Corporate social responsibility an open systems perspective.

Author:Andrew
Position::Report
 
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INTRODUCTION

Integrating Corporate Social Responsibility and Environmental management into a company's strategic plan is a major challenge for today's business organizations. Increasingly the expectation is that business organizations do more than superficially engage with the concepts, they are expected to integrate them into them into their operations and in doing so take into account a broad range of stakeholders (Eweje, 2011, & Fooks, Gilmore, et al, 2013), receive social sanction for activities (Devinney, 2009), and perform financially (Belu & Manescu, 2013). These demands add to the dynamic complexity of issues facing today's business organization leaders, yet adaptation to these changing demands is critical for organizational survival, as Tom Peters bluntly states business organizations need to "change or die" (Jick & Peiperl, 2004: xv). Understanding and managing this complex business environment with its increasing uncertainty and ambiguity is now essential for organizational survival, there is a great need for leaders and managers to have the skills and abilities to manage these increasing demands and expectations.

One major development that has inextricably changed the environment in which today's business organization operates is our technological advancement, specifically how we communicate. The volume and speed of information moving around the world has increased exponentially, an acute result of which is an increased awareness of the world outside of our immediate locality. Couple this amplified flow of information with an increased awareness of an organizations actions in terms of social impact, add into the equation a more accurate understanding of our effect on the natural environment, and the socially responsible business organization now finds that its actions are increasingly scrutinized and publicly evaluated, resulting in a demand for improved environmental and social corporate responsibility. Understanding and managing this challenge 'social exposure' (Hall, Matos, et al, 2005) is now the reality of doing business in a globalized world. 'Globalization' as the changing dynamics of global business is often referred to is institutionalized in usage yet debated with respect to its meaning (Ricks, 2003; Rugman, 2003), however the discussion of whether an organization is operating in what is described as a global arena or between a 'triad' of trading blocks is in this case is not the pertinent focus of this paper. In both cases the socially responsible organization is operating in culturally and ecologically diverse environments and is both effected by and having an effect on these environments (Husted, 2003). The new communication technologies and the increasing scrutiny and exposure only add to the pressures of doing business. Additionally, the emotional natures of environmental and social responsibility issues often result in a very public debate that can be quite damaging to the organization, sometimes regardless of whether the organization is 'doing the right thing'. The issue discussed here is not how to negate the public pressure, as this can be warranted, but to provide the manger a framework for understanding how to manage the increasing pressures for corporate environmental and social responsibility.

Through the examination of an 'open systems' organizational model, and resulting ideas of environment, boundaries, and equilibrium, this paper provides an embedded notion of the business organization that understands the multifarious processes and relationships of corporate social and environmental responsibility not as independent entity's but as a complex and dynamic whole. We suggest that from this embedded and integrated perspective a business leader or manager will be able to understand a more complete picture and avoid what we see as the critical challenges in moving towards a strategic direction based on corporate environmental and social responsibility--Organizational vulnerability, Entrenchment and the Silo Effect.

To survive, "especially for the long term" organizations must be able to change and adapt to the environment in which they operate (Burke, 2002: 1). We argue that without an integrated, open systems understanding of how the organization is embedded within society which is in turn embedded in the natural environment, the business organization, and in particular the socially responsible business organization will likely collapse due to a failure of understanding its responsibilities and adapting accordingly.

CHALLENGES

The challenge of constant adaptation exposes an organization to many challenges. Regarding social and environmental responsibility three critical issues stand out, 'Organizational Vulnerability', 'Entrenchment', and the 'Silo effect'. It is to these issues that this paper is focused, and through doing so develop and propose a resolution.

Organizational Vulnerability

Socially responsible business organizations face the challenge of diverse values, and resulting differences in culture, language, laws, and values provide many hurdles. With the recent awareness in environmental and social issues many organizations are undertaking programs to be proactive and mitigate issues before they arise. Additionally, proactive management in environmental and social issues has been traditionally described as an effective strategy for developing competitive advantage (Hart, 1995; Porter & van der Linde, 1995; Hart & Milstein, 1999; Senge & Carsted, (2001).

However two crucial issues result from this movement to environmental and social responsibility. The first issue focuses on how organizations expose themselves to increased societal scrutiny and have to manage what Hall and Vredenburg (2003, 2005) call "stakeholder ambiguity". Explained through their 'Double-Edged Sword' model, Hall and Vredenburg (2003) recognize that the risks involved in taking a proactive stance to social and environmental issues are often more complicated and demanding to understand and manage than is often realized. Existing business models, skills, and managerial attributes are ideal for dealing with the expected problems and issues found in the conventional fields of business. However, with environmental and social issues the operational fields are changing. New unknown operational environments are created and organizations expose themselves to unexpected risks, new forces driving the change process, and different public expectations of success. Conventional business attributes are now only a part of the needed skill set for managers. Successful management of the changing environment is now even more critical if an organization is to be successful. As companies such as BP, Monsanto, Nike, and Shell Oil have all demonstrated the challenges produced by environmental and social issues can be quite destructive (Hall & Vredenburg, 2003). Nonetheless like any destructive change there is also opportunity for differentiation and competitive advantage (Schumpeter, 1934, 1942).

The second difficulty and one which increases the...

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