Corporate Social Responsibility [Gap's Labor Problems & PNOC EDC]

I googled what CSR means and found As You Sow Org, according to them Corporate Social Responsibility (CSR) refers to operating a business in a manner that accounts for the social and environmental impact created by the business. CSR means a commitment to developing policies that integrate responsible practices into daily business operations, and to reporting on progress made toward implementing these practices.

Companies now adays are looking into CSR for their corporation's sustainability. CSR programs also serves as a marketing strategy of the organization promoting their advocacy and civic awareness, some companies also go through the acreditation for ISO 26000 (ISO 26000 is the international standard developed to help organizations effectively assess and address those social responsibilities that are relevant and significant to their mission and vision; operations and processes; customers, employees, communities, and other stakeholders; and environmental impact.)

This week we tackle two cases (Gap's Labor Problems & PNOC EDC)to catch up with last week's session. 

GAP's Labor Problems

The factory in El Savador that made GAP clothes was run by Mandarin International. Mandarin paid its workers about only 12 cents for assembling a clothes that retailed for $20 in the United States. In 1995 GAP's problems at the Mandarin plant began when an employee publicize the sweatshop conditions in Mandarin plant described workers are long hours of work for 56 cents an hour, violence against union supporters, fired the factory when tried to form a union, sexual harrasment from supervisors, lack of clean drinking water, not being allowed to use rest rooms, and being forced to sweep the factory grounds under a torrid sun as a punishment. The consumers would be asked to boycott GAP until the company reinstated the fired union workers and agreed to have an independent third party monitor the plant’s compliance with GAP's own code of conduct. GAP resisted that demands, because the company explained that the workers involved were not GAP's  but were employee of Mandarin Int. as an independent company, so their work conditions were not GAP responsibility, but the responsibility of the Mandarin as the owner.

In my opinion, GAP is still responsible for the workers in El Salvador as they are still representing GAP. GAP should have checked if the employees hired by their contractor are treated fairly. Like in a BPO industry, even they are from a different company, the client has vendor managers that serves as liaison offer between the third party employer and their brand. GAP should have hired a Vendor Manager to handle relationships with manufacturers  and his company’s operational department to ensure quality of supplies, delivery timelines and even working conditions of their employees.

PNOC EDC

A tragic incident happened at dawn of March 26, 2004, a band of about 60 armed extremists seized the company’s P100-million Rig 8 in Barrio Tongonan in Kananga, Leyte demanding ransom payment. PNOC EDC ignored the extremists’ demand, the extremists killed some regular workers who were coming to work. Aquino, who had just president of the company a month before, noticed that there were full of onlookers and just curious at what was going on and no sympathy for the bereaved families. To find out why the townsfolk seemed unconcerned about the tragic incident, Aquino had an informal survey done. The survey showed that residents of the host communities did not relate to PNOC EDC or to its employees. To them the company only exploited the area without giving back anything to the local residents. Local people considered PNOC EDC employees aloof and supercilious.

PNOC EDC should take care of the community where their power plant is located. They should think of sustainability on how they would make the community more involved in working in harmony. It's the company's goal to ensure safety and take care of the resources that the community. It should be a symbiotic relationship for the corporation and the community. 

Enron: The Smartest Guy in the Room

Enron was an American energy, commodities, and service company based in Houston, Texas which was formed in 1985. Enron employed approximately 20,000 staff and was one of the world's major electricity, natural gas, communications, and pulp and paper companies, with claimed revenues of nearly $111 billion during 2000. Enron was named "America's Most Innovative Company" for six consecutive years by Fortune.

In December 2001, Enron files for Chapter 11 protection, becoming the largest bankruptcy in the U.S. history at that time leaving thousand of workers with worthless stocks and pensions.

Enron company is a perfect example of fraud, greed and misrepresentation. Enron Executives only thought of themselves when they embezzle the funds that was intended for company use and for its employees. I would agree with the movie title the smartest man in the room since they've thought of market to market accounting scheme. The said scheme was used to trading securities, when you determine the actual value of the securities at that moment. They cheated their accounting books that they are not reporting any losses but would transfer them to off-the-books corporation.

The collapse of giant corporation is devastating as it affected million of lives, specially those workers who left clueless what had happen to their retirement benefits. As an MBA student it is very important for us to understand why this happened and we can avoid it in the future. Like the old saying goes, greed is the root of all evil, and that's clearly pictured in Enron's case.

Consumer Production and Marketing [Ford Firestone Case]

Let us define first marketing basing on Business  Dictionary:

Marketing is the management process through which goods and services move from concept to the customer. It includes the coordination of four elements called the 4 P's of marketing:

(1) identification, selection and development of a product,

(2) determination of its price,

(3) selection of a distribution channel to reach the customer's place, and

(4) development and implementation of a promotional strategy.

I remember Steve Jobs once said, "You've got to start with the Customer Experience and work back towards the technology" with that being said marketing should be thinking basing on the needs of the customer and their satisfaction. However, companies are trying to deceive the customer with false advertisement like for example using models who were already pale looking for their whitening soaps. 

Consumer nowadays are more intellectual that they can't be easily fool by those false advertisement. They are more observant and thinking the value of the product itself. How I wish that the government will strictly implement the Consumer Act Law that we have to protect the interest of the consumer, in this way the producers will create quality products.

Ford Firestone a deadly combination.

In today's class we discuss the Ford Firestone Case:

In 1990, Ford ran its test for Firestone tires on a mule, a vehicle that mimics the suspension and load bearing capabilities of the explorer. A Ford Explorer under examination is usually run for 200 miles at a minimum of 90 miles per hour at ambient temperature of 90 degree Fahrenheit and both rear and front tires at 26psi. All Explorer that passed this inspection were sold in the market.

In 1998, the first complaints started coming in from overseas while in 1999, the number of claims in the U.S. started to go up. In 2000, a recall was conducted by Bridgestone – Firestone of around 6.5 million tires. As of September 2000, the total number of complaints has reached 2200 involving 103 deaths and more than 400 injuries.

Below are the ACA that our group was able to come up with:

ACA 1: Work together in compensating the victims of Ford and Firestone accidents. Each company should also investigate and address the issues, Ford regarding Ford Explorer while Firestone regarding the safety of their tires.

ACA 2: Ford should solely compensate the victims.Then file a lawsuit against Firestone for the damagesincurred to the company and its consumers.

ACA 3: Ford should make modification on the design and manufacture their own tires that would fit perfectlyFord Explorer. Tie up with the government to make standards regarding tire safety for the consumers. 

 

As a group we are considering the first course of action, which is for Ford and Firestone to work together in compensating the victims and to investigate and address the issues concerning the Explorer and AT / ATX tires. Further testing of these units should be performed and due to the number of incidents, they should consider redesigning the tires, the automobile, or both.

We also thought of long term advocacy that would serves as a marketing and CSR for the company. Ford and Firestone should immediately start a marketing campaign that will still drive sales for its other models / cars and restore the damage that the incident caused

✔️ Engage in corporate social responsibility-related activities that is targeted to safe driving e.g. facilitating seminars and trainings

✔️ Be involved in the lives of those families that were affected by different incidents relating to their car accidents, to help them recover from the said tragedy and ensure that they will live a normal life again 

✔️ Publicly spearhead community service together with the government to provide alternative source of income to those victims of vehicular accidents that were physically injured resulting to change of lifestyle

 

Service Learning Activity: Planning

Foundation Profile:

Organization/Agency: Tuloy Foundation, Inc.​

Contact Name:  Farah Padlan

Title:  Personnel, Marketing Department

Telephone:  775-0484 or 775-0485

E-mail:  www.projdev2@tuloyfoundation.org

Website:  www.tuloyfoundation.org

Address:  Alabang-Zapote Rd. Cor., San Jose Village, Muntinlupa City

Tuloy Foundation, Inc. has been in the service of poor, abandoned and orphaned children, particularly the ones of the streets, since 1993. These children, coming from impoverished families, are helped by the foundation through a comprehensive program that provides the stability and security of a home, education, practical skills training, and equipping them with healthy values for their transformation into contributing members of future generations. Tuloy is heavily dependent on donors and benefactors to cover for food, basic needs and education. As of now, there are about 220 resident and 800 non-resident children in our care that are hopeful because every donation that comes in means that another child can be able to eat, live and study.

Our team decided to do a fund raising activity so that we can help replenish the supply of commonly used medicines in the orphanage. Since one of the programs of the foundation is:

• Wellness projects - expenses for the kids prescribed medicines, medical treatment and check-up, and laboratory tests due to their past history of malnutrition, substance abuse, unhealed traumas and poverty

Tuloy Foundation vision is to ‘redeem from helplessness and empower to choose right’ these almost hopeless kids. We provide everything to rebuild their hope and that starts with rebuilding their dignity. Therefore, the foundation is not only here to fill up the stomach, put a shirt on the back, but to develop the totality of the circumstances and realities in the world.

I was moved with the vision of the foundation, that they believed that even the kids from the slum and had bad experiences in life can stand up once agin and become a better individual who can achieve their dreams and inspire others. The founder saw in those children that they are not different that they can be who they wanted to be with the proper guidance and help. Poverty and circumstance in life was never a hindrance once they put their heart on it. Truly they are inspiring kids.

 

Business Ethics [Brian's Franchise]

It was again discused in our class what Business Ethics is and the role of the government. In my own opinion the government plays a vital role in implementing business ethics, the government should have a strong control for those who would violate it. For example, if the company was caught dumping untreated water in the rivers or lakes, the company's license to operate should be revoked plus the consequences that they have to undo what they have done. In that way there will be lesser offenders while we as a community take care of our environment.  Our government is weak with regards to implementing business ethics, we don't have laws that would protect the people from abuses and unfair practices from monolopolies and big companies. There are no regulations to control and restrain activities of those big companies. What would it be if there is antitrust law in the Philippines?

We also discussed another case study, Brian's Franchise. 

Brian owns a large franchise chain of small indoor farms that grow marijuana in the US. Having become expert in breeding and raising potent marijuana plants indoors while in college, he decided after college to sell his expertise to others. He found several local partners whom he provided with the necessary equipment, marijuana plants, instructions for growing them indoors, and regular consultations. In return, partners gave him a percentage of the profits from each crop. 

Below are my ACA for the case:

✔️ Discontinue the sale of marijuana and related technology and find an alternative way of living

✔️ Continue the sales of marijuana and related technology and tie up with health organizations with advocay of alternative medicines 

✔️ Continur the sales of marijuana in a different place where it is considered legal

I would rather chose ACA 2, since he has the skills and expertise which can be used for better purposes such as helping create alternative medicines for less fortunate a who can't afford western medicines and treatment.

I think we just need to be more open minded to other possibilities.

Business Ethics [Ford Pinto Case]

Business ethics are that functions which leads to choosing right decision at the right time which leads for the welfare of not only business owners but also society, consumers, stakeholders and its employees. Business ethics is considered important that companies are following them. 

The triple bottom line effect is one of the considerations for the businesses to thrive. I strongly believed that it's a domino effect regarding the consequences on every action of the company. If the company take care of its employees, it promotes loyalty and in return they will take care the customers and the company as well. Taking care of the employees is not just simply giving them good salary, this also involves taking into consideration their family, the society they lived in and allowing them to be more involved in the company.

On our fifth session we discussed the case of Ford Pinto. 

During that time, Ford  wanted to create a model that weighed less than 2,000 pounds and that would be priced at less than $2,000, which lead to the creation of Ford Pinto. However, the design for Ford Pinto had a "Fuel Tank Controversy". Ford Pinto's structural design allowed its fuel tank filler neck to break off and the fuel tank to be punctured in a  rear-end collision, resulting in deadly fires from spilled fuel. The Ford Pinto was involved in law suits due its design flaws that caused a lot of deaths, injuries and vehicle burnouts.

Below are my Alternative Course of Action (ACA) for the Ford Pinto case:

✔️ Total product recall and redesign Ford Pinto fuel tanks

✔️ Total product recall and stop production of Ford Pinto instead maintain production of big cars wherein they were known for

✔️ Total product recall and partner with Japanese to produce smaller car which would be safer for the public

Whichever ACA would be chosen the company should always remember the triple bottom line effect. Consumers now a days are wiser that they would patronize you even more if your business is also taking into consideration Mother Nature not just the profit you can get. 

Life Path

Our session for this day was focuses on creating our own life plan. But what is exactly a life plan? According to WikiHow, a life plan is a detailed description of your decisions, intentions, hopes and dreams for your future. Let's just simply say your own goals in life in a detailed manner. 

Why is it important to have a life plan? Life plan serves as a personal reminder of the individual on what he aspires and what is he doing to achieve it. This also helps the individual know his own priorities in life and what to focus on. Having your life plan gives you an accountability regarding your own progress. Another importance of having your life plan is that it gives you an opportunity to know one's self better. 

We were given an exercise to write our own life plan 25 years from now. It's a little difficult to write it since I need time to reflect what do I really wanted to be 25 years from now; this plan includes everything like career, education, family, finances and personal life. The exercise gives me a clear understanding of what o wanted in life and gives me like a road map on how I can achieve it. It will take time to reach each goal in my life plan but  as long as you start taking actions and focusing on it eventually you'll achieved it. Like the old saying goes, nothing is impossible as long as you put your heart into it.