Management A Case Study of BT Plc

Question: To be able to identify the concept and principles associated with Corporate Social Responsibility To be able to present and interpret the gathered data in order to develop logical lines of arguments based on basic theories and concepts of Corporate Social Responsibility To be able to present the results of research in a structured way and with coherent arguments To be able to deliver prospective recommendations based on the result of research. Answer: Introduction The report presents an analysis of corporate social responsibilities of a company in UK. The chosen company for the analysis is BT Plc of UK. Corporate social responsibilities are important aspects of a business in present days. In the globalisation era, the companies try to maintain their own CSR in the business operation. The sole purpose of a business organisation is not profit making. An organisation has several other social, economical and environmental responsibilities in business process. The study considers different aspects of CSR for a company. The BT Plc is a telecommunication company operating in UK. The company has responsibilities for societies as well for stakeholders. For a telecommunication company, the corporate social responsibilities are regarding facilitating good communication service to the customers, application of innovative technologies, developing value chain in business (Navi 2012). Protection of customer rights is another important responsibility of a telecommunication company. Among the different aspects of CSR, one of the important aspects is responsibility to provide eco friendly service to the users and society. Business organisations often undertake charitable activities to improve society, especially where the company is located. Definitions of CSR and importance of different aspects Definitions of CSR In different literatures, corporate social responsibilities have been described in many ways. There are disparities in the definitions of CSR. Different organisations interpret the meaning of CSR in different ways. Navi (2012) mentioned that, CSR is the organisations concern on the issues beyond its business basic requirements such as economic, legal or technical. On the other hand, Aguinis and Glavas (2012) argued that CSR is the social responsibilities of an organisation to maintain legal, ethical and economic aspects in the business process. Crane et al (2013) mentioned different definitions of CSR in their research paper. According to international labour organisation, CSR is a method of presenting the impact of companys business operation on the society. CSR reflects the values and principles of the organisation. Department for Business, Innovation and Skills of UK describes CSR as temporary actions taken by an organisation ensuring least legal requirements to benefit both own business and wider society. In the view of World Economic Forum, the global corporate organisations are acts in their self interest as the prosperity of the organisation depends on social, economic and environmental factors. Aguinis and Glavas (2012) cited that companies involve themselves in the corporate social responsibilities due to pressure and expectations from different stakeholders. The stakeholders can be share holders, customers or media. Stakeholders have three main interests to engage companies into CSR. The interests may be driven by self-interest, or emerge from the relationship among different interest group or may be moral. Moral interest comes from maintaining ethical standard in business process. Importance of different aspects of CSR Corporate social responsibilities have several dimensions in both individual level and institutional level. Servaes and Tamayo (2013) presented a structure of CSR for an applicable for an organisation. The corporate value of an organisation is associated with the customers, suppliers, employees and shareholders. In the view of Bowen (2013), there are three aspects of CSR, which are economic, social and environmental aspects. Figure 1: Different dimensions of CSR (Source: Bowen 2013) Economic dimension of CSR Understanding economic aspect is important to assess impact of economic variable in the operation of the organisation. In past days, economic aspects are often misunderstood as financial impact on the organisation. Economic aspect in not only the considerations of companys financial matter or recording employment data, rather it is the considerations of impact of companys operation on the greater community and the stakeholders (Cornelissen 2014). A business organisation is definitely a profit making organisation. However, operation of the organisation has some economic values. It contributes in countrys GDP and takes part in economys growth process (Crane et al. 2013). Multiplier effect: The activity of the organisation has impact on employees, consumes, suppliers and the wider environment in which the company operates. If the organisations performance in current period is good, it has prospect to get better investment opportunity in long run. The investment can be made for the structural development of the company and for the well being of the employees. If there is development of the company, dividends of the shareholders and the income of the employees increase (Hopkins 2012). Therefore, standard of living of the employees improves. As the income of the employee increases, demand for goods and services rises. This multiplier effect further influences other industries to increase their production. This chain effect increases the output of the whole economy and contributes in the growth process of the economy (Cheng et al. 2014). Therefore, economic aspects of CSR in present context are very much important. Tax effect: Corporation tax is a major source of income of the government of an economy. The tax collected from the corporate is used for the social well being. Therefore, it is the responsibility of every corporate to pay the tax properly as it is a part of CSR (Kitzmueller and Shimshack 2012). Social dimension of CSR Social aspects of CSR are now gets attention in most of the organisations. The organisations participate in many social activities now a day. Sometimes, corporations engage themselves directly or indirectly in poverty reduction programme or any social awareness program. They sponsor different non profit organisation or NGOs. The progress of the company depends on the health of the society (Homburg et al 2013). They take part in social welfare by recruiting people from diversified culture or socially deprived people. The organisations often sponsors sport events to encourage local community as sport has important role in social development (Asif et al. 2013). Environmental dimensions In present decades, sustainable development is major concern for every economy. As per sustainable development goals set by United Nations, every public, private organisations and government need to take part in the welfare of civil society (un.org, 2016). Natural resource consumption affects the sustainable development of the economy and the world. Environment oriented activities, cleaner production, maintaining ecological footprint is part of environmental dimensions of CSR. Application of CSR on BT Plc Being a leading telecom company in UK, BT Plc has immense responsibility towards society. The aspects of CSR for a telecommunication company are providing uninterrupted mobile networking, facilities of emergency communication, technological development etc. Moreover, BT Plc is has added responsibility in the form of contribution in growth of UK. Protection of rights of customers, meeting needs of them, supplying quality service etc is social dimensions of CSR of a telecommunication company (Brammer et al. 2012). BT Plc has also responsibilities of their employees such as safeguarding the interest of the employees; maintain labour laws of UK, encouraging employees to engage themselves in decision making process of management. It is part of BTs CSR to do business ensuring highest productivity of allocated resources. Maximum productivity subject to efficient utilisation of resources is aspect of CSR of BT Plc. Efficient utilisation of resources reduces carbon emission in the society (BTconferencing.com, 2016) CSR model used by BT Plc Figure 2: CSR model followed by BT (Source: btplc.com, 2016) The goal of BT Plc is to achieve three goals mentioned above by 2020. There are two main dimensions of the CSR of BT, which are social and environmental aspects. Social dimensions of CSR There is a supporters club in BT, which is a part of charitable initiative of BT. This club encourages people to take part in sports with the aim of improving lives of people. This initiative has been taken by management of BT to improve lives of millions of young people globally. The company has sports channel, which collects money from the customers, who wishes to join the sports club (btplc.com, 2016). The donation is used to help the people, who face economical, social or physical challenge in life. The donations are used for disable children, raising employment. The company also arranges programme, which engages young people in community services. BT helps the international projects of educational and health organisation. The organisations, which use football or motorbike to reach the socially deprived children or to save life of people in isolated village, get helps from BT. This Company engages its employees in volunteering process of social activity such as fund raising proce ss. During 2014, the company took a project named Challenge Africa project, which had objective to build a primary school in Kenya (btplc.com, 2016). The project involved the employees of BT, which used the management, leadership skills of employee. The Challenge Africa project had another dimension such as introducing employees with different culture of a developing country. Engaging employees for the benefit of the community has great social face. Along with this, maintaining high ethics in business operation and supply chain standard are parts of CSR of BT. Environmental dimension of CSR The management of BT tries to maintain a good business practices. They maintain high ethical standard by protecting human rights and data security. They aim to reduce carbon intensity about 80% by 2020. In order to reduce carbon footprint, they have developed a carbon calculator. This tool helps the user to know the amount of carbon reduction by using ICT products. During 2005, the company signed a green energy contract, which aimed to use of environment friendly resources such as wind and solar power, hydroelectricity and wave. The objective of the company is to provide an integrated network platform, which is energy efficient with higher capacities. Use of energy saving technology gives advantage to the company in carbon reduction (Korschun et al. 2014). Advantage of CSR policies The CSR model of BT Plc has helped the company to grow business globally. The social and environmental dimension of CSR policies has been able to improve customer satisfaction. Increasing customer satisfaction has helped to development of business. Engagement of long term business goal with good CSR practice and sustainability has been able to reduce brand damage. CSR policies have helped the company to develop good leadership approach in the business process. Moreover, the company has been successful to replace traditional techniques of audit by comprehensive assessment techniques in business model. This company has developed a good relation with the suppliers by taking strategy of using renewable energy in production. Reduction in carbon emission has helped collaboration with suppliers. Furthermore, the management method gives the company and the suppliers, the scope of quality matter inspection (Baumann-Pauly et al. 2013). This strategy helps to strengthen supply chain management of BT Plc. Disadvantages of CSR The company faces some risks regarding CSR policies. The risks are regarding working condition of supply chain. The BT Plc has global presence. Therefore, the company faces risks as in some countries; the labour and environment regulations are not enforced strongly (Lee et al. 2012). Therefore, the company has to face risks about the product and service standard below global acceptable level. There are risks regarding health and safety of the employees. Risk is appeared in the form of climate change. Change in climate may hinder the process of achieving environmental sustainability goal of the company. Being a multinational company, BT Plc has to maintain a diversified culture in the organisation. Hence, the company may face risks if employees cannot adjust themselves with the multicultural aspects of the company. This can affect the performance of the company in the competitive market. Furthermore, failing to comply with diversity can reduce business reputation of the company. Recommendations BT has good CSR practice in business operation. Although having high valued CSR, the company faces some risks. Improvement of CSR policies can mitigate the risks. In order to perform better, the company can ask the external stakeholders associated with business to evaluate companys performance regarding CSR practice. The stakeholders can rate the BT Plcs social activities and environmental practices. Rating by community is more reliable compared to its internal rating. The company gives more importance to environment and social aspects. Economic aspects of CSR are comparatively neglected in the companys CSR model. Therefore, incorporation of economic dimension in the CSR model can be recommended to the company to improve business performance in global context. The company can emphasis on return on investment aspects. In order to do this, BT Plc can improve human resource management policies. Increase in employee satisfaction decreases the rate of employee turnover in the organisation. Strict governance policies sometimes increase dissatisfaction of the employees in the workplace (Moser and Martin 2012). Hence, less formalisation can create friendly environment in the work place and a good organisational culture. Minimisation of waste and best use of resource increases CSR of the company towards society. This corporate strategy may give the company a competitive advantage in the market. The company engages the employees in the social development process. Other stakeholders such as customers, suppliers and shareholders can also take part in the social dimensions of CSR. Active involvement of stakeholders in the business process improves the relationship, which helps the company to grow in long term. The company faces legal risks in fulfilling CSR. Collaborations with consultants, who have knowledge regarding environment and other legal issues, can help the company to reduce risks. Conclusions The report discusses different aspects of corporate social responsibilities of a business organisation. The study has been conducted on BT plc of UK. This company is a telecommunication company operating in UK. The company has global exposure. Therefore, it has different dimensions of business. Corporate social responsibilities model incorporates different stakeholders of a company such as customer, suppliers, shareholders etc. Three dimensions of CSR have been described in this report. Three dimensions are economic, social and environmental. Now a day, these three aspects have become unavoidable part of a business. Different definitions of CSR have been described in this study. Different organisations and companies describe CSR from different angles. The CSR model followed by BT Plc has also three dimensions. The company gives emphasis more on social and environment aspects of CSR. CSR model of BT Plc incorporates customers, suppliers and environment in the model. Connecting society with business process in one of the philosophy of companys CSR. In order to do this, the company engages itself with different social welfare project both locally and globally. It engages itself with social projects such as encouraging young people to involve with different sports. The company donates the fund collected from different social activities in charity. The donations are used for the improvement of lives of socially and economically vulnerable people. It has conducted a project to build a primary school at a socially backward region of Africa. This activity signifies high CSR practice by BT Plc. The company has target to reduce 80% carbon emission by 2020. Although the company maintains good ethics and CSR in business, it faces some risks in CSR practices. There is a risk of climate change, which can negatively affect the sustainable development policy of the company. Hen ce, some recommendations have been made for the improvement of the future CSR in the company. References Aguinis, H. and Glavas, A., 2012. What we know and dont know about corporate social responsibility a review and research agenda.Journal of management,38(4), pp.932-968. Asif, M., Searcy, C., Zutshi, A. and Fisscher, O.A., 2013. An integrated management systems approach to corporate social responsibility.Journal of Cleaner Production,56, pp.7-17. Baumann-Pauly, D., Wickert, C., Spence, L.J. and Scherer, A.G., 2013. Organizing corporate social responsibility in small and large firms: Size matters.Journal of Business Ethics,115(4), pp.693-705. Benn, S., Dunphy, D. and Griffiths, A., 2014.Organizational change for corporate sustainability. Routledge. Bowen, H.R., 2013.Social responsibilities of the businessman. University of Iowa Press. Brammer, S., Jackson, G. and Matten, D., 2012. Corporate social responsibility and institutional theory: New perspectives on private governance.Socio-Economic Review,10(1), pp.3-28. Btconferencing.com. (2016).BT corporate social responsibility - About us - BT Conferencing. [online] Available at: https://www.btconferencing.com/about-us/social-responsibility/ [Accessed 6 Aug. 2016]. Btplc.com. (2016).CSR achievement stories. [online] Available at: https://www.btplc.com/Careercentre/Ourlocations/UK/Apprenticeships/TheBTStory/BeingResponsible/CSRachievementstories/index.htm [Accessed 6 Aug. 2016]. Cheng, B., Ioannou, I. and Serafeim, G., 2014. Corporate social responsibility and access to finance.Strategic Management Journal,35(1), pp.1-23. Cornelissen, J., 2014.Corporate communication: A guide to theory and practice. Sage. Crane, A., Matten, D. and Spence, L.J., 2013. Corporate social responsibility in a global context.Chapter in: Crane, A., Matten, D., and Spence, LJ,'Corporate Social Responsibility: Readings and Cases in a Global Context,2, pp.3-26. de Bakker, F., 2016.Managing corporate social responsibility in action: talking, doing and measuring. CRC Press. Homburg, C., Stierl, M. and Bornemann, T., 2013. Corporate social responsibility in business-to-business markets: How organizational customers account for supplier corporate social responsibility engagement.Journal of Marketing,77(6), pp.54-72. Hopkins, M., 2012.Corporate social responsibility and international development: is business the solution?. Earthscan. Kitzmueller, M. and Shimshack, J., 2012. Economic perspectives on corporate social responsibility.Journal of Economic Literature,50(1), pp.51-84. Korschun, D., Bhattacharya, C.B. and Swain, S.D., 2014. Corporate social responsibility, customer orientation, and the job performance of frontline employees.Journal of Marketing,78(3), pp.20-37. Lee, E.M., Park, S.Y., Rapert, M.I. and Newman, C.L., 2012. Does perceived consumer fit matter in corporate social responsibility issues?.Journal of Business Research,65(11), pp.1558-1564. Moser, D.V. and Martin, P.R., 2012. A broader perspective on corporate social responsibility research in accounting.The Accounting Review,87(3), pp.797-806. Navi, S.T., 2012. Corporate social responsibility. [online] Available at https://yamato-hd.co.jp/investors/library/annualreport/pdf/2013/ar2013_10.pdf [Accessed 6 Aug. 2016] Servaes, H. and Tamayo, A., 2013. The impact of corporate social responsibility on firm value: The role of customer awareness.Management Science,59(5), pp.1045-1061. un.org (2016). Sustainable Development Goals [online] Available at: https://www.un.org/sustainabledevelopment/sustainable-development-goals/ [Accessed 6 Aug. 2016]