Ac 311 Unit 2
Ac 311 Unit 2
Ac 311 Unit 2
Sustainability
Sustainability: from the verb to sustain meaning: to hold up; to bear; to support; to provide for; to maintain; to sanction; to keep going; to keep up; to prolong; to support the life of. Sustainable development means a lot of things because it is a big idea. More than that, it is a big goal. There have been several debates about the use of the terms sustainable development and sustainability. Some of the confusion over the term is simply a result of the enormity (vastness or size) of the concept. It actually does take some effort to understand, but it worth it. The first global consensus on the meaning of sustainability appeared in the report of the World Commission on the Environment and Development (WCED 1987: p. 54). The WCED summerized its view by saying, sustainable development is development that meets the needs of the present without compromising the ability of future generations to meet their own needs. However the full version of the WCEDs is more complex and refined. It states that sustainable development is whatever contributes to the Balance endurance (continued existence) of a set of three relationships. These relationships are: 1. The relationship between humankind and the environment 2. The relationship between the present generations and future generation 3. The relationship among present generations in different parts of the world or different global social classes (e.g. the global rich and the global poor, owner(s) and the workers, managers and normal employees etc) The first relationship between humankind and the environment includes issues such as the hole in the ozone layer and global climate change. Environmentalists when scrutinizing corporations tend to emphasize this relationship. At one extreme groups search as EarthFirst and the earth Liberation Front rigidly focus on this relationship. Most subscribe to Deep Ecology principles, which include a small human population living in harmony with nature. At the other extreme, there are those who place little emphasize on the relationship between human and the natural environment. An example is the rampant disregard for the natural environment that accompanied the Victorian industrial revolutions in much of Europe and North America and, more recently, in China and India. It is manifested in a belief that the natural environment is inexhaustible. The second relationship is between the current generations and future generations. Those who over-emphasize this relationship tend to have either absolute anti development or prodevelopment bias. You cannot say that you preserve everything for future generations and you put your life in misery. For example saving everything for future and ending up suffering. But again squandering the whole wealth and leaving nothing for the future generations. A good example is cutting all the trees and turning the land into the desert will actually make the human kind extinct and there will be no present and no future generation. The third relationship that has to be balanced for development to be sustainable is that between different groups of people of current generations. In a company set up this will include relationship between managers, owners, employees and community. In a nutshell a sustainable organisation/company will be the one:
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Its employees value it as a great place to work Its customers and suppliers value it as a great business to do business with The community value it as a great neighbour (as good neighbour anywhere they look out for you as you look out for them). When we talk about the community look at it using the wider perspective, including the community of interests. Investors and financers value it as a business into which it is worth putting their money. Corporate Governance Model The model depict that for good or effective corporate governance in an organizations, there are a number of participants to be taken into consideration in the corporate structure, including employees, suppliers, and customers as well as incorporating the community in which firms operate, the political environment, laws and regulations, and more generally the markets in which firms are involved. This reflects a stakeholder perspective on the firm hence entail the needs of the organization to incorporate in CSR activities in its governance structure. In this view the agency theory accommodates the stakeholder agency theory. The theory entails that managers are the agents of all the stakeholders and not only the shareholders. Jensen and Meckling (1976, p. 308) define agency relationship as a contract under which one or more persons (the principal(s)) engage another person (the agent) to perform some service on their behalf which involves delegation of some decision making authority to the agent. The principal can limit the divergences from the agent by establishing appropriate incentives for the agent and incurring monitoring costs in order to prevent certain performance of the agent (Jensen et al, 1976). Hill and Jones, (1992) integrated the stakeholder theory with the agency theory. They expanded the principal agent paradigm of financial economics that looked at the relationship of shareholders and managers. Agency theory can be used to explain the explicit and implicit contractual relationship that exists between the firm and stakeholders that is when the agency theory views the firm as a nexus of contracts between resource holders. The resource holders are seen as supplying the firm with critical resources and during the exchange they expect their interests to be satisfied. Unlike agency theory, the stakeholder agency theory encompasses the implicit contractual relationship between all stakeholders. Stated simply the resultant model is the generalised theory of agency: one of stakeholder-agency (Hill et al., 1992). The core of the agency theory is the assumption that the interests of the principal and agents diverge (Jensen et al., 1976). The similarities between stakeholder agent relationship and principal agent relationship under agency theory are that they both involve implicit and explicit contracts, with the purpose of reconciling divergent interests. Managers are positioned at the centre in order to reconcile the interests of all stakeholders. Interests of principals and agents differ because they have different utility functions. Stakeholder-agency theory postulates that, stakeholders place claims on the firm, when satisfied will reduce the amount of resources that management can use towards the pursuit of growth which is in the interest of managers as it brings higher remuneration, power, job security and status which are the function of the size of the firm. Hill et al (1992, p. 138) remarked, an agency conflict is inherent in the relationship between management and all other stakeholders. To some extent stakeholders and managers interests converge, for example satisfying employees and better wages improve productivity, but there will be a point when the convergence will be replaced by divergence.
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The difference in interests between managers and stakeholders give rise to utility loss, which has been defined by Hill et al (1992 p. 138) as the difference between the utility that stakeholders could achieve if management acted in the stakeholders best interests, and the utility that is achieved if management acts in its best interests. This situation gave rise to the incentive, monitoring and enforcement structures, which reconcile the interests of stakeholders and managers in order to minimise the utility loss. Interest alignment mechanism can be in the form of stock option plans, warranties, etc. In order to reduce transaction costs of gathering information for the diffused stakeholders, the use of institutional structures is relevant for the stakeholders in order to minimise utility loss 1. Stakeholders can use a variety of enforcement mechanisms when management fails to serve their interests; these include law, exit and voice. Incentives are given in terms of tax breaks in pollution containment equipment, this is an example where local community and the general public through their legislative agents use some form of reward in order to reconcile their interests with the management motives (Hill et al, 1992). Carrolls CSR model (pyramid) Carroll who did a number of studies on CSR came out with a model that is widely acknowledged. Carrolls pyramidal layers are described (from the apex) as discretionary, ethical, legal, and economic responsibilities layers. He went further to define the four layers starting with the base where Economic responsibility is regarded as of paramount importance for the business to be able to execute the rest of the responsibilities. A business has to be profitable in the first place to survive and to fulfil statutory and legal requirements. Economic responsibilities include creating employment, business growth, supply of service or products and tax contribution to the government2. The second layer of Carrolls CSR pyramid (from the bottom) is the legal responsibility whereby the business is expected to abide by the laws of the country or the system at which it operates. This includes fulfilling the minimum standards of operations and not engaging in fraudulent activities. Further more, the businesses are expected to fulfil various statutory requirements like contribution for pension for its employees. The third layer of Carrolls pyramid constitute of ethical obligations. These are societal expectations although are not codified into law hence do not qualify as legal responsibility. The fourth layer is what is referred to as discretionary or philanthropic responsibility. These are obligations that a business goes an extra mile because it considers a good thing to do. Some companies refer these as social investments, i.e. activities with no direct business return and are done voluntarily. Carrolls model has been very much referred to in the CSR academic world due to its simplicity and acceptability of its underlying reasoning. Probably the most significant achievement of Carrolls model was its ability to reduce the difference between the former two schools of thoughts (shareholder model and stakeholder model). In fact, Carroll (1991) has come to a stage of integrating Milton Friedmans CSR definition in his economic layer of CSR responsibilities to an extent of showing how little the two schools of thought differ.
1
For example in Tanzania the National Environmental Management Council (NEMC), which monitors and sometimes enforce companies to consider environmental issues in their operations, so that they do not harm the community 2 Contribution from Taxation is economic responsibility while the obligation to pay tax can be regarded as a legal or statutory requirement for a company
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Carrolls Pyramid of Corporate Social Responsibility from top to bottom Discretionary/Philanthropic Responsibilities Contribute resources to the community; improved quality of life. Ethical Responsibilities Be ethical Obligation to do what is right, just, and fair. Avoid harm. Legal Responsibilities Obey the law Law is Society's codification of right and wrong. Play by the rules of the game. Economic Responsibilities Be profitable The foundation upon which all others rest
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Profit-Cantered Model to Social Responsibility Model Over the years, CG has evolved from the traditional Profit-cantered model where it view the organization towards economic responsibilities perspective by placing high priority and efforts on profit generation and being loyal to the owner. This had changed over the decades, due the effects of CSR issues on the performance of the business, hence place priority and efforts on CSR activities and change concentration on the Social Responsibility Model. The two models below view governance as a zero sum game because the economic role of the firm is fundamental to its survival; profit often drives out social considerations. Profit-cantered model to the Social responsibility model
Corporate Community Model or Stakeholder Model As knowledge increases when shared, therefore collaborative partnerships between management and stakeholders can be economically productive. According to Halal (2000), the wealth-creating role of business arises directly out of integrating stakeholders into a productive whole a corporate community. The corporate community model shown below views the firm as a socioeconomic system in which wealth is created through stakeholder collaboration. Note that this is not done just to be socially responsible, but also it is a competitive advantage. The New Perspective: Corporate Community Model
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Stakeholder Model of Corporation The model by Donaldson and Preston (1995), the firm is situated in the centre, and the interactions between the stakeholder and firm are demonstrated as bi-directional, implying that interactions between the firm and each stakeholder happen as separate instances of communication. Additionally, the model implies that the most important interactions for a firm are those between the firm itself and each stakeholder. This portrays the importance of the corporations to involve in CSR issues. The Stakeholder Model
Investors Governments Political Groups
FIRM
Suppliers Customers
Communities
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Efforts were done by Carroll to combine the four responsibility layers of his pyramid and stake holders views. Masoud (2004) outlines the idea which reflects that individual stakeholders of the same company may demonstrate different priorities in as far as CSR for that company is concerned. His choices of stakeholders were Owners, Consumers, Employees, Community and Others (i.e. the rest). These groups of stakeholders were assigned rankings (1 being the highest and 5 being the lowest) of priority to the four CSR Carrolls layers of the CSR pyramid. Masoud (2004) quotes Mitchell et al (1997, pg 854) who define shareholders salience as The degree to which Managers give priority to competing stakeholders claims.. This definition augurs well with different scenarios whereby Managers may find media or development partners (donors), for instance, of paramount importance and hence consider them in the list of primary stakeholders. The models were tested by Masoud, Temu and Lauwo (2007) in Tanzania through a survey involving 115 managers (35 firms) in the state owned firms and 98 managers (30 firms) in the privatized firms for comparative purpose. The results in the two categories of firms support the Carrolls pyramid model of CSR. The relationship between stakeholders salience and the components of the CSR was found to be significant between employees and the legal component in the state owned firms only. The firms managers perceived in similar manner the variables studied. Below is the table on stakeholders views of CSR Stakeholders views on CSR aspect
CSR component CSR: Economics CSR: Legal CSR: Ethical CSR: Philanthropic Owners 1 3 4 3 Consumers 4 2 1 4 Employees 2 1 2 2 Community 3 4 3 1 Others 5 5 5 5
Number in the cells indicate how particular stakeholder view significance of a particular form of CSR. (The ranking is 1 for highest and 5 for lowest)
Triple-Bottom-Line (TBL or 3BL or the three pillars), Economic, Social and Environment or People, Planet and Profit (PPP) The concept of TBL was developed as a response of the tendency for business to put emphasis on financial bottom-line in their organization performance reporting. It was observed that there are other important Key Performance Indicators (KPIs) which could be used as another yardstick for organizations performance alongside its traditional economic measure. The TBL refers to achieving balanced and integrated economic (profit), social (The people), and environmental (The Planet) performance. This implies that the new added parameters for measuring organization performance i.e. social and environmental aspects are not secondary to the more conventional business imperatives.
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The concept of TBL demands that a company's responsibility lies with stakeholders rather than shareholders. In this case, "stakeholders" refers to anyone who is influenced, either directly or indirectly, by the actions of the firm. According to the stakeholder theory, the business entity should be used as a vehicle for coordinating stakeholder interests, instead of maximizing shareholder (owner) profit only. The triple bottom line is made up of "social, economic and environmental" the "people, planet, profit". "people, planet, profit" succinctly describes the triple bottom lines and the goal of sustainability. The People "People" (human capital) pertains to fair and beneficial business practices toward labour and the community and region in which a corporation conducts its business. A TBL company conceives a reciprocal social structure in which the well-being of corporate, labour and other stakeholder interests is interdependent. A triple bottom line enterprise seeks to benefit many constituencies, not exploit or endanger any group of them. The "up streaming" of a portion of profit from the marketing of finished goods back to the original producer of raw materials, i.e., a farmer in fair trade agricultural practice, is a common feature. In concrete terms, a TBL business would not use child labour and monitor all contracted companies for child labour exploitation, would pay fair salaries to its workers, would maintain a safe work environment and tolerable working hours, and would not otherwise exploit a community or its labour force. A TBL business also typically seeks to "give back" by contributing to the strength and growth of its community with such things as health care and education. Quantifying this bottom line is relatively new, problematic and often subjective. The Global Reporting Initiative (GRI) (will be discussed in another unit) has developed guidelines to enable corporations and NGOs alike to comparably report on the social impact of a business. The Environment (Planet) "Planet" (natural capital) refers to sustainable environmental practices. A TBL company endeavors to benefit the natural order as much as possible or at the least do no harm and curtail environmental impact. A TBL endeavor reduces its ecological footprint by, among other things, carefully managing its consumption of energy and non-renewable and reducing manufacturing waste as well as rendering waste less toxic before disposing of it in a safe and legal manner. "Cradle to grave" is uppermost in the thoughts of TBL manufacturing businesses which typically conduct a life cycle assessment of products to determine what the true environmental cost is from the growth and harvesting of raw materials to manufacture to distribution to eventual disposal by the end user. A triple bottom line company does not produce harmful or destructive products such as weapons, toxic chemicals or batteries containing dangerous heavy metals for example. Currently, the cost of disposing of non-degradable or toxic products is borne financially by governments and environmentally by the residents near the disposal site and elsewhere. In TBL thinking, an enterprise which produces and markets a product which will create a waste problem should not be given a free ride by society. It would be more equitable for
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the business which manufactures and sells a problematic product to bear part of the cost of its ultimate disposal. Ecologically destructive practices, such as overfishing or other endangering depletions of resources are avoided by TBL companies. Often environmental sustainability is the more profitable course for a business in the long run. Arguments that it costs more to be environmentally sound are often specious when the course of the business is analyzed over a period of time. Generally, sustainability reporting metrics are better quantified and standardized for environmental issues than for social ones. A number of respected reporting institutes and registries exist including the Global Reporting Initiative. Profit (Economy) "Profit" is the economic value created by the organization after deducting the cost of all inputs, including the cost of the capital tied up. It therefore differs from traditional accounting definitions of profit. In the original concept, within a sustainability framework, the "profit" aspect needs to be seen as the real economic benefit enjoyed by the host society. It is the real economic impact the organization has on its economic environment. This is often confused to be limited to the internal profit made by a company or organization (which nevertheless remains an essential starting point for the computation). Therefore, an original TBL approach cannot be interpreted as simply traditional corporate accounting profit plus social and environmental impacts unless the "profits" of other entities are included as a social benefits.
About International Leaders Forum (IBLF): Independent, not-for-profit organisation. Founded in 1990 by HRH Prince of Wales . Started activities in Eastern Europe in the context of massive political and economic change to demonstrate the positive role of business 90 countries. Over 20 years have accumulated knowledge and experience in responsible business practice. Thought leadership, working with companies to help them build their strategic approaches to CSR, stakeholder dialogue, facilitating cross-sector partnerships, promoting collective action. Build capacity of companies in CSR and set up a network of partner organisations Head office in London; offices in Moscow, Hong-Kong, New York, representative in India
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LEADERSHIP AND MANAGEMENT Good leadership on vision Clearly defined and communicated values Codes of conduct Employee training in values and codes CSR ownership MARKETPLACE Integrity Quality Safety Reliability Customer Relations COMMUNITY DEVELOPMENT Stakeholder Engagement Economic Development Education Community Health Partnerships with CSOs Employee Volunteering Public Policy Engagement Sponsorships and donations
Source: Adapted from Jane Nelson. Building Partnerships: Cooperation between the United nations system and the Business Community. UN and the International Business Leaders Forum, 2002 and Nelson, Jane. Business as Partners in Development: Creating wealth from Companies, Countries and Communities. UNDP, IBLF and the World Bank, 1996.
At the centre of the Model we have Leadership and Management. This is where the seed of sustainability, responsibility or ethical conducts start to grow. The acceptable conducts will then diffuse to the employees in our case both UDBS academic and administrative staff. The market place sphere depicts interaction mode with our clients that include our full time students, those seeking short courses and consultancy services and research outputs. Supply chain is also important to be considered. Do we put into consideration on ethical issues and our values when it comes to the relationship between the schools and suppliers such as high schools and suppliers of other non human inputs? The other sphere depicts our reaction to the community concerns. Is there a mechanism in place to bring long term and beneficial relationship between the school and the community at large? Finally, Enabling environment sphere considers the relationship between the school and the government, media and seeking public opinion on issues related to CSR.
such as: The ability to lead and a desire to serve, to have sensitivity and empathy, to show patience, serenity and humility, an ability to learn and willingness to learn . In addition a leader should demonstrate an ability to inspire, engage and facilitate others, to be seen walking, talking and breathing symbols of corporate responsibility with strong ethical values. A leader should be tuned to dialogue and to be good at listening rather than simply communicating. He/she should be an influencer and to be able to build and add to ideas. Furthermore, he/she should be capable of showing trust and to be trustworthy and employees most valuable asset. These attributes are cemented by being an entrepreneurial, with the assurance to take calculated risks. The question that needs to be addressed here: Is the leadership of the business school involved in setting the overall vision and framework for Social Responsibility? Does the leadership discuss issues relating to Corporate Social Responsibility? Is there reference in the school vision statement to its role in society? The UDBS mission depicts a need to produce responsible graduates and service to the community. UDSM mission statement mentions sustainability while two of the core values are addressing these issues: (i) Professional and ethical standards by upholding the highest professional standards and ethical behaviour, and through openness, honesty, tolerance and respect for the individual in all disciplines. (ii) Social responsibility by promoting an awareness of, and providing leadership to respond to, the issues and problems facing society with a view to ultimately solving and alleviating them. The Responsible and ethical concerns are not supposed to end at the level of mission, vision and core values. There are further steps that need to be taken by the business schools. These values are supposed to be reflected in the behaviour of the individual actors and across the courses offered. We need to have an office which will be dealing with ethics and standards which will eventually contribute to the reputation of the schools. The Business schools are supposed to adhere to the relevant standards like the United Nation Responsible Management Education. Efforts are needed to ensure that external evaluation is conducted in these lines. Managing a long term commitment to responsible and sustainable development requires leadership across the schools, but particularly at the top. Serious commitment will mean changes in the way schools conduct their businesses. It could alter how we deliver our services such as efforts in reducing the consumption of electricity and papers. One of the authors of this paper had a negative experience when he made an attempt to avail a pile of one page printed papers around a heavy printing machine but the reaction among the UDBS staff was negative. These papers were seen as waste that should be treated like that. It could alter how we recruit employees for example encouraging diversity and approaches other than human resource policies like time off for body exercising, provision of gym facilities and time off for that, performance evaluation based on actions. It could alter how and where we purchase supplies: purchasing office furniture only made from certified and from renewable sources; look to increase the use of renewable power generation. Construction of offices and classrooms to ensure less use of energy for ventilation and encouragement of water harvest practices. Internal and External Communications
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Business schools are supposed to communicate their CSR initiatives to all interested parties and its strategy towards achieving CSR is made publicly available. This can be done by including CSR statement in the annual report and by having a CSR newsletter that is distributed to the main stakeholders. Furthermore business schools are supposed to have active participation and contribution to CSR related journals, conferences and workshops. It is also expected to have the UDBS deans statement on CSR available on the school website; The CSR statement is channelled to internal and external stakeholders through the conduit of website and staff briefings. Information on CSR include value statements or statements of school conduct intended for public policies of the enterprise and other codes of conduct to which the school subscribes. Such information would include those related to relationships with employees and other stakeholders. In undertaking communication strategy, it is recommended that the school should explain environmental/social/economic performance to stakeholders and consider their ideas as the school develops. The school should also communicate school responsible activities to the students and other stakeholders through the use of newsletter, flyers, notice boards, meetings, email, press releases, annual reports, website, intranet, events, presentations, case studies, awards, a corridor of pictures and stories. Strategy and Processes The issue at hand at this stage is the consideration as to whether CSR is strategically managed or just regarded as the practice that end with its inclusion in the vision, mission and core values or an existence of a policy. In the business school do we have appropriate and effective governance and budgets that deals with CSR responsibility. As for the community engagement do we have an annual program plan with priorities for activity? At the university wide level how is the CSR issue handled? Currently, at least, Entrepreneurship Centre (UDEC), Quality Assurance Bureau and Institute of Development Studies exist. We need to think who is going to be given the functional responsibility? Is it going to be at the level of the director or coordinator appointed by the Dean or the vice chancellor? There is no single answer as to the location of the CSR coordinating function. Some questions that the school/university might consider in determining the best location for CSR co-ordination in their particular circumstance might include: What is the credibility of the sponsoring department across the University? Is the sponsoring department where the action is in the school? Are the senior people who are expected to be in the sponsoring department passionate and committed to CSR? Does the location within the school/university properly reflect where the most critical issues facing the school are? The above list of questions emphasize the importance of the authority and respect given to the leaders being seen to walk the talk. It is worth mentioning at this stage that the business school needs to look at the available policies and resources and strengthen them to accommodate CSR issues. We can look at the current policies in terms of issues like environment and ask questions like are the new employees inducted in environmental policies? Are incentives given for life-long learning? Do current policies reward CSR impacts? Inconsistencies between what is written or proclaimed and what is happening on the ground need to be avoided. The results will be futile when we have policies, governance and a structure advocating CSR but water is
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flowing on the roads unnoticed for one week. Similarly examination booklets for the three hours examination and two hours examinations are packaged in equal size.
Work place
Most lecturers and administrative staff at the business schools spend at least half of their waking hours at work. The work environment significantly influences their quality of life, their family life and can even affect their health. Through the promotion of professional training and job experience, the flexibility and power of the workers at the business schools will improve and hence their personal growth and fulfilment. Every business school must have an interest in becoming an employer of choice and thus being able to attract the most committed and talented staff. Being an employer of choice requires respect for the talents of all individuals regardless of gender, race, tribe, religion, disability, age or sexual orientation. Business schools ought to be fair in recruitment, promotion and development and ensuring a safe, healthy and fair working environment. Some of aspects of Workplace in the responsible business school context include: (i) The Equality and Diversity of the workforce (ii) Health and Safety of the workforce (iii) Further development of the workforce (iv) Environmental Management and Resource Efficiency. The Equality and Diversity of the workforce A responsible business school recognizes and values differences in staff, thus training is provided to improve diversity knowledge, understanding and behaviour. It is strongly recommended to have sessions that will enable the staff to behave responsibly. Responsibility cuts across the issues regarding their work of teaching, research and service to the community. Further more issues regarding the environment and community services needs to be included in the staff trainings. A key question is whether the management of Equality and Diversity integrated into the school practice? For the school this could mean: A position is created or there is responsible person who look at the diversity within the workplace; The workplace is free from discrimination and harassment on the basis of race, tribe, colour, gender, religion, political opinion, national extraction or social origin; School decisions on recruitment, hiring, placement, training, compensation and advancement are based solely on qualifications, performance, skills, experience and attitude. To a certain extent we could argue that issues concerning qualifications are adhered to. It is expected that the school respects different religions practices and deliberate practices that harm the religious feelings of its members of staff even if those members are the minority are avoided. It is necessary at this juncture to come up with some suggestions that can be adopted in order to enhance or improve the equality and diversity of workforce. There is a need to ensure better work life balance for employees - Be open and create flex-time and other work-life balance policies. It is not expected for those handling huge classes or administrative positions to be treated equally in terms of remunerations and promotions to those handling small classes and dont have administrative positions. It is important for the mothers having very young children to have facilities such as day-care for children which will enable them to work peacefully. If policies are there it is important to ensure that all staff know the policies against discrimination. When advertising for the jobs it is important to think about where we advertise vacancies and how we could reach a wider pool of recruits. In the absence of other barriers, jobs advertised should be open to attract some foreign lecturers. Management is supposed to
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institute a mechanism which will enable talking to staff and find out what sorts of opportunities they see for promoting more diversity. Schools are supposed to set relevant targets for adding to the range of people among their employees, suppliers or customers. We are supposed to address any physical or practical barriers by considering what modifications might make it easier to accommodate for example foreign lecturers or links with places that we dont have existing relationships. If the issue is low pay we are supposed to institute a mechanism which will overcome the obstacle. Lastly but not least it is important to train managers and employees on advantages of equal opportunities and the benefits that the schools will reap by adopting these principles and enshrine them in their policies and practices. Health and Safety of the Workforce Business schools are supposed to take great care of their employees health and safety and minimise practices which will expose their employees to health risks e.g. by providing some incentives which will reduce the working hours where the later is proportionate to rewards. Consideration needs to be made on the structure of furniture for those who take long hours sitting down. Tables can be made in a way that they are adjustable to allow working while standing at times. Offices and class ventilations and quietness are supposed to be given due consideration. The heat may cause health damage and the noisy may result to exercise of more energy which may bring health problems. The schools are supposed to provide information and training on health related matters. Such training include HIV, stress release trainings and the importance of body exercising as proportionate to different age groups. We need to ask ourselves: Is the management of Health and Safety integrated into the business schools practice? In the school this could mean: There is a member of the board or manager who is responsible for the health and safety of the workforce; There is compliance with national standards on work hours, overtime and benefits; There should be Grievance and whistle blowing procedures for health and safety violations etc. To ensure that these practices are adopted some suggestions are as follows: - We must get commitment from the highest levels (Vice chancellor, DVSs, Dean) on health and safety and support others who want to take this further in the various schools. - Identify potential hazards in the workplace. Where these risks exist identify how serious they might be and how likely they are to occur. Long working hours, a lot of part timing, lack of exercise and balanced diet. - Involve employees - they have a working perspective on problems and solutions. - Check regularly that the school is complying with health and safety legislation. - Make a regular place on the management agenda for issues concerning the health of your staff. For example an agenda needs to be there in the board meetings which will look at these issues presented by the responsible officer. Further Development of the Workforce Business schools ought to provide development opportunities for its workforce. This means that school provides employees access to Employee Grades and salary scales. This exists at the UDSM and UDBS in particular in terms of basic pay. Employees are supposed to be offered well elaborated career development plans. These are not supposed to end up with the explanations on how one may climb the ladder they have to go a bit further to include a mechanism that will enable the concerned employees reach the top of the ladder. What we mean here is that the schools must institute a clear and well elaborated mechanism to enable its staff to acquire PhDs and be able to publish. Courses with regard
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to Skills and soft capacity (e.g. interpersonal skills) training are supposed to be offered to all staff. The management of workforce development issues are supposed to be integrated into core business schools operations. There is supposed to be a member of the Board or manager who is responsible for the workforce development; there should be regular performance reviews and support provided for continuous professional development. Some Practical Suggestions are: - Provide educational assistance to employees. To a certain extent the links, school and the university support have helped in this regard - Provide training opportunities and mentoring to maximise promotion from within the organisation. We need to enhance this aspect especially with regard to publications where the issue of encouraging single authored articles may not be fruitful. - Extend training to life management, retirement planning and care of dependents - Think about the skills we need in the business schools, now and for what we hope to achieve in the future. A complete plan is supposed to exist and implementation procedures be put in place. - Consider informal routes for spreading learning - like how employees with valuable skills might transfer them to others through coaching or mentoring. - Where off the job training is relevant and valuable, see how we can help trainees both to accommodate their workload and to focus on their learning. Study leaves low work loads are implemented but we need to ensure that they are utilised appropriately. It is not healthy giving some one study leave and not monitoring his/her performance or creating a mechanism to facilitate his/her studies. Treating equally those who undertake trainings at home and outside the country is not likely to produce positive results. - There is a need to develop management skills too, by reviewing our own performance and learning from experience, or talking to others. Environmental Management The main motive here is to inculcate issues of environmental management to the working place. The schools are supposed to conduct their operations with environmental impact reduction in mind. Putting in mind the work place, business schools are supposed to reduce the negative impacts and increase the positive impacts of its operations on the environment. The schools are supposed to have programs to properly dispose of waste materials and institute programs which will lead to less energy and water consumption at the work place. The use of electronic communication and presentation as opposed to paper work and recycling the answer sheets instead of burning them need to be considered. In order to ensure that environmental management issues are integrated into core business schools operations schools can appoint a manager, responsible for the environmental impact reduction and initiative and ensure that it complies with national standards and relevant certification e.g. ISO 14000. Some Practical Suggestions include: - Schools to Use 'Green' (i.e. renewable energy) power electricity suppliers and energy efficient lighting. Buildings are supposed to be constructed in a way that reduces the use of electricity in terms of lighting and ventilation. - It may be desirable to have labels on top of every light switch to remind less sensitive staff to switch off air conditions and light when they leave their offices even when it means they do so for a short time. In the same vein it may also be useful to remind staff on need to preserve water through such motto as every drop of water counts
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Consider using video conferencing to meet potential partner or students rather than always physically travelling to meetings. This would save fuel and energy. Do a green audit including solid waste and energy e.g. counting rubbish bags and checking utility bills one year compared with the other and check how much has gone down Set targets- aim for 5% reduction in key areas like reams of paper, energy, car, cab, mileage, and water usage and update staff on progress. Discuss with staff concerning these issues. We may be surprised about the number of ideas that they will come up with to help the schools reduce energy and waste.
Market place
The marketplace is a critical meeting point between business schools and society. What we produce will determine the business schools impact on society in the marketplace. Responsible practice in the marketplace for the business school would be considering what impact, value or harm our core products (students) and services generate for the society. A school4 should also attempt as much as possible to keep its approach to marketing, advertising, and procurement fair and honest, as well as effective. Key aspects of Market Place management in the responsible business school context include: (i) Integrity and Standards (ii) Service quality, reliability and safety (iii) Customer relations Integrity and Standards Business Schools are supposed to maintain clear and transparent dealings that affect the clients being students, or users of consultancies and research outputs. Students admissions are supposed to follow the laid down procedures which is the practice at the UDBS. Issues related to marking and processing of examination results are supposed to be transparent and to follow the laid down procedures. In the event when the existing procedures do not accommodate transparency they ought to be changed. Regular internal and independent audits and makes the data publicly available should be the norm. Seriousness on external examinations, self assessment and external assessment of all operations related to the delivery of services are supposed to be instituted. The University of Dar Es Salaam has Quality Assurance Bureau in place which has some standards which we may use to benchmark ourselves. Service Quality, Reliability and Safety Business schools are supposed to maintain the quality, reliability and safety of their services. UDBS has to develop its services with clients (students) in mind by ensuring that they are protected against possible defects. In particular, we should ensure that the services we provide meet all agreed or legally required standards for our clients. We are supposed to provide appropriate and clear information regarding the content of our services and the provision of results. When it is known that we are supposed to teach for 45 hours in semester it has to be 45 hours. Examination results must be provided on the agreed time. We should also abstain from putting students examination papers in more visible places rather distribute them in classrooms. The environment that we put our students during the teaching sessions and where they stay is supposed to be our concern. It is not proper to conduct our teaching when students dont have places to sit or in a very noisy or hot room. The kind of facilities we use to teach have
4
We shall consider the details on how we prepare students to behave responsibly in the second section of this paper.
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to take into consideration the interest of the students. Constructing big theatres and not putting in place a mechanism which will enable learning to take place in a comfortable manner compromise the quality and hence lack of CSR practices on part of the business schools. We need to institute mechanism and infrastructure that will prevent plagiarism during the examination period and when students submit their assignments, dissertations and projects. It is important to have venues where students can sit comfortably and at a distance where copying from one another becomes impossible. Installations of Camera and related devises to monitor the process are important. Attendance of students needs to be looked at and the use of smart card to take attendance for big classes is necessary as a short term measure. In the long term the sizes of classes are supposed to be manageable ones. Customer relations The Business Schools are required to maintain good relations with their clients. In order to achieve this customer feedback must be sought and valued. Business Schools are expected to publish customer charter to accommodate both the students and other clients interests. The charter must be adhered to and implemented. We are to provide transparent and effective procedures that address our clients complaints and contribute to fair and timely resolution of the disputes without undue cost or burden. A mechanism has to be in place to ensure that these complaints are taken care of instead of just being a naive exercise and nothing is happening or it takes long time for the concerns to be solved. Business schools are supposed to ensure that the management of customer relations is integrated into their practices. To help in ensuring that this becomes a practice like others we are expected to have manager responsible for customer relations. In the Business school we have marketing Officer in place but whether she deals with customer relations that may be in questionable. Customer feedback is obtained and fed into planning; we utilize cause related marketing to link customer interests with our CSR; Grievance mechanisms in place for customer complaints. We must decide how and when we communicate with our clients, whether by telephone, e-mail, newsletter, feedback forms or questionnaire, at point of delivery, or as a post delivery follow-up. This is supposed to be a continuous process and it is not expected to wait until when we conduct Tracer Studies which normally happen after five or ten years. A lot can be borrowed from the ongoing work by the UDSM team on communication strategy for the university. Management of customer services after the students are done with their studies, need to be enhanced. The newly established career counselling centre in the UDBS may be able to handle this part provided the office is capacitated. Alternatively, strengthening the existing alumni associations may also qualify. Issues of students request for their transcripts or the provision of these documents to other institutions have to be simplified. Specific officers must be responsible for these activities and in case of complaints for the non delivery of appropriate services actions must be taken instantly.
Supply chain
A business school should ensure, as far as possible, that the standards it sets for its own operations are reflected in its partners. The degree of schools influence over its catchment area is sometimes difficult but the school can aim to help develop responsible local schools and other partners through improving its own conduct across the supply chain to whatever degree possible. A mechanism need to be instituted which well give a message when
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joining that school or when engaging with it in any business dealing to ensure that they dont compromise with ethical, environmental and responsibility issues. They walk the talk and abide to what they have written down and they have effective code of conducts. Some of aspects of Supply Chain management in the responsible business school context include: Shared values, Business Standards, Codes of Conduct and Capacity building The business school must seek to work with partners, suppliers and students that reflect its own values. The Business school values principles on CSR are supposed to be communicated to its supply chain. A mechanism needs to be put in place to screen potential students, other clients and suppliers for commitment to responsible practice. The business school must seek to work with students and other partners that adhere to the same Codes of Conduct and Standards. To enhance this practice a CSR responsible person must be put in place for supply chain management; Specific CSR related requirements are stipulated within contracts with all actors found in the supply chain that will continuously be monitored and audited against set standards for compliance. Set up a regular communication such as a brief newsletter to keep members of the supply chain informed on values and attitudes expected from them that are consistent with the business school credo. For effective implementation, capacity building is indispensable. The students, other clients may come from the contexts where CSR is not well understood therefore it is necessary to ensure that learning is shared along the supply chain. Practical suggestions include to ensure that capacity building on responsible behaviour across the supply chain is achieved include creation of framework with a set of standards on responsible practices and give support to the members of the supply chain to help them achieve them. It may also be desirable to organize events with the business school supply chain (like schools, companies) to share learning on responsible practices and get them involved in our community activities.
Community development
Well managed business schools, can bring significant benefits to the community and the businesses. This is primarily because of the knowledge it produces to the business leaders. A business school can add an extra dimension to this by taking the initiative, and by supporting and contributing to the community through active community engagement. This can take the form of charitable donations, staff volunteering and providing other inkind resources, such as the use of professional skills or the use of equipment and premises. Community development is often the most visible part of CSR and in many cases the latter is defined in this limited perspective. However community development in this context may have a negative impact. This might include poor working ethics of schools alumni on issues of ethics and corporate citizenship, unacceptable working conditions of its employees or the leaders of business school behaving irresponsibly. A good community programme conducted by the business school should go hand in hand with measures to keep these negative impacts to a minimum. Some of aspects of Community Development in the responsible context include: Engaging and partnering with Civil Society Page 18 of 25
Organizations: Economic Development, Education and Community Health: Sponsorship, Donations and employee community engagement. Business school engagement or partnering with local civil society organizations will include Projects which are periodically delivered in conjunction with local civil society organizations or the local community is consulted on issues that may have an impact on them like at the time of developing the curriculum. The business school is supposed to contribute to economic, social and environmental progress with a view to achieving sustainable development. Short term programmes like the ones conducted by UDEC and MDCB are geared towards achieving this objective. Civil society and community engagement management is supposed to be integrated into the business school practice. An officer responsible for the civil society and community engagement is supposed to exist and present the development to the school board. Some practical suggestions which will enable the partnering be more effective include: (i) Buy from local suppliers and strive to hire locally most especially those positions which do not need sophisticated skills. (ii) Find out more about issues in our local community from newspapers, our employees, students, the Internet and the local authority. (iii) Look at our existing resources and how we can use them to benefit the community and our school at the same time. The business school is not supposed to be a burden to its community instead it has to be a blessing. The symbols of CSR are supposed to be noticed by the community and civil society without any difficulty. The business school is expected to contribute to the economic development, education and health of the community in which it operates. The school is expected to provide work experience to local businesses. This can be done by setting projects or assignment which will enable students provide services to the businesses surrounding the business school and at the same time enable them to learn and create good relationship with the local community. The school must seek to prevent any health emergencies resulting from its operations. It is not expected to hear or read from the newspapers that sewage water is flowing out of the premises of the business school and cause health problems to the local community. The business school can support economic development through low cost education programmes and through sponsorships, donations and partnership activities to help those disadvantaged in the society like the orphans or disabled individuals. These helps are not expected to be one off measures but most importantly we expect them to be sustainable. The UDSM and UDBS support to Mbagala Bombing provide occasional support done by UDBS. Some supports have also been made to orphans. When it comes to Sponsorship, Donations and Employee community Engagement it is important for the school to have a clear rationale for sponsorship and donation and to encourage employees to volunteer in their own time. We are expected to have a strategy for sponsorship, donations and employee engagement that complements the CSR approach. To have a systematic approach on these issues a senior management ownership of the sponsorship and donations approach is supposed to exist. Sponsorship and donations are measured and reported for their value and impact on business school reputation and
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employee engagement is leveraged into all CSR activity. Some suggestions which will help in increasing efficiency in this aspect are: - Encourage employee volunteering in the community and with financial contributions and help in kind. - Find out the opinions of employees and get them involved in our community programme. - Find out enthusiastic volunteers among our staff are and how they think the school can support them. - Discuss possible structures for our school programme (maybe match funding, time allowed, awards) - Identify relevant community partners wanting to volunteer support, a local broker or volunteer centre may help
Enabling environment
When a business school makes a firm decision to incorporate responsible practices in its operations and produce responsible leaders may differ with the prevailing practices in the society. Under this situation the business school should attempt, as far as possible, to help create an enabling environment for the school to flourish by helping to improve the operating climate (legal, institutional etc) in which it operates. Borrowing an example of UDEC when it started it had to work hard to change the mindset of the students and lecturers and up to the country policy level. Similar campaigns are supposed to be undertaken by first creating a CSR unit which will spearhead the battle. Key aspects of Enabling Environment in the process of creating a responsible business school are: Government relations, engaging with media and public opinion and capacity building. Business Schools are expected to maintain proper relations with relevant authorities and government in order to advocate for the responsible conducts. The business school is supposed to lobby to government on business standards and codes of practice. The business school has to focus on maintaining a good relationship with the government. This can be done by dedicating significant resources into ensuring it maintains a good working relationship with government regulatory authorities, particularly the Ministry of Education, Finance and Industry and Trade. These relationships contribute to creating enabling environment for the responsible business education, and thus contribute to the social well-being of the society. It is important to have a person in place who will ensure that these relations are fostered and flourished. Engaging with media and public opinion is important to reflect the importance of responsible practices in the society and that the business school is in the forefront on the facilitation change towards good CSR practice. It is expected that the business school is going to use the media to portray its own practice as examples of CSR. The school can also sponsor awards in collaboration with other partners for corporate/business good CSR practice. It is important to emphasise the need to have business school profiling its practice as a good example of CSR. Capacity building and research is important to enable the business school to share responsible practice with others. For the business school this entails participating and speaking at CSR training seminars and conferences. We need to mention here that this paper is a result of some of the academic members of staff participation in CSR training Page 20 of 25
seminars. We need to go further and facilitate CSR case writing and CSR conferences. WE can use our Business Management Journal to encourage CSR papers and probably having a special issue after sponsoring research on CSR. We need to start thinking organizing CSR conferences. CSR can also be looked at when we are seeking for partners in other countries. Conclusion on the Six Spheres of Influence We expect that when the business school accommodate the six spheres of influence in its practices then it will be in a position to profile itself as practicing CSR. This will have an impact on the products it produces in terms of students, consultancies, research outputs and other services to the community. Responsible practices will reach a stage where their motive will be self direct interest of the school; the strategy will be organizational ownership where the majority will be breathing the symbols of CSR; CSR will be at all management levels in which all boards and sections will have CSR discussed, integrated with all functions and daily decision making. Challenges are there which will require building the capacity and capabilities of our staff to deliver the attributes of the 6 spheres of influence as provided in the model. To make this work we need to look at CSR as an opportunity and not as a process of risk mitigation. CSR is supposed to driven by the motive to earn reputation as opposed to quick fix image making like visiting the orphanage centre once a year or occasional financial support to the victims of various disasters. CSR is supposed to be driven by proactive behaviour and not reactive behaviour. We should not think of CSR in terms of philanthropy but it has to be our core function and strategic investment cutting across leadership and management, work place, market place, supply chain, community and enabling environment. Sustainable CSR is supposed to be value driven and to a large extent is not expected to be top down driven. We need to ensure that CSR is built and not bolt on in our business schools. CSR practices are supposed to be led by opportunities and not fear and risk. We need to link them to our strategy and operations by ensuring that the materiality of CSR to our core practices are clear to every actor. We need to manage CSR professionally with practices, policies, processes and systems. We must learn that we can not do it alone.
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On the left hand side of the table we see nine parameters and at the top of the table the four waves. For each parameter there is an indication under each wave on how it is tackled by an organisation. The CSR we are advocating under the four wave approach is for an organisation to try and move to the fourth wave which we think that it is going to make CSR sustainable and more beneficial to all the stakeholders. It is important at this juncture to point out that an organisation/company may sometimes be in different waves depending on the parameter under consideration. It has to be noted that the purpose is not to discourage completely the first wave but we want to encourage the movement from the first wave to the subsequent waves. First wave: For the organisation under this wave the purpose of CSR is just philanthropy that is giving back to the community without considering the long term benefits to the concerned community. For example providing lunch to the orphans and organising a party for them once a year. The purpose here is moral concern that is the orphans are not in a position to have good food and it is a good thing to make them happy at least once a year. There is no any strategy that is established processes in place and the party is just organised on ad hoc manner. There could be an administrator who undertakes this activity on a part time basis. This is a situation where by there is no any existing structure in the organisation which looks at CSR and the initiative is just passive that is something incremental or periphery. The CSR here is completely detached from business activities and just looked at as cost or burden and there is little business benefit expected from CSR. Under this CSR will involve contribution of cash or some goods and will just depend on the managers willingness and if that manager is changed then the activity will stop. Under this kind of CSR we dont expect the practice to be sustainable in most cases it is a one off activity. Second Wave: An organisation in this wave will continue with the purpose of philanthropy but the giving to the community will be to a certain extent strategic. That is the donations will be related to the promotion of the organisation activities. For example UDSM ties its contributions to the education related activities or a bank contributing to the activities which help it securing future customers for example CRDB and the school buses projects. It can obviously seen that the motive of CSR here is the long term interest of the of the firm and the strategy will be more systematic and not ad hoc as there will be a
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manager though dealing with other activities but will also deal with the CSR activities. To a certain extent CSR will start to be linked to the business interests though not entirely. Before contributions are made questions will be asked in the management meeting how are these contributions going to benefit the company? The questions will then lead to contribute to certain target areas and not everywhere for example TIGO is mainly targeting educational institutions and it is not a surprise it has many student customers. Under this wave contributions will be in terms of cash, skills and there will be some guidelines in place which will be followed irrespective of who is the manager. These guidelines are not necessarily linked to business they are just sketchy and changes are frequent. The CSR will be to a certain extent sustainable on the specific issues that have been identified for assistance VODA Com and football sponsorship. Third Wave: This is a higher level of looking at CSR than the second wave. In this level it is no longer strategic philanthropy but the organisation will be seeking long term community investment. Contributions will be made in projects which are going to benefit community in the long term like helping the farmers in increasing their productivity and producing quality products. This example is valid for the manufacturers who depend on their raw materials from the peasants like sugar companies who have long term direct self interests on peasants. At this stage the activities will be conducted in a strategic manner and the organisation will involve consultant in its CSR activities to attach more importance into it. The organisation will no longer just wait for requests on assistance but it will be the one initiating the projects where it is going to direct its CSR activities. The specific business resources will be tied to CSR activities through a proper budget which will have to be defended and its benefit to long term interests of the business are properly presented. It has to be known that the CSR drivers at this stage must be linked to business and there will be guidelines indicating which kind of projects are going to be financed and their linkage to business activities will have to be clearly identified. At this wave the business will be involving NGOs in form of consultants but will also be building the capacity of these NGOs and some of its contributions will be passing through the selected NGOs. Fourth Wave: Under this wave the purpose of CSR will be looked at as something contributing to the healthy business environment. That is the practice of CSR will be looked at its totality and the motive is going to be companys self direct interest, any CSR issue will be seen as contributing to the wealth of the company. There will be a complete organisational ownership of CSR at all levels as CSR will now be occupying the agenda at all management levels. At every level CSR issues will be discussed and accommodated in all decision making. It will now be seen that CSR is part of business and is contributing positively to the growth goals of the firm. CSR at this stage will become part of the business strategy and it is expected that the company will now have its own experts on CSR and it will be part of ongoing business management goals and appraisals. There will be proper reporting mechanism of CSR which will not be necessarily linked to compliance. A company at this stage will be the one accommodating the triple bottom lines and Six Spheres of Influence. Review Questions: 1. Among the various concepts linked to CSR is Sustainability. What it is your understanding of the concept? Discuss the concept purring into consideration on its application in the Tanzanian context and the world. 2. It is not possible to detach CSR from Corporate Governance. Do you agree or not. Why?
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3. Agency theory is relevant to CSR when considering it in its wider perspective. Elaborate the agency theory in support of CSR existing in the body of literature. 4. Carroll model of CSR which is also known as a pyramid model lays down four level of CSR. Outline the four levels indicating their emphasis on CSR issues. 5. Is the Carroll model of SCR applicable in the developing countrys context? Why do you think so? 6. Discuss the linkage between the Carroll model of CSR and the various stakeholders. What are the short coming of this linkage? 7. Triple bottom line (TBL) represents three items in two different ways. What are these three items and what are their relationships? 8. A TBL company is a company that is well managed and can be referred to as a responsible Company. Discuss the relevant characteristics of a TBL company citing relevant examples of companies existing in your context with evidence. 9. Six Spheres of influence model is the current CSR model, list down the six spheres in the order of their importance. 10. Leadership and Management is one element among the six spheres, where is this sphere place in the model and why? Explain the various issues that are supposed to be considered under leadership and management provide relevant examples on your explanation. 11. Charity begins at home What are your views on the statement putting into consideration the six spheres of influence model and the position of the work place content? 12. Satisfying CSR issues with respect to the employees of a company is not an easy task. Discuss the various issues that need to be considered by a CSR company which are relevant to the work place. 13. Ethical, quality and good relationship issues are of paramount importance for a CSR corporation when dealing with its customers or consumers. Elaborate these issues providing good examples of a company you are familiar with. 14. A CSR practicing organisation is expected to ensure that members of its supply chain emulate its practices. There are various methods which can ensure that CSR is practiced in the whole supply chain. Discuss these methods providing their significance with practical examples. 15. Community development is wrong perception of CSR. Do you agree or disagree? What are your reasons for your agreement or disagreement? In your answer provide valid reasons from the literature and the practice in your context. 16. A CSR practising organisation is not expected to be satisfied by its own practice of CSR and forget its own context of operation. Outline and explain in detail the various actions that can be taken by an organisation to provide an enabling environment of CSR practices. 17. One of the methods used to identify the level of CSR practices in an organisation is a four waves approach. Describe the four waves by outlining the various parameters used and their meaning in describing the waves.
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18. Do we expect a company to move from one wave to another in a systematic way? Provide detailed explanation on your answer. 19. Write short notes on the following: i. ii. iii. iv. CSR is an opportunity and not a process of risk mitigation CSR is driven by the motive to earn reputation as opposed to quick fix image CSR is supposed to be driven by proactive behaviour and not reactive behaviour Sustainable CSR is supposed to be value driven and to a large extent is not expected to be top down driven
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