Changing direction of businesses towards Sustainability Management (SM) and Corporate Social Responsibility (CSR) - A background viewpoint

A background viewpoint (from last years :) )

Sustainability and CSR are relatively new, fashionable terms which are spreading more and more among the international business community. Various NGOs and government organisations are jumping the bandwagon. So many people are asking, what's behind this movement? Is this just another temporary hype? Could SM and CSR be a way for business success?

There are numerous definitions for SM and CSR, but we generally understand SM as a way of managing all our resources in an environmentally friendly, socially responsible and economically wise way. Following the European understanding, CSR can be seen as a corporate specification of SM. CSR is an approach to give a frame for businesses to express with their commitment to society. It is supporting the voluntary integration of social and environmental issues into all business activities beyond regulations. It comprises mainly two dimensions or views. The internal perspective focuses on the management of human resources, health and safety at work, adaptation to change and responsible use of resources. The external view is directed to social handling of community, customer and stakeholder relations with a focus on human rights and global environmental protection. The current situation in Europe demonstrates that setting priorities on social and environmental values can and – if implemented properly – will lead to economic wealth.

The ideas of CSR and Sustainability Management (SM) are not new. Codes of conduct and other methods have a long tradition. For links and more info please see Annex of the Green Paper by the EC in 2001. If we understand them as a kind of philosophy and holistic frame for doing business while preserving our environment and taking care of our people we have common ground that this topic will not fade away in the long run.

In view of its industry application – a general starting point to understand our business environment

The globalisation of markets has a vast impact. It brings about great opportunities, but also serious challenges. One example for very positive effects from our point of view is the pace of innovation of science and technology. Unfortunately, opportunities are not always pursued as they deserve, often for political reasons. Power and market preservation of dominant classes, combined with politically motivated global economic rules, have reversed or delayed many great chances of globalisation. On a smaller scale, similar phenomena of constrains occur internally in companies. Procedures of decision making and execution in reality follow other intentions than only the overall business success. The separation of competence and responsibility leads to poor execution of measures to achieve company goals. Lack of transparency creates the base for insufficient decision making. To some extent, these issues occur in every organisation. Level and impact of occurrence are what makes the difference. For example, to make a meaningful decision on how to modify a process we need a variety of data like maintenance, safety, process or product quality data. This data gives us a base to act and to assess the impact of our decision. Considering for whatever reason only limited information leads to action which certainly not reflects all theoretically necessary decision parameters. Furthermore, if decision makers face only little responsibility for consequences, decisions tend to bypass real needs. At the same time someone else is held for something he could not influence responsible. As a result sooner or later a never-mind attitude will evolve which certainly is not contributing to achieve best possible results.

What has SM and CSR to do with businesses?

There are some underlying coherences. First of all, seeing an organisation and its “human capital” as a key to achieve a company's strategy and goals. Normally, these goals are profit driven. This widely accepted general
assumption applied to the social perspective of SM and CSR leads to a business philosophic key point. To wisely manage our workforce, we should create surrounding conditions to make best use of their intellectual abilities. Plainly spoken, think while you work and take pride in what you are doing. This attitude needs to be encouraged by offering the “right” work conditions that form loyalty between workers and their company. For examples and best practise please see [3]. Of course, this approach must be applied in it's local cultural context. For example, in Thailand in the context of “Kreng Jai”, which can bring about for example limitations of expressed opinions and suggestions. For more comprehensive inter cultural rules in Thailand please see: Working With The Thai, A Guide to Managing in Thailand, Henry Holme... This systematically leads to limited efficiency and effectiveness. Kreng Jai is deep-seated in the social behaviour of Thais. The key to deal with this reality is the integration of decision making and procedures into the cultural context. Consequently, taking cultural conditions into account, social factors can create a work environment which is surely contributing to economic and environmental performance improvements in many ways.

Considering the philosophy of “doing the right thing and doing the right thing right” is the key to efficiency and effectiveness. Combined with a pragmatically applied engineering maxim to do the job only as good as needed, environmentally driven actions can be a main driver for meaningful future oriented production technology and plant organisation. Besides a continuous incremental improvement of resource efficiency, proper organisation of business procedures will improve a companies overall performance.