Analysis of Sharp’s 2016 annual report, on the company’s stand on CSR.
SHARP Australia’s business philosophy guides the company to have mutual prosperity with stakeholders by ensuring they contribute to the welfare, benefits, and culture of people worldwide. In order for Sharp to attain the above values and succeed in corporate social responsibility, they are extremely driven to ensure all employees are creative and also sincere. (SHARP, n.d.). This is the basis for Sharp that enables it to achieve their ethical responsibilities to their stakeholders who include, the community they work in, employees, vendors, customers and even the board members.
Sharp’s 2016 annual report portrays the company’s transparency of business practices which in turn proves their adherence to their ethical responsibility. Under risk factors, Sharp Company is honest in listing down principal business risks in under 18 categories that may immensely impact the stakeholder’s decisions. This aids in managing expectations which in turn gives them room to fulfill their ethical obligations. For instance, under business partners, the company shares their need to do business with alternative suppliers under special circumstances such as unexpected natural disasters or severe price erosion that may lead to performance deterioration.
Sharp shares vital information publicly in instances of negotiating tactical deals and partnerships. The company shares publicly its agreement with Hon Hai Precision Industry Group and goes the extra mile to name the number of shares in the deal, the price per each share and the dates the shares would be released. The company also shares that it has forged alliances with Qualcomm and Samsung Group to enhance competitiveness and improve profitability. This honest information helps improve the business’s overall image with the partners and may draw support from the public resulting in sales.
The implications for global SCR practice
According to Roy Williams of the Guardian, building a socially responsible supply chain is paramount in the say of businesses in the kind of company they are and the values that they hold. Ethical considerations should be part and parcel of every buying decision for businesses. (Williams, 2013). Various organizations have objectives that aid in their social and business responsibilities but tend not to apply them in the supply sector. Roy reinstates that every buying decision should consist of ethical criteria so as not to overlook commercial considerations.
The sharp company in their annual report share that they are willing to do business with alternative suppliers if their currents business partners are met with unfavorable conditions that make them unable to deliver their services, which could be accidents or natural disasters. Roy suggests that companies should use the “how would it look to you test.” This test places the business in the shoes of the suppliers to enable them to understand first-hand these unfavorable circumstances and in turn feel differently about strict rules on tolerating some activities by suppliers.
To ensure supply chain responsibility, Roy shares on the importance of organizations communicating their ethical achievements. Buying decisions in companies are greatly impacted by ethical deliberations. Giving back to the community for an organization has various benefits such as it enables the company to build a good reputation in the community, develops the community in terms of security or even education and also the organization leaders gain respect from their employees. By sharing their initiatives public, companies build a good rapport with various suppliers.
Business publications on Sharp’s CSR policies and practices in relation to ethical responsibilities and their sustainability
According to the Guardian, Sharp Company has accepted a multi-billion-dollar bailout from Taiwan’s Foxconn which is estimated to be $6.2bn. This decision has resulted after many years of Sharp being constantly on the edge of bankruptcy. These losses the company has faced have been as a result of inflexible rivalry from the low-cost competitors. (France-Presse, 2016). Sharp, despite its financial troubles, is still a leader in technology and this sale portrays the top management's fulfillment of ethical responsibilities which brings about organizational sustainability. The company is keen on providing for the needs of their current consumer, as the new owners are keeping the company intact, and ensuring the brand lives on to cater for the needs of future generations.
According to Led inside, in 2015 Sharps’ restructure brought about the Mihara plant shutdown, discontinuing of four plants and also the shutdown of three LED plants located in Fukuyama. Judy reports that the company’s dire losses in 2014 were as a result of wrong business strategies and poor display sales that resulted in a gross loss of 30 billion Japanese Yen. This restructures resulted to the termination of very many employees which portrays the lack of trust and confidence on their contractual and statutory obligations (Judy.Lin, 2015). The company, as a way of remaining relevant, was in the process of seeking out financial aid from Mizuho Bank and Bank of Tokyo-Mitsubishi UFJ and this saved the company from bankruptcy and enabled it to stay in business till 2016 where they sold it to a Taiwan company. This unwavering spirit of Sharp, against all odds fighting to remain relevant, clearly demonstrations their determination to drive in sustainability.
Computer daily reported in October 2016 of a deal between Apple and Sharp going into business together whereby Sharp was to secure a supply of LED organic displays for the iPhone’s next generation of devices. Sharp announced its 57.4 billion yen deal to advance the OLED manufacture facilities and guaranteeing production distribution by June 2018. Sharp is clearly keen on building employee trust and with this publicly announced deal, the employees feel encouraged of their job security and as a sign of good faith may show commitment which enables the business sustainability growth over the years (News, 2016).
David Richards of Channel news reports on staff queuing up to take redundancies after the company chose to move from Huntingdale to North Ryde. The sharp company fired their contracted merchandisers in 2015 in favor of staff appointed people. This employment decision failed to entice these employees who opted to leave the company within a few months. The exiting employees used a clause in their contract to obtain their redundancy payments that stated they were employed in Hunting dale and not Ride (Richards, 2016). It is the law for every employer to pay redundancy fees to employees once their jobs become redundant. By Sharp paying these fees portrays a sign of good faith and responsibility to their employees and their contracts. This company respects the rule of law when it comes to its employees which in turn enables them to charm to the stakeholders. This in the long run drives sustainability.
Foxconn Electronics, the new owners of Sharp according to Channel news Australia, are keen on re-entering the Australian TV market with their Japanese made televisions. Foxconn has high hopes of leveraging Sharp’s assets in order to diversify its business portfolio. They believe that the acceleration of the company’s efforts to produce displays organic light-emitting diode, or OLED will give them an opportunity to compete against big brands such as LG (Channel news, n.d.). Foxconn aims to increase Sharp’s global sales 10-12 million units in 2017 and this profits will drive the company’s sustainability in terms of increased revenue, recruitments and the overall organization’s performance. This drive from Foxconn proves their responsibility in providing for the community goods that they can rely on and those that are on the same level as other brands such as Samsung and LG. This commitment to the societies needs positively appeals to the stakeholders as it shows promise and trust in terms of delivery and supply.
According to Channel news, in 2016 Sharp CEO Tai Jeng-wu will step down as Sharp’s president once the company makes profitable returns at the next net level. He specified that the company’s shares will be returning to the Tokyo Stock Exchange in 2018. Tai’s determination depicts how vital the role of the senior management team at Sharp is in guiding the company to aid in building the country’s economy. This move also benefits the company in terms of sustainability by raising capital for the business through the sale of shares to the public and also in raising profits through stock investments (Channel news, n.d.).
According to CRN, Sharp Company in 2015 was cutting 3,000 jobs in its Japanese workforces and also in America. The company was carrying out this exercise through voluntary retirements and they expected to spend about $321 million in retirement-related expenses. The losses the company was experiencing in 2015, resulted in them in lowering the pay scale for their domestic workers to curb personnel costs by $535 million (Staff, 2015). This job ax negatively affects the ethical responsibilities of the company towards its employees. Lack of faith in management and job insecurities to both laid off workers and those still in employment lowers morale which prevents the company from achieving profits and remaining sustainable.
Academic research in support of above findings in relation to ethical responsibility
The collection of staff redundancies by some employees of Sharp after the company decided to move to cheaper offices from Huntingdale to North Ryde is the characterization of market ethics by using Adam Smith’s “invisible hand” metaphor. Adam explains that every individual neither expects to promote the community’s interest nor is he/she aware of how much they are promoting it. He or she intends only to his own security, to personal gain and as in many other cases is led by an invisible hand to come up with results that were not part of his/her intentions, to begin with (Smith, 1976). The morality of the market may to some extent permit behavior at odds with ordinary morality. In business, for instance, self-interest behavior may be required to realize socially beneficial outcomes. The employees felt they were unable to accept the major change and opted to leave and find greener pastures.
Friedman shares that the one social responsibility of any business is to use its resources and engage in activities that will increase profits as long as the decisions are in line with the rules of the business game (Milton, 1970). This means that companies are in a position to participate in open and free rivalry without deceit. Sharp in 2016 got a deal with Apple to secure a supply of LED organic displays for the iPhone’s next generation of devices. Sharp announced its57.4 billion yen investment to develop the production facilities. In 2015 after Sharp’s restructuring, the company sorts out financial backing from two banks which saved it from bankruptcy. Sharp by fighting to stay open and relevant for many years despite major setbacks in losses has fulfilled its social obligation and duty to its employees.
According to Donaldson and Dunfee, community fairness is very important worldwide in ensuring the reliability and survival of the society where the organization has established itself. It is vital for all organizations to adhere to simple concepts such as respecting human dignity and keeping their promises so as to maintain trust and good faith amongst their stakeholders (Dunfee, 1999). Sharp’s CEO Tai Jeng-wu shared that he will step down as soon as the company makes profitable returns and that the company will be re-joining the Tokyo Stock Exchange in 2018. In 2015, the company was cutting down 3,000 jobs through voluntary retirement exercises and had set aside $321 million to cater for the retirement-related expenses. The company portrays to care about human rights by recognizing the employee's contracts and the law. The promise to return to the stock exchange proves that the company is working hard to ensure sustainable growth with better opportunities.
In conclusion, to a large extent, Sharp Company has managed to fulfill its ethical responsibilities to its stakeholders. The company over the years has gone through various difficult challenges that almost resulted in the shutdown of the company and brand name. By following the law during employee termination, being honest in their trouble, signing big deals that kept the company afloat and coming up with strategic ways of remaining sustainable, they have proved they are socially responsible and are creative and also sincere.
Donaldson, T., & Dunfee, T. W. (1999). Ties that bind: social contracts approach to business ethics. Boston, MA: Harvard Business School Press.
France-Presse, A. (2016, February 25). Japanese electronics giant Sharp bought by Taiwan company for reported $6.2bn. Retrieved May 17, 2017, from https://www.theguardian.com/world/2016/feb/25/japanese-electronics-giant-sharp- bought-by-taiwan-company
Home. (n.d.). Retrieved May 17, 2017, from https://www.sharp.net.au/about/about- Sharp/environmental-social-activities/corporate-social-responsibility
Milton, F. (September 13). “The Social Responsibility of Business Is To Increase Its Profits.” The New York Times Magazine.
More OLED Screens For iPhone. (n.d.). Retrieved May 17, 2017, from https://www.channelnews.com.au/more-oled-screens-for-iphone/
Richards, D. (2016, November 13). Sharp OZ, Staff Queue Up Take Redundancies. Retrieved May 17, 2017, from https://www.channelnews.com.au/sharp-oz-staff-queue-up-take- redundancies/
Sharp Restructure to Entail Mihara Plant Shutdown. (n.d.). Retrieved May 17, 2017, from https://www.ledinside.com/news/2015/3/sharp_restructure_to_entail_mihara_plant_shutdo wn
Smith, A. (1976). An inquiry into the nature and causes of the wealth of nations. Oxford: Oxford University Press.
Staff, R. (2015, March 19). Sharp to axe 3,000 jobs. Retrieved May 17, 2017, from https://www.crn.com.au/news/sharp-to-axe-3000-jobs-401870
Williams, R. (2013, July 29). How to build a socially-responsible global supply chain. Retrieved May 17, 2017, from https://www.theguardian.com/global-development- professionals-network/2013/jul/29/responsible-business-retail-supply-chains.