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INDIVIDUAL ASSIGNMENT

QUESTION:

Why is it important for a company to balance its social responsibility efforts with its need

to generate profits?

Discuss your findings with examples.

Introduction

What is social responsibility?

There is no single definition of social responsibility but it can be said as acting with

concern and sensitivity, aware of the impact or the disadvantages of the action to the others. It is

generally to be understood to include the obligations of a business to protect the interests of its

customers, employees, suppliers, and the general public. Social responsibility goes beyond the

firm’s relationships with their customers, includes the areas of environmental protection,

consumerism, support for education, compliance with governmental regulations, response to

community needs and firm’s contributions to the community organizations. Besides of business

and government, activist group and local communities can also associated with social

responsibility. Different entities have different responsibility, for example a state has to ensure

the citizens civil right and the business organizations should concern with human rights of their

employees.

Beyond social responsibility

Social responsibility can be divided into two main parts, the responsibility to human and

the environment.

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Responsibility to human means being responsible to people, for the action of people and

the affect of any action to the people. This is concern with the way of the organization in treating

their customers with respect and attention, which is not for profit but taking care of the

customer’s wants and needs. In order to carry out the social responsibility, an organization tries

to perform as best as they can, instead of being irresponsible and often try to keep away

themselves as much as possible from any problem they faced. For example, when the customer

feel that the organization have done something wrong, the company will take the blame and do

some steps needed to fix the problem. Organization has the moral responsibility that empowered

them to help people and not to harm them. Social responsibility is a doctrine that state, whether it

is a village, town, state, corporation, organization, government or individual, each have the

responsibility to the society as a whole.

While responsibility to environment means that the organization has

responsibility to the environment and the world around them than to individual because the

impact on the environment is larger and broad than the impact to consumer. An organization

which concern with its social responsibility, will take every consideration into account when

making their decision. This has been proved to become one of the reasons of the company to be

profitable in the long run. Nowadays, many companies are more concern in fulfilling their social

responsibility and every choice they made affect the consumers environmental. Some companies

produce products that are packed in more than required packaging thus all the cost and impact

was passing directly to the consumer but some become more socially responsible. They design

their packaging to be more environmental friendly such as using items that can be recycle rather

than using and wasting more resources that can be used for another important task.

Social responsibility and profit making

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The need for a company to balance its social responsibility and gain profits is crucial as

they have to give some good contribution to the public as a whole.

The communities where the company operates are very important to them. The scope of

social welfare is wide and varied. The companies can measure their performance, assess the

impact and be committed in making further improvements for the community. The companies

also can gain good image from the community by doing their social responsibility. They are

viewed by the public as a good company who are concern about them. So, the public will turn to

their products and services as they have the good impression about the company and buying their

product or using the services will be a support or reinforces for the company to stay longer in the

business, being well known and gain more profits. A company will also fulfill their social

responsibility to enable them to gain appropriate standard as an achievement for the company.

The standard will enable them to be known as a company who are balance in their efforts in

gaining profits and taking care of the society. Companies also involve in doing social

responsibility to reduce risk management by gaining good impression from their business

partner. They recognize that robust management of more diverse and complex risk, sound

business operations and stable earnings growth are essentials to gain broad trust of market and

customers.

Performing social responsibility

Kellogg Company

Company overview

There are some companies that have been active in fulfilling their social responsibility.

One of them is Kellogg Company. This company was established in 1906 by its founder W.K.

Kellogg. It is a leader in producing cereal and convenience foods including cookies, toaster

pastries, cereal bars, frozen waffles and meat alternatives. With only 44 employees in its early

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opening, today it have more than 26 000 workers, operates in 17 countries and sells its products

at more than 180 countries around the world. The company’s brands include Pop-Tarts®, Cheez-

It®, Rice Krispies®, and Chips Deluxe®. The sought by W.K. Kelloggs “invest my money in

people”, act as a guide to the company and their people in accomplishing their social

responsibility.

Commitment and contributions

Their commitment in doing this as a good corporate citizen includes protecting the

environment, selling nutritious products and advocating healthy lifestyles, acting with integrity

and adhering to the highest ethical standards, promoting diversity in work force and partnering

with diverse suppliers and also ensuring a safe and healthy work place. For communities, this

companies choose to focus on three major area; helping children and youth reach their potential,

improving opportunities for minorities and women and also strengthening the communities. They

support many program and endeavors, contribute money and products and encourage their

employees to voluntarily their time and talents to improve the communities.

They contributed for communities by giving donations for children and youth needs for

their educations and potential growth and invested in a program that benefits this generation.

One of the programs is Help One Student to Succeed (HOSTS), a program that helps teachers in

creating individualized academic plans that can be delivered to the students anytime and

anywhere. Hundreds of Kellogg’s employees and retirees become a volunteered in this program

as mentors to help the students succeed in the school. For minorities and women, they provide

scholarship for talented young people and involves in many programs such as in Girls on the Run

programs that encourages girl in age between 8-13 to be more active, eat right and live a balance

and healthy lifestyle. They also support for the American Heart Association’s Go Red For

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Women, an American heart association for heart diseases. Each year this company donates $20

million of their food products for the hunger and relief to help people in needs.

Kellogg company encourage eating well and healthy living, based on the philosophy that

people can improve their health by eating a balanced diet and engaging in regular physical

activity. They produce high-fiber cereal products that reduce the risk of heart disease and cancers

that also help in achieving and maintaining a healthy body weight. This company valued and

encourages the diversity of their employees backgrounds, experiences, styles, approaches and

ideas that inspires the innovation to gain competitive advantage in serving customers around the

world. This company is very committed in providing safe and healthy work place for their

employees. They encourage employees to search for health rules and practices that can be

applied to their job, include taking precautions to protect themselves and co-workers by reporting

accidents, injuries and unsafe conditions. Kellogg are very concern about the environment. They

work very close and have good cooperation with the local communities, suppliers and

contractors, government agencies and other organizations in improving for better environment.

They have their own environmental policies that promotes and maintain environmentally

responsible practices for the benefits of the customers, consumers, employees and the

communities. They practices their policies by using heat recovering systems, turn wasted food

into animal feed, practices water conservation and reuse and participate in recycling programs.

Besides focusing in energy use, they also held an audit program to measure air and water quality,

waste management practices, spill prevention and control, hazardous materials management and

employee awareness. This company also use completely recycle materials for their packaging for

safe, efficient and environmentally reason which is applicable with their official environmental

policies.

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By performing their social responsibility very well, this company manages to stay longer

in the market and gain lots of customers, including gaining more trust among their business

partners and increased their profits each year.

Lenovo Company

Company overview

Another company which involves actively in applying their social responsibility is

Lenovo Company. Lenovo is an international technology company that formed from the merger

of Lenovo Group and IBM Personal Computing Division. This company develops, manufacture

and market cutting-edge, reliable, high quality PC products and professional services for their

customers around the world. Company’s headquarters are located in Purchase, New York, USA

with branches and enterprise sales organization worldwide which employs more than 19 000

peoples. This organization is committed to four company values that are; the customer service,

innovative and entrepreneurial spirit, accuracy and truth seeking and trustworthiness and

integrity.

Commitment and contributions

Lenovo is one of the companies which do very well in performing their social

responsibility. As they have strong commitment to the social responsibility, they are very strict in

ensuring their products, employees, sites and suppliers to apply the responsibility in their

business practices. Lenovo are going deeper to integrate the core value of customer service,

innovative and entrepreneurial spirit and integrity in its business and policies and procedures in

the aspect of quality and safety of their products, employee’s welfare, managing a global supply

chain, ethical corporate behavior, social investment and environmental affairs.

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Lenovo is very clear in ensuring the best quality and safety of their product and until now

they are still continually put on their efforts in developing and evaluating new safety initiatives.

They are focusing on the safety of their products at the entire lifecycle of the production from

manufacturing, transportation and installation for customer to use, service and disposal. This is

done to ensure that the product produced meets all legal requirement and safety rules for every

product they sold. Their safeties practices are aim to help to reduce the risk of personal injuries,

property damage, ergonomic discomfort and data loss while using their product. Their emphasis

for product safety and quality enables them to gain high customer’s satisfaction, delivering

quality products, solutions and services that help them a lot in maintaining their company in

competitive business world. For this company, the people inside the organization are the most

important assets for the company. Lenovo are very committed in providing safe and healthy

working environment by supplying their employees with safe and relevant products and

equipments for use in their daily work. It also focuses its efforts in preventing accidents at work

place, injuries and illnesses among its employees. This company was known as a great employer

for its employees as it provides compensation packages and abides for its employees which is

applicable at minimum wage requirements at wherever places it operates. Lenovo also very

concern and committed to the high standards of integrity and responsibility while working with

all the stakeholders as they provide wide ethical guidance to all its employees. They also focus in

helping people around the world to increase their standard of living, such as encouraging

business development and social entrepreneurship. It also shows its respect on the intellectual

property rights of individuals or company such as, supporting China in fighting the piracy in that

country.

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Conclusion

As a conclusion, companies must incorporate their social obligation with the need to

earn profits. Meeting the society’s expectation may be expensive but it will worth with the

company’s goal to gain profits. Companies which are consistent in fulfilling their social

responsibility may bring themselves to be as one of the members of the community that may

attract loyal customers for the good image they have. Doing social obligation will not turn profit

seeking businesses into charitable organization. Practicing social responsibility may leave

positive impact on profits as they can convince more customers and remain stable in business

world.

References:

• http://en.wikipedia.org/wiki/Social_responsibility (1/10/2007)

• http://www.gapinc.com/public/SocialResponsibility/socialres.shtml (1/10/2007)

• http://www.investorwords.com/4616/social_responsibility.html (1/10/2007)

• http://www.entrepreneur.com/encyclopedia/term/82646.htmlefinition: (3/10/2007)

• http://www.pc.ibm.com/ww/lenovo/about/sustainability/ (6/10/2007)

• http://en.wikipedia.org/wiki/Societal_Marketing_Concept (6/10/2007)

• http://www.entrepreneur.com/encyclopedia/term/82646.html (6/10/2007)

• http://www.pc.ibm.com/ww/lenovo/about/sustainability/index.html(10/10/2007)

• http://www.tamron.co.jp/en/envi/report_2006/report05.html (10/10/2007)

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