the NGOs to distribute the shoe donations. Besides, Toms Company donates a pair of glasses with every purchase of sunglasses and this has improved the quality of sight of 300,000 individuals since its inception in 2011. The Toms also provide birth kits to the pregnant mothers in the developing countries for every handbag it sells.
The economic Corporate Social Responsibilities of Toms Company includes the creation of wealth for the shareholders by its staff or employees
According to the case study, the Toms Company employs 500 individuals in its Headquarters located in California. In addition, the Toms Company also has set on the strategy to shift its manufacturing from China to developing countries to provide job creation. This move by Tom, according to the perception of Carroll is aimed at economic stability. Thus, it is considered an economic responsibility of the Company.
Furthermore, according to the case study, the Toms Company operates in more than one country; therefore, it has the legal responsibility to adhere with the rules of the game applied for its businesses in various countries
On the other hand, the ethical responsibilities of Toms Company include ensuring that its employees work in a safe and healthy environment. The Toms Company also has the ethical responsibility to avoid any form of pollution that could be caused in the process of manufacturing (Smolovic-Jones, 2017). According to the case study, Toms Company manufactures in China, and it is the ethical responsibility of the Company to ensure that its emission does not contribute to global warming effects. Therefore, the Toms Company should strive as much as possible to control the effect of its manufacturing processes to the environment.
The most important dimension of the CSR for the Toms Company includes the ethical, legal and economic dimensions
The ethical responsibility is much important for the Toms Company as it strives to sustain the safety of the environment. The ethical responsibility of reducing the effects of the manufacturing processes to the global warming is significant in the sustenance of the people and aquatic lives. Too much emission to the atmosphere causes pollution to the environment; and subsequently, increases the effects of the global warming; thus, it is essential to be controlled by the Company. The legal responsibility dimension is also crucial for the smooth operations of the Toms Company as it seeks to adhere to the rules of the game for the business in every country. The economic responsibility dimension is significant for the Toms Company as it provides the main reason for the establishment of its businesses; that is, making of profit and economic stability.
Question 2
Advantages of global sourcing of suppliers by Toms Company
The sourcing of the suppliers from a country like China ensures that Toms gets new technology and capacity. Toms Company source for the suppliers from China because the local suppliers lack the capacity and technology to sustain the competitiveness in the market. China is recognized as one of the countries which have made great steps in technology. Therefore, the benefit Toms Company enjoys by placing its manufacturing plant in China is that the technology and capacity employed in the product improve the competitiveness of its products in the domestic market, that is, in the United States. This move of Toms Company to source for suppliers from China ensures that the shoes are of higher quality than the ones manufactured in the domestic market.
In addition, the sourcing of the suppliers also reduces the cost of production. For instance, according to the case study, Toms has shifted its manufacturing from China to developing countries like Kenya and Ethiopia with the aim of creating job and reducing the cost of production. The cost of labor in the developing countries like Kenya and Ethiopia is relatively low compared to the United States. Thus, the Toms company benefits from cheap labor in the developing countries.
The oversea sourcing of the suppliers also provides access to cutting-edge research, design or specialized knowledge. For instance, Toms Company which manufactures shoes benefits from global sourcing by the manufacturing of the unique designs of shoes that are not found in the local market. This strategy will ensure that the Company continues to remain competitive in the local market not only by the production of new designs of shoes but also providing proximity to raw materials that may be unavailable domestically.
Disadvantages of global sourcing of suppliers by Toms Company
The disadvantage of global sourcing of suppliers is the increased rules and regulations that apply to the global market. There is an increased risk of sourcing for the supplier globally due to the customs requirements. For instance, the Toms Company, which source for suppliers in China, Kenya, Ethiopia and Haiti is faced with the obligation to pay the customs charges to the border and customs authorities of these countries (Winchester, 2017). Thus, this process may cause delays as a result of the time consumed by the customs authorities to clear the shoe products at the borders.
The global sourcing of the suppliers may also be risky due to the currency fluctuations. The currency in China, Kenya, Ethiopia and Haiti are different and the currency tends appreciating or to depreciate depending on the economic situation of a given country. Thus, this can lead to the financial crisis for the Toms Company in a situation of economic recession. Besides, the cultural and language differences among the countries can create hindrance to the benefits of sourcing for the suppliers overseas. The culture of certain countries may not support the design and manufacturing styles employed in the domestic market making the products to become less competitive in the local market. There also exists the risk of complicated logistics in the process of global sourcing for suppliers that can cause delays in the product.
Question 3
Sweatshop is an industry, particularly in the clothing business, where casual laborers are employed at extremely low compensations for low working hours and in poor conditions. It is not acceptable for the shoe manufacturers to use the sweatshops. According to Kant's theory of moral duty, human beings should be treated with respect and honor. Moreover, Kant argues that individuals hold a fundamental responsibility to treat human beings as ends in themselves and not as the means to an end (Winchester, 2017). The incorporation of the sweatshops in the shoe manufacturing business is one way of compromising the ethical responsibility the employers have over the employees and this practice is not acceptable. The employers should treat all its workers with the dignity and fairness that is deserved, and should avoid the practice of favoritism and turn of blind eyes to ethical lapses within the organization. Hence, the business has the ethical responsibility to care for the environment and the welfare of the individuals that work within the organization.
In addition, the consequence of the poor working conditions to the employees should be considered by the employers of the shoe manufacturers before embarking on the decision to introduce sweatshops in the shoe industry.
The consequentialist ethics advocates for the decisions that would create benefits for the workers in the end. The decision to subject the workers to meager wages and poor conditions are unacceptable in the shoemaking industry. This is because the sales of the shoes depend on the quality of manufacturing; thus the moment the workers are subjected to the poor working conditions and low wages, this nature of treatment on the part of the laborers will translate to poor quality of the shoes. Consequently, poor quality of the shoes will reduce the profits and benefits to the shareholders thus the introduction of the sweatshops is not acceptable in shoe manufacturing. The moral perception denies the practice of the sweatshops. The shoe business may opt to use the sweatshops because it increases profits; however, the human cost is not always taken as part of the calculation in the determination of the profit. The introduction of the sweatshops in the shoe industry can lead to poor health and loss of lives due to poor working environment thus generally it is not acceptable even though it may seem to reduce the cost of operation. However, as much as it reduces the cost of operation, it is compromising the ethical corporate social responsibility the factory has towards its employees of reducing harms.
List of
References
CARROLL, A. AND BUCHHOLTZ, A. (2009). Business and Society: Ethics and Stakeholder Management, Mason, Ohio, South-Western Cengage Learning.
SMOLOVIC-JONES, O. (2017). B100 An introduction to business and management. The Open University.
WINCHESTER, N. (2017).B100 An introduction to business and management. The Open University.
