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Theories of Corporate Social Responsibilities

INTRODUCTION

Organizations in the present world is not only carrying out the activities for the desire of profit rather they are more focused on social issues. In layman language these social issues in a corporate world is given a name Corporate social responsibility, which is commonly known as CSR. There have been a significant rise in CSR activities in a decade and continuously growing at a rapid pace(What is corporate social responsibility?, 2016). This study has been undertaken to know various theories of Corporate social responsibilities and how these practices are used by corporate which eventually build their brand image in the mind of consumers.

For the purpose of study Primark(company) has been undertaken which has been in uplifting the environmental protection and sustainability from years. An effort has been made to make the reader of this report aware about CSR activities that corporate are into and a study on the Child labor scandal in Primark. Theory undertaken here is "Triple bottom line" theory to understand the factors which led to Child labor and making recommendations for corrective actions.

MAIN BODY

CSR refers to the responsibility of the organizations to work ethically which not harm the society as whole and does not do any damage to natural resources. For a firm CSR is basically taking into account environmental and ethical impact they make on the society and work in order to make life of people/society easy and convenient. CSR can be done through doing something for the society, introducing products which have no charge, through protection of historical places, maintaining culture in the society, working with NGO's to make world a better place for the society(Corporate social responsibility, 2017). For a company CSR is now seen as a road to increase its brand awareness among the customers, gaining the competitive advantage, etc. It is an investment for a company to lift its brand image and make move towards achieving its primary objectives.

CSR in Primark

Primark have been working in order to improve the life of its workers from many years. Back in 2013 they have partnered with agricultural experts, cotton connect and self-employed women's association to come up with a program known as 'Primark Sustainable cotton program'. This program highlighted the wage increment of workers/farmers and improving the cotton yields(Young and Thyil, 2014). Through various programs conducted by Primark many female farmers have given the employment. Also in order to develop the living standards of garment workers Primak have joined the hands with DFID. Primark have been always in to reducing poverty in five of its key markets: Bangladesh, Pakistan, Burma, Ethiopia and India. The "HER" project in Bangladesh is a reflection of the level of ethical sustainability achieved by Primark in making positive changes to the lives of supplier worker forces.

As Primark has facilitated so many job opportunities internally somewhere they have employed Child as laborers to increase their profits by making cheapest garments which cost shoppers few pounds. Primark was into Child labor practices in Indian refugee camps with 11+ child's sewing/making the T-shirts. This has deteriorated Primark's image in the minds of customers. Consumers need to understand that it is difficult to track down these shops or factories where child labor's are working, Cops have to rely on rare-tip offs . It is the company who needs to understand that what they have gained from the society will eventually be going to society only(Amaladoss and Manohar, 2013).

Triple Bottom Line Theory

Among various theories of Corporate social responsibilities Triple bottom line theory is undertaken to understand the performance of environment and society. It is basically a accounting framework consists of environmental and social dimensions. This theory was proposed by John Elkington to measure sustainability in the corp[orate sector. Triple Bottom line theory plays an important part in supporting sustainability goals.

Triple Bottom line theory is an accounting framework which is a combination of social, environmental and financial factors(Sierra, Zorio and García‐Benau, 2013). This is a modern framework different from traditional one. The level of business, what type of project is being pursued and the area will drive many of the decisions regarding measures to be included. TBL has laid its emphasis more on social and environmental factors, so that it can be measure the performance of the businesses who are into CSR initiatives and up to which extent it has benefited the society. Three variables of TBL are:

  • Economic Measures: These measures as per TBL deals with flow of money. Economic measure's can look at income, taxes, business climate factors, employment, etc. It includes cost of underemployment, establishment churn, job growth, personal income, percentage of firms in each sector. Primark have been in delivering a large number of job opportunities in the poverty prone areas to the rural people from so many years. It has generated so many jobs for women which have given society to look world in a new way. This has increased employment and generated income for those who are below poverty line.
  • Environmental Measures: It represents natural resources and reflect the potential factors that influence environmental measures. It can be a combination of air quality, water quality, natural resources, wastage, land use. If businesses have long-term trends in relation with these factors then they can identify the impact of project or policy on environment(Smith, 2014). It includes: selected priority pollutants, excessive nutrients, electricity consumption, solid waste management, etc. Primark has never been into the wrong use of natural resources but have been in news due to its 2005 child labor issues in the regions of India which has caused Primark a major loss in its brand image. Through its child labor practice it has degraded the environment in future prospects.
  • Social Measures: Refers to social dimensions, generally relates to areas, regions or a community. It includes equity and access to social resources, measurements of education, unemployment rate, median household income, relative poverty, average commute time, violent crimes per capita, etc. Since Primark has been involved in generating employment opportunities for below poverty line people, they eventually have contributed household income levels, poverty is reduced, people are getting skills of sewing the clothes, etc. But on the other hand due to its child labor scandal education scenario have been changed, which has created a negative impact on Primark.

Ethical Trading Initiative

Ethical training Initiative refers to the initiative taken by companies, trade unions and Non-governmental organizations to work together to promote good practices in the environment and society(MacInnis, Park and Priester, 2014). There work is to implement the codes of labor practices, which further includes proper monitoring and independent verification of the practices undertaken. they feel that togetherness in the society will bring a significant change in the society, a positive change. Ethical training initiative is based on incorporating standards into codes of labor practice. ETI has initiated a code of labor practice which is known as 'The Base code'. The base code has 9 code's which are:

  • Employment is Freely chosen.
  • Freedom of association and right to collective bargaining are respected.
  • Working conditions are safe and hygienic.
  • Child labor shall not be used.
  • Living wages are paid.
  • Working hours are not excessive.
  • No discrimination is Practiced.
  • Regular Employment is provided.
  • No harsh or inhuman treatment is allowed.

Main purpose of Ethical training institute was to identify, develop and promote good practices in the society with respect to its labor practices(Leipziger, 2015). For critical areas proper monitoring is been carried out by the authorities to examine the practices carried out has been with proper standards or not. Some of the principles are:

  • Commitment: Here a company gives its membership of ETI, codes and how they going to implement the process, everything is informed through a endorsement. This commitment is send to its suppliers and sub-contractors then a member from senior management is assigned responsibility. The company will ensure that human and financial resources are made available to them. Since commitment is brief of what a team has to do, Primark should also in order to tackle the child labor scandal appoint a authority at every zone it has been into and try make the ways to achieve the desired objectives whitout harming the early age of children.
  • Monitoring & Reporting: After a work has been assigned member companies have agreed to the principle that work done will be assessed through proper monitoring and independent and performance will be measured and the deviations will be found out as per the set standards(Kolk, 2016). Since Primark have been in child labor practices, the authority who framed the commitment part to carry out the objectives need to have a monitoring team in order to a have a look over the operations and asure4 that no child is used in to make the clothes.
  • Awareness raising & training: This principle talks about the training given to relevant professionals which will enable them to apply the code in the proper manner and as per set standards. Suppliers are made aware about the codes that any of such should not be violated. Training the individuals is the need of Primark because this will not make them look for more workers and which eventually does not involve children into this. Also awareing people about the children usage into workstation and try to make them not to do so and if find guilty then they should be fired. fear will make them not to do so.
  • Corrective actions: Member companies have set up the principles to negotiate and implement schedules for corrective actions and where any member breach the said codes then immediate action is taken towards them and might follow with the termination of business relationship with suppliers. Corrective actions needed to be taken in order to get every thing on right for Primark.
  • Management Procedures: Negations will help to develop good relationship among suppliers and companies(Brower and Mahajan, 2013). to understand and implement the said codes it is essential to comply with positive performance measures when assessing a particular personnel. Management of Primark should establish measures which are helpful to evaluate and monitor that child labor practices have not been carried out and if carried out then who is responsible for it how that can be overcome and the responsible party should be fired or necessary action should be taken against him.

Primark & NGO's

Primark's aims to maximize the abilities of its workers, employees all over the world. This means that employees should have equal opportunities based on merit, suppliers should be treated fairly, local communities are respected and supported by Primark and company should take environmental responsibilities seriously, but they didn't have as after the case of child labor was opened to all. Primark if talked about its contribution to the society has partnered with experts, cotton connect and various NGO's to create the Primark sustainable cotton program. This program was to introduce sustainable farming and increase the farmer's income(Bice, 2013). In Gujarat with NGO's Primark trained around 1300 women's who were below poverty line to make them self-capable and earn for their children's education (Walsh and Bartikowski, 2013. With NGO's Primark have Established various job opportunities in the rural areas which have made Primark a major loved store in those areas. Primark with NGO's have created jobs for women's of below poverty line which eventually has created a source of income for them which has imparted certain skills in them.

Also company was indulged in Sustainable cotton program which has been highlighted in two reports: Women for agriculture, Addressing gender inequality. In addition Primark has joined the hands with DFID( Department of international Development) to improve the lives of garment workers in developing markets. Primark has cultivated the society with the help of NGO's for many years((Leipziger, 2015)). But as and when News flashed that Primark is part of child labor practices for the financial benefit, many perceptions changed.

RECOMMENDATIONS

Having an understanding of the topic and by the in depth analysis of the subject mentioned above, certain recommendations have been drawn:

  • Just like to govern the trade between the two different countries institutions have been set up, that applies to here also under CSR also these type of bodies should be set up to govern the negative practices which are going on.
  • Primark should make a concerned body to look after its CSR initiatives.
  • Primark should follow triple bottom line theory in order to have a measure of its services.
  • Ethical Training initiatives should be implemented in the organizations to follow good practices.
  • NGO's Should have a monitoring on the companies CSR practices.

CONCLUSION

From the above report it has been conclude that to carry out Corporate social responsibilities a organization need to exami9ne its resources and have certain set of guidelines in relation to follow the codes given by Ethical training initiative. Primark has been indulge in various CSR activities right through the years but this has made Primark more concern about its profits and eventually Primark has been found guilty in violating the codes given by ETI, which is Introducing child labor in making cheap garments. Further more4 recommendations have been given in relation to CSR practices and Primark's do's and don't s have been discussed to attain the CSR status again.

REFERENCES

Books and Journals

  • Amaladoss, M. X. and Manohar, H. L., 2013. Communicating corporate social responsibility–A case of CSR communication in emerging economies. Corporate Social Responsibility and Environmental Management. 20(2). pp.65-80.
  • Bice, S., 2013. No more sun shades, please: Experiences of corporate social responsibility in remote Australian mining communities. Rural Society. 22(2). pp.138-152.
  • Brower, J. and Mahajan, V., 2013. Driven to be good: A stakeholder theory perspective on the drivers of corporate social performance. Journal of business ethics. 117(2). pp.313-331.
  • Kolk, A., 2016. The social responsibility of international business: From ethics and the environment to CSR and sustainable development. Journal of World Business. 51(1). pp.23-34.
  • Leipziger, D., 2015. The corporate responsibility code book. Greenleaf Publishing.
  • MacInnis, D. J., Park, C. W. and Priester, J. W., 2014. Handbook of brand relationships. Routledge.
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