Corporate Social Responsibility of Sugar Dragon Limited

At EssayPandas, we help MBA and EMBA students finish their corporate-level case study projects. For example, Corporate Social Responsibility or CSR Analysis of Sugar Dragon Limited 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 Sugar Dragon Limited 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 Sugar Dragon Limited 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 Sugar Dragon Limited are analyzed by applying the Carroll’s pyramid model.

2. Model application on Sugar Dragon Limited

2.1 Corporate social responsibility (CSR) objectives of Sugar Dragon Limited

Sugar Dragon Limited 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. Sugar Dragon Limited 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, Sugar Dragon Limited 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 Sugar Dragon Limited

Sugar Dragon Limited 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 Sugar Dragon Limited to become profitable so that it could incentivize the investors to invest for business continuity. In its origin, society considers Sugar Dragon Limited 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 Sugar Dragon Limited fulfils its economic responsibility?

Sugar Dragon Limited fulfills its economic responsibility by taking the following initiatives:

• Generate high and consistent level profitability- Sugar Dragon Limited 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. Sugar Dragon Limited 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 Sugar Dragon Limited in minimizing the waste. Waste minimization is not only helping Sugar Dragon Limited in fulfilling its environmental responsibility, but it also enables the business to cut costs and maximize profitability. Sugar Dragon Limited 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- Sugar Dragon Limited 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, Sugar Dragon Limited 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 Sugar Dragon Limited, 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 Sugar Dragon Limited. 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, Sugar Dragon Limited 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 Sugar Dragon Limited 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, Sugar Dragon Limited 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 Sugar Dragon Limited

Legal responsibility of businesses involves compliance with the set rules and regulations. Sugar Dragon Limited is expected to ensure compliance while functioning within society. These basic rules reflect society’s viewpoints of codified ethics, and determine how Sugar Dragon Limited 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, Sugar Dragon Limited 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 Sugar Dragon Limited fulfils its legal responsibility?

• Products/services complying legal standards- Sugar Dragon Limited 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, Sugar Dragon Limited 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. Sugar Dragon Limited 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- Sugar Dragon Limited 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- Sugar Dragon Limited 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- Sugar Dragon Limited 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- Sugar Dragon Limited 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- Sugar Dragon Limited 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, Sugar Dragon Limited 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 Sugar Dragon Limited to behave like a responsible legal entity, and Sugar Dragon Limited fulfills all its legal obligations towards societal stakeholders. Inability to take care of the legal rights of any stakeholder group could damage the Sugar Dragon Limited’s reputation, and company may also face expensive lawsuit.

2.2.3 Ethical responsibility

2.2.3.1 Ethical responsibility of Sugar Dragon Limited

Sugar Dragon Limited has an ethical responsibility towards all key stakeholders. Fulfillment of ethical responsibility requires Sugar Dragon Limited to operate in ethical and fair manner. To embrace ethical responsibility, Sugar Dragon Limited treats all concerned stakeholders including customers, suppliers, employees, investors, and leadership fairly. The ethical responsibility extends beyond normative expectations. By taking the ethical responsibility, Sugar Dragon Limited 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 Sugar Dragon Limited fulfils its ethical responsibility?

Sugar Dragon Limited fulfills its ethical responsibility by taking following initiatives:

• Sugar Dragon Limited 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, Sugar Dragon Limited 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.
• Sugar Dragon Limited 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

Sugar Dragon Limited 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 Sugar Dragon Limited

Philanthropic responsibility denotes the Sugar Dragon Limited’s aim to make world a better place to live. Other than fulfilling the legal and ethical expectations of society, Sugar Dragon Limited 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 Sugar Dragon Limited fulfils its philanthropic responsibility?

In order to fulfil the philanthropic responsibility, Sugar Dragon Limited 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.
• Sugar Dragon Limited 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
• Sugar Dragon Limited 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 Sugar Dragon Limited 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 Sugar Dragon Limited’s corporate social responsibility

Sugar Dragon Limited 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

Sugar Dragon Limited 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

Sugar Dragon Limited 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

Sugar Dragon Limited 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. Sugar Dragon Limited also ensures that all CSR initiatives are effectively communicated to relevant stakeholders through appropriate channels.

2.3.4 Benefits evaluation

Sugar Dragon Limited 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 Sugar Dragon Limited 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 Sugar Dragon Limited to actively engage in CSR activities.

2.4 Drivers for Sugar Dragon Limited’s CSR efforts

2.4.1 Brand image

Strong brand image is a powerful driver behind Sugar Dragon Limited’s CSR efforts. Company uses CSR as a tool to differentiate itself from competitors. The CSR initiatives have helped Sugar Dragon Limited 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. Sugar Dragon Limited 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. Sugar Dragon Limited 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. Sugar Dragon Limited considers CSR a mandatory practices that can no longer be ignored. By investing on economic, legal, ethical, and philanthropic CSR activities, Sugar Dragon Limited has successfully improved its brand image in stakeholders’ mind. By taking initiatives for the environment, social welfare, and benefit of broader stakeholders, Sugar Dragon Limited 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, Sugar Dragon Limited 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.

4. References

Anyalebechi, S. M., & Owugah, L. (2022). Contradictions between Carroll’s Pyramid of Corporate Social Performance Model: A Case of Shell Nigeria. International Journal of Development and Public Policy, 2(5), 183-201.

Baden, D. (2016). A reconstruction of Carroll’s pyramid of corporate social responsibility for the 21st century. International journal of corporate social responsibility, 1(1), 1-15.

Carroll, A. B. (2016). Carroll’s pyramid of CSR: taking another look. International journal of corporate social responsibility, 1(1), 1-8.

Claydon, J. (2011). A new direction for CSR: the shortcomings of previous CSR models and the rationale for a new model. Social Responsibility Journal.

Ehie, I. C. (2016). Examining the corporate social responsibility orientation in developing countries: an empirical investigation of the Carroll's CSR pyramid. International Journal of Business Governance and Ethics, 11(1), 42755.

Gholami, S. (2011). Value creation model through corporate social responsibility (CSR). International Journal of Business and Management, 6(9), 148.

Lu, J., Ren, L., Zhang, C., Rong, D., Ahmed, R. R., & Streimikis, J. (2020). Modified Carroll’s pyramid of corporate social responsibility to enhance organizational performance of SMEs industry. Journal of Cleaner Production, 271, 122456.

Masoud, N. (2017). How to win the battle of ideas in corporate social responsibility: the International Pyramid Model of CSR. International Journal of Corporate Social Responsibility, 2(1), 1-22.

Nalband, N. A., & Kelabi, S. A. (2014). Redesigning Carroll’s CSR pyramid model. Journal of Advanced Management Science, 2(3).

Paul, E., Gibson, J., & Smith, P. (2019). Influential Article Review-The Global Pyramid Model of CSR-What is the Best Way to Perform Corporate Social Responsibility. Journal of Leadership, Accountability and Ethics, 16(6), 1-27.

Schwartz, M. S., & Carroll, A. B. (2003). Corporate social responsibility: A three-domain approach. Business ethics quarterly, 13(4), 503-530.

Štreimikienė, D., & Ahmed, R. R. (2021). Corporate social responsibility and brand management: evidence from Carroll’s pyramid and triple bottom line approaches. Technological and Economic Development of Economy, 27(4), 852-875.