Corporate responsibility is an emerging issue and trend in organizational behavior. It is termed as an emerging issue because previously, many organizations did not take part in any corporate responsibility activities. However, it increasingly became clear that to remain successful and expand their businesses further, organizations needed to take part in corporate responsibility activities. They have to enhance their image among their clients and the wider public at large so as to be seen as responsible corporates. Corporates do this by undertaking activities which though not directly related to their core business, they nevertheless had a net positive impact on the entire organization. Corporate responsibility has been defined as that obligation or duty that organizations have towards the public or society and all other stakeholders who in one way or the other contribute to the overall welfare of the organization or its business. From this definition, it is clear that corporate responsibility envisages the taking into account of many relevant stakeholders to the organization’s business. These may include; customers, the wider society at large, the government and the organization’s suppliers among many others. In developing a conceptual framework for an organization’s corporate responsibility, it is important that the organization tries as much as possible to ensure that its corporate responsibility activities are felt or seen by as many of these stakeholders as possible. The question then arises, what would be the ideal conceptual framework for the corporate responsibility of an organization? Arguably, this is the question that Nike was grappling with when it sought to restructure its corporate responsibility. This submission consequently proceeds to discuss the conceptual framework that can explain Nike’s approach to corporate responsibility.
Nike’s approach to corporate responsibility can arguably be described as an integrated conceptual framework. This is because the organization seeks to ensure that corporate responsibility nuances on every aspect of the operations of the organization. This can also be explained by the fact that Nike seeks to bring on board all its stakeholders in the framework it adopted for its corporate responsibility. The conceptual framework approach adopted by Nike is anchored on a number of pillars. These include the Nike’s responsibility to the owners of the business, its responsibility to its customers, its responsibility to its employees, its responsibility to suppliers and lenders, its responsibility to the government, its responsibility to competitors and its responsibility to the society at large.
An organization’s responsibility to its owners connotes certain practices that the organization must undertake. These include safeguarding the resources of the organization, avoiding unnecessary expenditure and extravagance with resources, making full disclosure of material information and lastly, ensuring that the owners of the organization get a good return for their investment. These practices are to a great extent reflected in the conceptual framework that Nike adopted for its corporate responsibility. It seeks to achieve this by adopting a corporate responsibility framework which will enable it to attain and retain a competitive advantage. The corporate responsibility framework that it seeks to adopt will also enable it to maintain the growth trajectory in terms of profits thus ensuring that it remains profitable. Ultimately, the success realized by pursuing a corporate responsibility which encompasses the above stated goals will also benefit the owners of the organization. This is because they will be getting a good return on their investment as a result of the benefits that accrue from the corporate responsibility strategy model that the organization adopted.
An organization’s responsibility to its customers should also be part and parcel of its corporate responsibility strategy. Nike recognized the fundamental importance of this corporate responsibility tenet and rightly included it in its corporate responsibility framework. An organization’s responsibility to its customers usually encompasses a number of things. These may include provision of high quality goods and services to all its customers, ensuring that the products which the organization produces are hygienic and if they are consumables, that they are safe for consumption and ensuring that they provide after sale services. Nike’s corporate responsibility conceptual framework has adopted a number of the tenets which underlie an organization’s responsibility to its customers. For instance, as part of its corporate responsibility strategy, it seeks to encourage more open communication between the organization and its various stakeholders. It seeks to do this by listening, partnering and embracing transparency as the first step towards open source approaches to problem solving with external stakeholders. This approach will arguably place it in a pole position to better discharge its responsibility to its customers.
The conceptual approach adopted by Nike is also guided by its responsibility to its employees. An organization’s responsibility to its employees connotes a number of issues which may include ensuring that the employees are paid with adequate and prompt compensation, providing both physical and financial responsibility and providing a good working environment and good working conditions that cater for the social and psychological needs of each employee of the organization. Nike’s adopted conceptual framework for corporate responsibility has a focus on its employees too. This is illustrated by the fact that its corporate responsibility strategy takes cognizance of the fact that even if a product is environmentally friendly, if it is made under poor labor law, then such a product is a hollow success. Therefore, it is arguable that Nike’s corporate responsibility framework is also anchored on ensuring that it follows the labor laws, both the external and internal that govern its operations. By adhering to the labor laws, Nike will ultimately meet its responsibility to its employees as most of the obligations under its responsibility to its employees are covered under the labor laws. Indeed, this is a key highlight of a corporate responsibility framework that emphasizes on the need to ensure that an organization discharges its responsibility to its employees.
In its corporate responsibility framework, Nike highlights aspects of its responsibility to suppliers and lenders. An organization which seeks to meet its responsibility to suppliers and lenders will among other things; award tenders in a transparent manner, ensure that all its negotiations are above board and that they are not deceptive, ensure that it makes timely payments to its suppliers and lenders for any goods delivered, services provided or money lent to the organization. Such an organization will also ensure that they offer fair prices to their suppliers. Various aspects of these obligations are embedded on the conceptual framework that Nike adopted for its corporate responsibility. A number of statements or provisions in its corporate responsibility strategy could be used to illustrate this point. For instance, Nike seeks to foster multi-stakeholder partnerships. It expects these partnerships to increase in importance as it learns to work together in unusual alliances and partnerships. Among these alliances and partnerships will include alliances and partnerships with suppliers. Furthermore, Nike seeks to leverage market forces and open source approaches to problem solving, recognizing that all are part of a complex interwoven ecosystem where no organization can achieve systemic change alone. It further intends to move forward on the premise that partnership, collaboration and open source approaches that lead to sustainable market based solutions can generate system change. Arguably, Nike recognizes that its suppliers and lenders are a key cog to its success and consequently embeds them in their corporate responsibility strategy.
Many organizations have tended to give corporate responsibility a wide berth in terms of aligning it with the core competencies and functions of the organization. Nike, in its corporate responsibility framework seeks to make a radical departure from this position. Indeed, it seeks to completely move away from the arguments that have been advanced against corporate responsibility. Such arguments include the fact that undertaking corporate responsibility activities violates the profit maximization rule. The rule is to the effect that organizations must solely focus on profit maximization and avoid any other activities which are not directly related to profit maximization. Nike realized the folly in such rules and recognized that on the contrary, corporate responsibility actually blends with the profit maximization rule. Nike has sought to ensure that corporate responsibility is embedded into all the organization’s activities. It has even gone a further step and integrated the leadership of corporate responsibility to the main leadership of the organization. It seeks to ensure a leadership voice through a more formalized approach to governance and accountability in which the corporate responsibility team will be reporting directly to the chief executive officer of the organization. In addition, the Vice- President of corporate responsibility sits at Nike’s senior leadership table to influence the organization’s strategic direction. These are all pointers to the fact that Nike attaches a great significance to corporate responsibility. Consequently, one of the parameters that guide the activities that the organization undertakes is its corporate responsibility.
Nike has adopted a corporate responsibility framework which envisages seamless interaction and cooperation between the various stakeholders involved in its corporate responsibility activities. The framework takes into account both internal and external stakeholders of the organization. It seeks to do this by ensuring holistic approaches by breaking down any walls that may have existed. Such walls may have existed either within the corporate responsibility team itself or between the corporate responsibility team and external stakeholders such as the community. It must be remembered that the existence of any such walls is a big impediment to an organization achieving its corporate responsibility goals. Furthermore, such walls may lead to unnecessary conflicts which could have been avoided if there was seamless interaction and cooperation among the various stakeholders involved in the corporate responsibility of the organization. By having a conceptual framework for corporate responsibility that seeks to ensure seamless cooperation and interaction between the various stakeholders concerned, Nike will be in a position to avert many of the failures that are usually associated with unsuccessful corporate responsibility activities that are undertaken by an organization. It will also be in a position to identify the best way to restructure its corporate responsibility in the future and how to bring in new ideas end emerging trends in the area of corporate responsibility.
One of the pitfalls that organizations which engage in corporate responsibility activities must avoid is the failure to seek and continuously receive feedback on its corporate responsibility. The end result of failure to seek and continually receive feedback is that it will reach a point when the organization’s corporate responsibility activities will be out of touch with what its other stakeholders expect. Thus, while the organization may have the notion that its corporate responsibility activities will yield positive results, they only yield negative results which serve to the detriment of the organization. Nike’s conceptual framework for its corporate responsibility provides for mechanisms of continually seeking and receiving feedback from concerned stakeholders of its corporate responsibility activities. It does this through seeking to find ways of measuring qualitative impact of its corporate responsibility activities. One of the ways through which it seeks to do this is by taking a systematic approach to answering such difficult questions as how it would establish if its community investment helped improve a young person’s life. By so doing, Nike has adopted a conceptual framework that regards corporate responsibility as a two way process rather than a one way process.
In conclusion, it is evident that any organization which seeks to thrive in the twenty first century must develop an appropriate corporate responsibility strategy. As illustrated by the case of Nike discussed above, it is important to ensure that corporate responsibility underlies and permeates every aspect of the organization’s activities. It is only then that the organization will be able to derive the full benefits of corporate responsibility. Other organizations should seek to emulate the steps that Nike has taken with regard to corporate responsibility.
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