Corporate Social Responsibility of Greening the Balanced Scorecard

At EssayPandas, we help MBA and EMBA students finish their corporate-level case study projects. For example, Corporate Social Responsibility or CSR Analysis of Greening the Balanced Scorecard mainly relates to the subject of Business, further touching upon sub-topics like organizational development, value proposition, corporate governance, economic development, ethics, leadership, and social responsibility.

Corporate Social Responsibility or CSR Analysis of Greening the Balanced Scorecard helps ascertain the company's responsibility towards the three P's, i.e., Profit, People, and Planet. This CSR Analysis will help the managers at Greening the Balanced Scorecard figure out their social responsibilities and run their business operations following the global business norms. Here below is a quick rundown of the CSR case solution. Contact us for further help in custom CSR Analysis.

1. What is Cooperative Social Responsibility 

Carroll’s CSR pyramid explains why and how business organizations should realize their responsibility towards society. The model was introduced by Archie B. Carroll in 1979, who highlighted four key corporate social responsibility (CSR) dimensions into the framework- economic, legal, ethical, and philanthropic responsibility. The economic responsibility lies at the bottom of the pyramid because without achieving the economic objectives, a company cannot fulfil its legal, ethical, and philanthropic responsibilities.

According to Carroll, CSR refers to the business behavior that is economically profitable, compliant with the law, is ethical and socially supportive. The primary business responsibility is to make profits and comply with the law, and then go beyond these obligations by taking discretionary initiatives.

In 1991, Carroll categorized the CSR model into four dimensions by using a pyramid, which illustrated how businesses could build their character along the four tiered pyramid. Since its introduction, the model holds strong relevance to the contemporary business environment. Although, the pyramid design is still under discussion and at often criticized for not considering the contextual factors, the model can be practically applied to understand the corporate social responsibility efforts of any business organization. As the model is easily understandable, it makes practical application for organizations easier, as they understand how they can build their character to reach at the top of pyramid.

Overall, the model provides a conceptual framework for organizations, and encourages them to think holistically while formulating CSR strategies. If any of the level is missing, the organization cannot reach the highest CSR level.

In this report, the CSR strategies of Greening the Balanced Scorecard are analyzed by applying the Carroll’s pyramid model.

2. Model application on Greening the Balanced Scorecard

2.1 Corporate social responsibility (CSR) objectives of Greening the Balanced Scorecard

Greening the Balanced Scorecard aims to reach the carbon neutrality, reduce environmental externalities, promote voluntarism among employees and donate to the charity. Company is committed to the highest social responsibility standards across the whole supply chain. Greening the Balanced Scorecard ensures that all its suppliers comply with the environmental standards, take care of workers’ safety, treat them with respect and dignity and adopt environment-friendly manufacturing processes. To achieve these CSR objectives, Greening the Balanced Scorecard is taking various economic, legal, ethical, and philanthropic initiatives, which are explained in the next section.

2.2 Dimensions of corporate social responsibility

2.2.1 Economic responsibility

2.2.1.1 Economic responsibility of Greening the Balanced Scorecard

Greening the Balanced Scorecard fulfills its economic responsibility by focusing on the practices that support long-term business growth, while accomplishing the set philanthropic, environmental, and ethical standards. Company balances its economic decisions with the overall impact on society. It offers products and services that society needs, and makes a profit from them to continue business operations.

The economic expectation is considered basic social responsibility, because society expects Greening the Balanced Scorecard to become profitable so that it could incentivize the investors to invest for business continuity. In its origin, society considers Greening the Balanced Scorecard as an institution that produces and sells goods/services to make a profit in a way that benefits all stakeholders.

2.2.1.2 How Greening the Balanced Scorecard fulfils its economic responsibility?

Greening the Balanced Scorecard fulfills its economic responsibility by taking the following initiatives:

• Generate high and consistent level profitability- Greening the Balanced Scorecard strives to generate high profitability on a consistent level by leveraging the opportunities that help business in targeting new products and customer markets. Through effective and efficient business management, the company is able to reduce the costs, which further increases the profit margin.
• Minimize costs- Cost minimization is another key economic objective. Greening the Balanced Scorecard reduces its costs by actively managing the variable costs. Company also invests on automated technologies to reduce the labor costs. Cost reduction objective is also achieved by diligently tracking the expenses, and making the most out of available resources.
• Reduce waste- Another important initiative taken to reduce the costs is the introduction of the new manufacturing process that is helping Greening the Balanced Scorecard in minimizing the waste. Waste minimization is not only helping Greening the Balanced Scorecard in fulfilling its environmental responsibility, but it also enables the business to cut costs and maximize profitability. Greening the Balanced Scorecard is also aiming to increase the use of recycled products that could lower the material cost and benefit the society by consuming lesser resources.
• Increase operational efficiency- Greening the Balanced Scorecard strives to operate a business at high-efficiency level. To do this, the company arranges regular training sessions to reduce the error rate and streamline communication between all supply chain partners. The company encourages continual improvement culture and arranges mechanisms to measure the performance. Data is collected to review and refine processes, and information required to fix the operational inefficiencies is made easily accessible. By doing so, Greening the Balanced Scorecard has been successful in maximizing its operational efficiency, which reflects into reduced errors, improved accuracy and enhanced customer satisfaction.
• Increase product and service quality- Customer retention is another important economic objective of Greening the Balanced Scorecard, which is achieved by increasing the product/service quality. The company has infused the quality into work culture, and employees are trained to deliver superior customer service. Periodic surveys are arranged to take the opinions of customers, and collected data is then used further enhance the product/service quality according to customers’ expectations.
• Maximize sales- Sales maximization is another economic objective of Greening the Balanced Scorecard. Company adopts various strategies to maximize the sales. Through successful cost reduction, the company offers discounts to customers to drive sales. Other key measures taken to achieve the sales increase target include- expansion to new markets, introducing new products, and adopting effective marketing and communication strategies.
• Maintain strong competitive positioning- To strengthen the competitive positioning, Greening the Balanced Scorecard invests on emerging innovative technologies. Company invests on market research to know its customers, and strengthens collaboration with its strategic partners to proactively respond to the external environmental changes.

These all economic initiatives are helping Greening the Balanced Scorecard in fulfilling its economic responsibility so that it could remain sustainable and continue its business operations for benefit of all involved stakeholders.

2.2.1.3 Relevant stakeholders

By taking economic initiatives, Greening the Balanced Scorecard fulfils its responsibility towards- shareholders and investors who expect the company to generate an attractive return on investment, customers who expect high product quality at reasonable prices, and employees who expect a fair and safe work environment. Fulfilling these all economic responsibilities provides the foundation of CSR pyramid.

2.2.2 Legal responsibility

2.2.2.1 Legal responsibility of Greening the Balanced Scorecard

Legal responsibility of businesses involves compliance with the set rules and regulations. Greening the Balanced Scorecard is expected to ensure compliance while functioning within society. These basic rules reflect society’s viewpoints of codified ethics, and determine how Greening the Balanced Scorecard could conduct its business practices in a transparent and fair manner. Local, regional, and national level legislators define these laws and regulations, which ensure that the business makes a profit without compromising over the greater good of society. In order to avoid the lawsuits that may result from the non-compliance, Greening the Balanced Scorecard has appointed a compliance officer on a high-level position in the organizational chart to ensure the business meets all basic legal responsibilities.

2.2.2.2 How Greening the Balanced Scorecard fulfils its legal responsibility?

• Products/services complying legal standards- Greening the Balanced Scorecard produces products/services that meet legal standards. Product safety standards are met, and only those products/services are produced that are legally allowed. While advertising products, Greening the Balanced Scorecard avoids vetting misleading claims about products and business practices to defraud consumers.
• Labor law- Labor law encompasses various laws related to employment, remuneration, work conditions and industrial relations. Greening the Balanced Scorecard complies with labor law by complying with the minimum wage law for workers. Workplace safety is ensured by complying with the occupational health and safety standards. Company complies with the industrial relations act to manage the relationship with workmen and settle industrial disputes. Company also ensures the effective implementation of anti-discrimination laws to provide an open, inclusive and equitable work environment.
• Contract fulfillment- Greening the Balanced Scorecard fulfils all its contracts with internal and external stakeholders to protect their rights as per each agreement. It fulfills general employment contracts, partnership agreements, indemnity agreement and contracts related to property and equipment lease. Company also fulfills its legal duties towards suppliers by remaining fair in its dealings with vendor organizations. It also helps suppliers in maintaining the approved quality and expected delivery standards.
• Intellectual property- Greening the Balanced Scorecard takes care of all intellectual property laws to enforce and protect the rights of owners and creators of inventions. The intellectual property areas include trade secrets, patents, trademarks and copyright laws.
• Privacy and information protection- Greening the Balanced Scorecard has clearly stated its privacy policy, and takes all relevant measures to protect the customer information. Management has appointed data security and compliance incharge who take appropriate measures to prevent the identity theft.
• Environmental law- Greening the Balanced Scorecard strictly complies with the environmental legislations to reduce the hazardous waste, and takes care of the biopersity and conservation issues to prevent pollution incidents.
• Paying taxes and other duties- Greening the Balanced Scorecard pays all taxes and other duties to the government as a responsible corporate citizen. Company keeps all its accounts clean and transparent to facilitate the government in tracking business’s economic state.

2.2.2.3 Relevant stakeholders

Overall, Greening the Balanced Scorecard is a law abiding, a social responsible enterprise that operates within the regulatory boundaries, and complies with various laws like environmental, criminal and labor laws. All major stakeholders including customers, suppliers, employees, regulators and general society have expectations from Greening the Balanced Scorecard to behave like a responsible legal entity, and Greening the Balanced Scorecard fulfills all its legal obligations towards societal stakeholders. Inability to take care of the legal rights of any stakeholder group could damage the Greening the Balanced Scorecard’s reputation, and company may also face expensive lawsuit.

2.2.3 Ethical responsibility

2.2.3.1 Ethical responsibility of Greening the Balanced Scorecard

Greening the Balanced Scorecard has an ethical responsibility towards all key stakeholders. Fulfillment of ethical responsibility requires Greening the Balanced Scorecard to operate in ethical and fair manner. To embrace ethical responsibility, Greening the Balanced Scorecard treats all concerned stakeholders including customers, suppliers, employees, investors, and leadership fairly. The ethical responsibility extends beyond normative expectations. By taking the ethical responsibility, Greening the Balanced Scorecard embraces activities, practices and standards that are not necessarily written down but are expected by the society. It could be difficult to differentiate between ethical and legal expectations as legal regulations are based on ethical premises but the ethical expectations go beyond basic laws.

2.2.3.2 How Greening the Balanced Scorecard fulfils its ethical responsibility?

Greening the Balanced Scorecard fulfills its ethical responsibility by taking following initiatives:

• Greening the Balanced Scorecard sets higher minimum wage to its employees, and makes sure that all workers get competitive pay that justifies the efforts they exert to accomplish the assigned tasks and responsibilities.
• Besides complying with the laws dictating workers’ rights, Greening the Balanced Scorecard takes a step ahead by taking employee welfare initiatives. Company trains its employees to take better care of mental and physical health, and adopt a more environmentally responsible attitude. Company also helps its employees in their professional development, and develops work environment that makes work life balance easier for employees.
• The company guarantees that all raw material is ethically sourced from the suppliers take care of environment. All products and services across whole supply chain are sourced in an ethical manner. Company further ensures that the products obtained from the suppliers are sourced through sustainable methods.
• All stakeholders including suppliers, employees and distributors are treated with respect and in fair manner.
• The company adopts ethical labor practices for supply chain partners that include using products that are certified as meeting the fair-trade standards.
• Greening the Balanced Scorecard realizes its responsibility towards environment, and beyond complying with the basic environmental laws, company is actively taking initiatives to reduce the carbon footprint, and invests heavily in environment-conscious businesses.

2.2.3.3 Relevant stakeholders

Greening the Balanced Scorecard recognizes and respects the evolving moral and ethical standards that are adopted by the society. Management prevents infringement of ethical standards while pursuing business objectives, and acknowledges that the ethical behavior and integrity goes beyond compliance with basic laws and regulations.

2.2.4 Philanthropic responsibility

2.2.4.1 Philanthropic responsibility of Greening the Balanced Scorecard

Philanthropic responsibility denotes the Greening the Balanced Scorecard’s aim to make world a better place to live. Other than fulfilling the legal and ethical expectations of society, Greening the Balanced Scorecard also fulfills its philanthropic responsibility by getting actively engaged in the volunteer work. The company dedicates a specific portion of earnings on charity.

2.2.4.2 How Greening the Balanced Scorecard fulfils its philanthropic responsibility?

In order to fulfil the philanthropic responsibility, Greening the Balanced Scorecard takes the following initiatives:

• Company trains its employees to spend specific hours every month in doing volunteer work for the society.
• Every year, company dedicates a specific portion of earnings for various societal causes.
• Greening the Balanced Scorecard also raises funding for the educational programs, and supports health initiatives for the betterment of society
• Company offers free products/services to the people who cannot afford them.
• Company supports the volunteer projects that are executed for broader social welfare
• Greening the Balanced Scorecard provides voluntary assistance to the public and private educational institutions to educate the society and make education affordable for all.
• Company also voluntarily assists the fine and performing arts, and arranges the cultural events for society.

2.2.4.3 Relevant stakeholders

The fulfilment of philanthropic responsibility enables Greening the Balanced Scorecard to meet the expectations of society and the general public. It strengthens the company’s brand image, and effective communication of the charitable work increases the stakeholders’ trust over business operations.

Multiple stakeholders indirectly benefit from the company’s philanthropic work. Like investors benefit from improved brand image, customers prefer brands with a socially responsible image, and employees take pride in getting associated with an organization that takes care of society. The society and general public for which the philanthropic actions are taken are the stakeholder group that derives direct benefit from the company’s philanthropic work.

2.3 Critical success factors of Greening the Balanced Scorecard’s corporate social responsibility

Greening the Balanced Scorecard has been successful in implementing economic, legal, ethical and philanthropic CSR initiatives. This section outlines some factors that are considered critical for CSR success.

2.3.1 Human resource

Greening the Balanced Scorecard has knowledgeable, skilled and competent employees who are responsible to implement CSR initiatives. Workforce owns the company’s CSR objectives, and is skilled to accomplish them.

2.3.2 Integration of CSR in strategic decision making

Greening the Balanced Scorecard has not only integrated the CSR into routine activities through a well-planned change process, but also considers CSR objectives while taking important strategic decisions. Such integration is vital for achieving the CSR objectives across all four dimensions.

2.3.3 Stakeholder relationships

Greening the Balanced Scorecard understands that successful implementation of CSR initiatives requires the company to manage close relationships with all key stakeholders, including customers, employees, supply chain partners, and general society. To do this, the company tailors its communication and relationship management strategies according to the relevance, importance and impact of each stakeholder group. Greening the Balanced Scorecard also ensures that all CSR initiatives are effectively communicated to relevant stakeholders through appropriate channels.

2.3.4 Benefits evaluation

Greening the Balanced Scorecard has identified CSR performance measurement metrics that are used to evaluate the return on investment. Through benefits evaluation, the company convinces the investors about how investment on various CSR initiatives is benefitting the business in either direct, or indirect manner.

2.3.5 Long-term view

Finally, it is very important to hold the long-term view. Top management of Greening the Balanced Scorecard understands that investment on CSR initiatives cannot give a tangible economic return in the short run. Therefore, management adopts a holistic view while evaluating the CSR benefits for the organization.

After understanding the critical success factors for successful CSR implementation, next section now discusses the drivers that motivated the Greening the Balanced Scorecard to actively engage in CSR activities.

2.4 Drivers for Greening the Balanced Scorecard’s CSR efforts

2.4.1 Brand image

Strong brand image is a powerful driver behind Greening the Balanced Scorecard’s CSR efforts. Company uses CSR as a tool to differentiate itself from competitors. The CSR initiatives have helped Greening the Balanced Scorecard in positioning itself as a socially responsible entity, due to which it is trusted by existing customers. CSR initiatives have also generated a positive brand image in potential customers’ minds.

2.4.2 Regulatory pressure

Although, adoption of certain CSR initiatives (like ethical and philanthropic) remains voluntary, but the regularly pressure to ensure active engagement in CSR activities is gradually making CSR inevitable. For instance, the government’s rising pressure to reduce the carbon footprints is pressurizing company to engage in environment protection initiatives.

2.4.3 Customer pressure

Customers are becoming increasingly vigilant of business’s social and environmental performance, and prefer brands with positive CSR image. Greening the Balanced Scorecard responds to this pressure by taking CSR initiatives that meet customers’ expectations.

2.4.4 Competitor pressure

Considering the impact of CSR on tangible and intangible business performance, competitors are widely adopting CSR as a tool to achieve business objectives. It has created an environment in which investment on CSR efforts has become almost inevitable. Greening the Balanced Scorecard has to invest on CSR to remain relevant in the intensively competitive market.

3. Conclusion

To conclude, business organizations must understand the importance of corporate social responsibility to ensure long-term survival. Greening the Balanced Scorecard considers CSR a mandatory practices that can no longer be ignored. By investing on economic, legal, ethical, and philanthropic CSR activities, Greening the Balanced Scorecard has successfully improved its brand image in stakeholders’ mind. By taking initiatives for the environment, social welfare, and benefit of broader stakeholders, Greening the Balanced Scorecard has gained positive media coverage, which has strengthened its positioning in a competitive marketplace.

Customers feel satisfied when they purchase product from a company that helps the community. Employees also take pride in getting associated with a socially responsible organization, and winning the investors and shareholders’ trust over business operations also becomes easier when business demonstrates its ability to meet the expectations of all stakeholders without compromising over economic objectives.

By wisely investing on the CSR initiatives, Greening the Balanced Scorecard has been successful in boosting its long-term growth and profitability. While living in a globally interconnected world, it is important for businesses to collaborate with all stakeholders and take care of each other’s’ needs that could eventually benefit themselves.

Although, Carroll’s CSR pyramid model provides valuable guidance about how companies can ensure their long-term survival, but model does not provide guidance about how businesses could avoid the clash between CSR and business objectives. Model also focuses on only four CSR dimensions and does not identify the contextual variables that may positively or negatively influence the firm’s ability to implement CSR strategies.

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