International business strategy

Introduction

Corporate social responsibilities of the business is necessary component and business strategic planning for all the small and medium sized enterprises (SMEs), where through the corporate and social responsibilities, the companies can manage their operational activities and secure future sustainable development (Scherer, 2018). It is necessary for the organisations to manage the social responsibilities and other economic and philanthropic responsibilities for sustaining in the industry and operating their business activities in an ethical manner. The aim of the study is to analyse the corporate and social responsibilities of the organisation Lego, which is a Danish toy manufacturing company, through which the companies are trying to maintain their business ethics and conduct the operational activities sustainably to handle their social responsibilities and secure future sustainable development.

Conceptualising and explaining coherently the complex range of business’ social responsibilities

There are several models and theories of corporate social responsibility which provides a scope to the SMEs to follow suitable steps and strategic planning to be responsible and conduct the operational activities ethically so that it is possible for the organisations to secure future sustainable development. As per the triple bottom line theory, the companies focus on the people, planet and profit. Through maximisation of the profitability and sales volume, the organisations try to maximise their economic responsibility, where the economic activities such as cash flows, revenue generation and net income are in the positive directions which indicates that the organisations conduct their operational activities efficiently to maximise their profit volume (Scherer, 2018). This is effective to create values for the stakeholders, who are contributing positively in the company to maximise the organisational performance. In this regard, managing the people is another strategic planning of the company Lego, where as per the triple bottom line theory; the organisations are able to contribute positively in social development. It is the responsibility of the organisations to invest on charitable home, education, health and wellbeing and social resources, so that the quality of life of the public living in the society can be maximised well.

These are important activities of the SMEs through which they are sustainable in the business and secure future development and growth successfully. Apart from that, responsibility towards planet is another important aspect as per the Triple bottom line theory of corporate social responsibilities (Visser, 2016). In this regard, the Lego focuses on maintaining the environmental resources as well as mitigating the greenhouse gas emission, protecting natural resources like water, social and air, as well as the organisations recently are concerned about the energy conservation and land use, in which the companies are trying to reduce the wastage for landfills as well as the renewable energy production are increasing rapidly for energy conservation (Lego, 2019).

Figure 1: Triple bottom line

 Triple bottom line

Stakeholder theory is also important in this context where the organisations try to maximise the values for all the stakeholders. The major stakeholders who are engaged with the SMEs re such as employees, managers and owners which are mainly the internal stakeholders of the business and the external stakeholders are such as suppliers, distributors, society, government, creditors, shareholders and the customers. It is the responsibility of the company Lego to create values for all the stakeholders by providing them high return on investment (Singh and Agarwal, 2017; Spence, 2016).

Figure 2: Stakeholder’s theory

Stakeholder’s theory

There is some contradiction between the Freidman classic model and Freeman’s CSR model. As per the Freidman model, the organisations mainly focus on profit maximisation which in turn helps the companies to maximise the values of shareholders. On the other hand, as per the Freeman’s model, the organisations need to focus on maximising the interest of all the stakeholders in order to generate revenue and maximise profitability (Thijssens, Bollen and Hassink, 2015). In this regard, the organisation Lego recently, focuses on creating values for all the stakeholders that in turn helps to secure future sustainable development and maximise the business profit.

Figure 3: Freidman Vs Freeman CSR model

 Freidman Vs Freeman CSR model

Successfully applying philosophical and practical/pragmatic models of social responsibility to specific situations

As per the Carroll’s CSR pyramid, there are fur responsibilities for the SMEs which are economic, legal, ethical and philanthropic. As per the economic responsibility, it is the duty of the firm Lego to be profitable so that it is possible to maximise the values of the stakeholders engaged with the companies. Through profit maximisation, it is easy for the organisation Lego to provide high return on investment and serve the stakeholders efficiently to sustain in the business (Singh and Agarwal, 2017). In this regard, the legal responsibilities are also important where with proper intervention of the government, the organisation Lego needs to follow the laws and legislation of conducting the business in the society where there are environmental rules like low toxic disposals in the society and reduction of greenhouse gas emission so that the companies can run their activities legally (Carroll, 2016).

Figure 4: Carroll’s CSR pyramid

Carroll’s CSR pyramid

Ethical responsibilities are also necessary to follow the ethical code of conduct and run the business ethically, where managing transparency and accountability of the business, maintaining fairness and equality, proper return on investment are necessary to follow to make the business ethical (Cordeiro and Tewari, 2015). In addition to these, philanthropic responsibilities are also important where the SMEs like Lego need to focus on creating values for the social communities as well as provide good contribution to create public welfare. In this regard, positive contribution in the neighbourhood projects, charity and NGOs are effective to create social values and maximise the welfare of the public (Carroll, 2016). These are major responsibilities of the SMEs, where the company Lego tries to create values for all the stakeholders who are engaged with the organisation by providing positive return on investment, mitigating negative environmental aspects and positive contribution on the social development.

In addition to this, CSR in excellence model is based on the development of the organisational activities to fulfil the requirements of the customers. As per the model, the activities of Lego must be based on outcome orientation, leadership style, people development, customers and partnership development for managing the social responsibilities. In this regard, Lego faces problems in managing the customers and retaining them for long run due to financial crisis and in this context, it is necessary for the organisation to invest more on customers service management services so that the customers could not face any difficulties to make their purchase decision from the company (Lego, 2019). Additionally, the EFQM excellence model is also effective to identify the ways that the organisation manages their operations efficiently (Spence, 2016). In this regard, Lego has the responsibility to fulfil the values for the stakeholders across the social communities to make the brand sustainable. The company just focus on managing the supply chain to create values for the social communities, where Lego needs to develop green supply chain for reducing the negative environmental footprint. As per the model, leadership style and people management as well as policies and strategic planning are helpful to create value for the customers and also for the social communities by reducing negative environmental footprint (Masoud, 2017). In this regard, Lego needs to invest on social development projects such as educational field or supporting the charity home, so that the company can create values for the societies as a whole.

Applying audit skills to evaluate the ethical and sustainability standing of a range of organisations

It is the responsibility of the organisation Lego to manage the business activities in an ethical manner so that the brand can expand their business sustainably in the society by creating values for all the stakeholders. in this regard, the business ethics including creating values for all the people as well as social communities, managing transparency and accountability at the workplace, managing Human Rights at workplace, maintaining Health and Safety at Workplace as well as managing fairness and equality are effective strategies for the company to expand their business ethically and run their operational activities legally (Thijssens, Bollen and Hassink, 2015). Moreover, for gaining attention of the customers, the company Lego focuses on reducing the wastage and utilising renewable resources for creating pollution free environment which is necessary for maximising the values for overall social communities (Nurunnabi, Alfakhri and Alfakhri, 2019). The principles of managing business ethics will be evaluated further,

Integrity needs to be managed at the workplace, where Lego needs to appoint internal auditor which can handle the legal compliances of the firm.

Managing objectivity through gathering data, enhancing communication and cooperation is also necessary for managing business ethics where continuous improvement of the performance and managing the information are effective for running the organisational activities ethically.

Confidentiality needs to be managed well, where the safety of the data and information is necessary at the organisational context. In this regard, the organisation Lego needs to implement latest technology of ICT and cloud computing for managing the internal data and information through improving audit system (Scherer, 2018).

Competency is also required for Lego to perform better and create values for the social communities and run the business ethically, where the organisation needs to focus o sharing skill, knowledge and experience and enhance the performance of the firm successfully (Singh and Agarwal, 2017).

Through the above mentioned audit skill, the organisation Lego can manage the activities of the firm in long run and create values for the stakeholders, engaged with the business. Effective problem solving skill is mandatory to conduct organisational audit, where the individual try to identify he problems and develop proper planning to maximise the interest of the stakeholders (Nurunnabi, Alfakhri and Alfakhri, 2019). Moreover, effective decision making skill and critical analysis skill are also necessary for successful audit, in which the individual is able to make effective decision for maximising the contribution of the firm Lego in the society after proper critical analysis of the organisational profit, identifying the stakeholders and acknowledging the ways to creative social values (Cordeiro and Tewari, 2015). Apart from that, continuous monitoring and evaluation process is mandatory for successful audit system where the organisation Lego can develop effective tactics to fulfil their economic, philanthropic and social responsibilities in conducting the business ethically.

Conclusion

It can be concluded that, managing the corporate and social responsibilities provides a scope to the organisations to give positive environmental footprint and positive brand image in the society, where the strategic planning of the firms are helpful to create values for all the stakeholders and secure future development. Through the fulfilling the social responsibilities, economic and philanthropic responsibilities, the organisation Lego can develop their business activities and in this regard continuous environmental and social audit further helps to improve the organisational activities towards fulfilling the corporate social responsibilities.

Reference List

Carroll, A.B., 2016. Carroll’s pyramid of CSR: taking another look. International journal of corporate social responsibility, 1(1), p.3.

Cordeiro, J.J. and Tewari, M., 2015. Firm characteristics, industry context, and investor reactions to environmental CSR: A stakeholder theory approach. Journal of Business Ethics, 130(4), pp.833-849.

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), p.4.

Nurunnabi, M., Alfakhri, Y. and Alfakhri, D.H., 2019. CSR in Saudi Arabia and Carroll’s Pyramid: what is ‘known’and ‘unknown’?. Journal of Marketing Communications, pp.1-22.

Scherer, A.G., 2018. Theory assessment and agenda setting in political CSR: A critical theory perspective. International Journal of Management Reviews, 20(2), pp.387-410.

Singh, R. and Agarwal, S., 2017. Demystifying CSR and corporate sustainability, and its impact on the bottom of the pyramid. In Essays on Sustainability and Management (pp. 177-192). Springer, Singapore.

Spence, L.J., 2016. Small business social responsibility: Expanding core CSR theory. Business & Society, 55(1), pp.23-55.

Thijssens, T., Bollen, L. and Hassink, H., 2015. Secondary stakeholder influence on CSR disclosure: An application of stakeholder salience theory. Journal of Business Ethics, 132(4), pp.873-891.

Visser, W., 2016. The future of CSR: towards transformative CSR, or CSR 2.0. Research Handbook on Corporate Social Responsibility in Context, p.339.

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