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The scope of engagement

Discuss about the Communication in Business for Corporate Business.

The effectiveness of the corporate social responsibility in different sectors is increasing rapidly. This scenario has become more crucial in the oil & gas and the mining sectors, as its operational attributes have caused a major devastation in the global regions. Therefore, to manage the sustainability, the multinational mining and oil, gas companies have remodelled the corporate social responsibility (CSR) to address the sustainability issues affected the local communities of its operation.

Considering the situation, the current paper aims to produce a CSR audit report for the firm BHP Billiton. To address the issues and its positive aspects, the study introduces the scope of the current engagement. The concept of CSR referring to the academic literature and the benchmark industry practices has also been discussed in the present study. The current CSR commitment of BHP has been analysed to address the gap and the associated advantageous factors as well. A particular focus has been made to evaluate the discrepancy between the communicated intention and the actual corporate practices of BHP Billiton. Finally, based on the outcome, a set of strategic initiatives have been addressed to resolve the current CSR issues of the BHP Billiton.

The researcher has been asked to conduct a CSR audit for the Metals and Mining firm BHP Billiton. The significance of communication skill and its alignment with the standardised business practices have been identified by the current researcher. The complexity of the corporate social responsibility across culturally diversified regions has been described in the present study as well. Finally, the study provides the scope to address the gap in the projected CSR practices with the conducted practice. Based upon the outcome, the researcher again asked to generate strategic recommendations for improving the current CSR deficiencies of the BHP Billiton.

The corporate social responsibility is an approach, which enables the firm, forming the corporate values and attitudes aligned with the strategic goals of the business. In the words of Welker (2009), the CSR approach promotes economic development and the environmental protection as well. The right alignment of the CSR practices in the mining industry can help the firms meeting three dimensions of sustainable development named as economic, ecological and social. Zairi & Peters (2002) also stated that CSR programs put external pressure to the mining industry by employing community investment programs. Also, the CSR initiatives help the firm to manage external business perceptions and maintaining a good brand reputation as well.

Critical analysis regarding the current understanding of the CSR practices

Welker (2009) also stated that the corporate social report concept covers the social, ethical, auditing, accounting and reporting practices and generates a high awareness regarding the moral versus social concern of the firms. The CSR approaches execute three distinctive initiatives such as:

  • Social investment and philanthropy
  • Contribution to the overall public debt
  • Noble pursuit of the core business activity

All the criteria as mentioned earlier are based on the Carroll’s CRS model. However, Kepore et al. (2014) argued that organisations that are prioritising more on the societal value added activity is sharing the following activities as a part of the CSR:

  • A cross-boundary was learning to offer innovation to the community, through the formation of the global partnerships.
  • Framing a value based transformational leadership to meet the large scale vision and mission of the organisation.
  • Utilisation of a wide range of financial and non-financial performance measures which are supported by an audit and reporting system.

On the contrary, Szczepankiewicz & Mućko (2016) argued that the effectiveness of the CSR practices in the mining, oil and gas sectors have been increasingly questioned by the several scholars. It is evident that the actual CSR practices of the mining firms execute a significant gap with the real world considerations. As a consequence, a considerable effort has been offered by the industry to highlight the commitment to managing both the environmental sustainability and serving the local community as well.

It has been observed that the current CSR practices of the BHP Billiton are entirely aligned with the Carroll’s pyramid of responsibility. The current CSR practices of the firm has minimised the cost and maximise the sales volume. Hence, the economic responsibility is maintained. Adding to this,  the legal responsibility is preserved by obeying the specific law and regulations while operating in the community (Fontaine, 2013). The third layer is the ethical responsibility which is maintained by the firm to keep equal values to the employees. Moreover, the philanthropic responsibilities of the pyramid model are maintained by BHP by improving the quality of life of the society. Therefore, it could be inferred that BHP Billiton is conserved a profitable CSR approach to maintain the brand reputation.

Caroll’s CSR pyramid

Figure 1: Caroll’s CSR pyramid

(Source: Fontaine, G., 2013, pp. 112)

The CSR claims embedded in BHP's vision and strategic documents:

The BHP Billiton has implemented four strategic objectives to create sustainable value for the shareholders, employees, suppliers, contractors, host community and other business partners as well. The mission statement is “We aspire Zero Harm to people” (www.bhpbilliton.com, 2016). In this context, Kepore et al. (2014) also stated that the corporate social activity is integral to the overall business of BHP Billiton.

The overriding commitment of BHP Billiton ensures the safety of the society and respect the environment and the community where it is operating. The commitment of the firm indicates that the chosen mining company influence the employees to do as per the vision and mission. In the opinion of Gupta (2010), an operational capability is the fundamental  strategy of the company. The operational activities of the specific firm preserve the values of the organisational goals and objectives. It has been speculated that the critical success factors of the brand are to make a sense of purpose and accomplish the work of preserving the values of the communities, customers and the other business entities. The asset portfolio of the specific company is high–class and continuously developing according to the values and objectives (Hawrysz & Foltys, 2015). Adding to this, the operational disciplines of the specific organisation have been designed to enable the future growth. It has been identified that the suppliers of the firm ensured that there is no enforced, bonded and involuntary labour in the organisation. The firm treats every employee with proper dignity and respect. Considering the words of Macdonald & Macdonald (2010), the standard work culture employed by the organisation satisfies all the levels of the employees within the workplace. Thus, the employees work by maintaining the roles and responsibility to the society. Hence, it could be the CSR practices of BHP is completely aligned with the vision and strategic initiatives.   

Examining BHP’s CSR commitment through the following investigations:

The corporate social responsibility of BHP Billiton is managed through a zero tolerance requirement. It has been made to impose restricted norms on the suppliers to mitigate the corruption, bribery and extortion ratio (Szczepankiewicz & Mućko, 2016).

Employment practices:

As a part of the CSR practices, BHP Billiton has set a benchmark age for the labours, which is around 15 years (www.bhpbilliton.com, 2016). Also, Gholami (2011) stated that the CSR approaches maintained by the firm, ensures ethical recruitment of the labour. The suppliers adhere to the employment norms of the host government. It is also ensured that no employees would be forced to contribute to the company. On the other hand, Gjølberg (2010) mentioned that ethical work practices include maintaining healthy and safe work environment, to treat employees with the greater dignity and respect. This approach has improved the employee trust factor with the management of BHP Billiton, and the firm has become successful managing higher employee retention index as well (www.bhpbilliton.com, 2016).

The social responsibility statement of the business also indicates that the Wages equally satisfy at a minimum, national standards or local industry benchmarks, whichever is higher (www.bhpbilliton.com, 2016).  The suppliers are also restricted to pay the standard minimum wage so that every employee can make an adequate level of living for all its staffs and their family members (Szczepankiewicz & Mućko, 2016). Thus, the CSR practices related to the employment practices have been found aligned each other.

As per the annual report of BHP Billiton, the company has a strong governance process with high standards of the ethical and responsible behaviour. It has been identified that the organisation is one of the active contributors to the societal development. According to the opinion of Michaelson (2010), the governance of the firm aligned the achievements as per the CSR practices. As the company is one of the leading names in the mining industry, respond to the climate change is one of the major priorities of the board of the governance. Considering the words of PrzychodzeÅ„  & PrzychodzeÅ„ (2014), the strategic approach concerning the CSR activities of the firm indicates that BHP believes that the policy framework of the firm includes a set of measures to minimise the carbon emission.

As per the annual report, the firm has developed an effective long-term policy framework to deliver a low carbon emissions technologies to build the probable flexibility (PolatoÄŸlu, 2013). The governance of the firm focuses on the set of values such as the health and safety margin of the society.  The committee of the firm is guided all the measures to support the executives for maintaining the long-term decision making an approach in order to build a sustainable business position. Additionally, the remuneration for the executives is measured by the performance of the group. The long-term incentive plan of the organisation is calculated by scrutinising the five-year performance period.  Hence, it could be inferred that the implementation of the CSR activities is integrated with the governance and performance of BHP Billiton.

CSR claims embedded in BHP's vision and strategic documents:

A goos CSR implementation has helped the firm to create a positive reputation in the competitive marketplace. It has been identified that the suppliers of the firm are also responsible to preserve the CSR  strategies while dealing with the products. Thus, the firm has achieved the loyalty index of the customers. In the opinion of Michaelson (2010), a responsible CSR approaches followed by the organisation has helped to reduce the costs of the products and as well as minimise the environmental hazards and waste. The other positive impact of BHP’s CSR policy is to retention of the employees. It has been observed that CSR of the firm helps to motivate the employees within the organisation and thus, the productivity of the firm is increased gradually.

Considering the words of Fontaine (2013), BHP’s CSR practices ensures the firm to preserve the regulatory requirements while operating in a specific community. Furthermore, good relationship with the local authorities has helped to make the business easily.  The effective implementation of CSR policies has benefitted the BHP to impose positive impact on the operating community by providing public value outcomes (PolatoÄŸlu, 2013).  Moreover, CSR has assisted the BHP to achieve a competitive marketplace by reducing the risk of sudden damage to the sales and the other operational activities.

The management of the firm has to provide a work environment in which every employee can be treated in a fair way. In the opinion of Gupta (2010), respect to the employees is important to ensure a fair employment process within the workplace. On the other hand, the chosen firm has to concentrate on the proper decision making approach regarding all the organisational activities. In this similar circumference, Hawrysz & Foltys (2015) mentioned that BHP Billiton has to incorporate a set of strict rule to minimise the bribery and corruption issues. The prospective laws have to apply equally to all the business consultants and the other third parties.

On the other hand, in terms of the corporate practices, BHP Billiton has to preserve an open attitude program towards the trade unions. Thus, it would be possible to preserve representative functions in the workplace. Adding to this, partnering with the experts is essential to establish a high degree of credibility of the firm. In order to achieve a higher degree level of performance, the management of BHP needs to focus on the leadership strategy. As per the opinion of Branco & Delgado (2012), the incorporation of potential leadership styles is necessary for BHP to mitigate the social issues as well as improve the organisational performance. Thus, it could be inferred that rectification of this kind of discrepancies between the communicated intention of BHP and its corporate practices would improve the overall CSR implementation of the firm.

Employment practices:

Measurement

It is highly essential for the finance department of the BHP Billiton to plan on the contribution figure that needs to invest on the CSR measured to increase the brand’s sustenance in the chosen market. In the framework of the particular contest, Branco & Delgado (2012) determined that an environmental report is regularly audited. The social features of the 18 sustainability report are hardly reviewed externally. Moreover, Companies need to demonstrate the fact that resources are being utilised efficiently, and the community initiatives are taken by the enterprise to make a  positive contribute towards sustainable development. On the other hand, Eizmendi (2008) mentioned that Government also requires being transparent regarding the revenues raised from mining companies like BHP Billiton, to improve the lives of the populations that got directly affected by the impacts of mining operations. The foremost measurements are the assortment of the comprehensive baseline data

The scenario of the mining sector reflects that the majority of the populations prefer to get employment in any of the industry other than the mining sector. In the framework of the present context, Carroll & Shabana (2009) determined that the accidental occurring is major concerns of the population. Thus, the particular sector can make a rare contribution towards the GDP (Gross Domestic Product) of the Australian region. Therefore, the management of BHP Billiton needs to introduce the precautionary measures that improve the safety standards of its employees (Crowther & Reis, 2011). The particular aspects can lead the brand to increase the social contribution by offering sufficient employment to the population. Thus, helping the community to increase its disposable income and simultaneously the economic margin of the region.

Community development

It would be an impossible measure to increase the precautions and improving the recruitment scenario. Therefore, the brand can easily contribute towards the community development programme by investing a relative margin of the figure towards the non-profit organisations. In the similar content, Fisher & Lovell (2009) mentioned that BHP Billiton should not be in the position where the entire developmental program is initiated by the governing authorities rather the management needs to work in the partnership with the government and domestic agencies (Bremer, 2008). The both side efforts would be the active initiative to participate in the developmental community actions.

Contribution in the environmental measures

The CRM department needs to enhance the environmental programs that can limit the environmental distortions. According to Branco & Delgado (2012), the digging activity is a mandatory action initiated by the mining industry, which to a first extent degrades the surroundings.   Therefore, BHP Billiton needs to implement certain precautionary initiatives that limit the mining distortions and environmental pollutions.

Conclusion:

The study evaluates on the significance of the CSR programs in the Australian mining industry. Inference can be drawn from the research work that just like the other mining brands, BHP Billiton’s mining activities are highly responsible for the environmental pollutions. Therefore, the management requires being involving the effective measures that can limit the obscurities.

References:

BHP BlLLlTON PETROLEUM SUPPLY CORPORATE SOClAL RESPONSlBlLlTY POLICY corporate social responsibility requirements. (2010). . Retrieved from https://www.bhpbilliton.com/~/media/bhp/documents/suppliers/hsec-information/petroleum/bhpbpetsupplycorporatesocialresponsibiltypolicyrequirements.pdf?la=en

Branco, M. C. & Delgado, C. (2012). ‘Business, social responsibility, and corruption’, Journal of Public Affairs, 12(4), 357–365.

Bremer, J. A. (2008). ‘How global is the global compact?’ Business Ethics: A European Review, 17(3), 227–244.

Carroll, B. A. & Shabana, K. M. (2009). ‘The Business Case for Corporate Social Responsibility: A Review of Concepts, Research and Practice’, International Journal of Management Reviews, 1468-2370.

Crowther, D. & Reis, C. (2011). ‘Social responsibility or social business?’ Social Business, 1(2), 129–148.

Eizmendi, G. (2008). ‘Ageing economy: From social responsibility to new business opportunities’, Gerontechnology, 7(2), 124-130.

Fisher, C. & Lovell, A. (2009) Business Ethics and Values: Individual, Corporateand Individual Perspectives 3rd ed Financial Times Press

Fontaine, M. (2013). ‘Corporate Social Responsibility and Sustainability: The New Bottom Line?’ International Journal of Business and Social Science, 4(4), 111-113.

Gholami, S. (2011). Value creation model through corporate social responsibility (CSR). International Journal of Business and Management, 6(9), 25–38.

Gjølberg, M. (2010). Varieties of corporate social responsibility (CSR): CSR meets the “Nordic Model.” Regulation & Governance, 4(2), 203–229.

Gupta, S. (2010). ‘Multiculturalism and ethics’, Electronic Journal of Business Ethics and Organisation Studies, 15 (1), 110-120.

Hawrysz, L. & Foltys, J. (2015). ‘Environmental aspects of social responsibility of public sector organizations’, Sustainability, 8 (1), 19-21.

Kepore, K., Higgins, C., & Goddard, R. (2014). What do indigenous communities think of the CSR practices of mining companies? Journal of Business Systems, Governance & Ethics, 8(1), 20–26.

Macdonald, K. & Macdonald, T. (2010). ‘The liberal battlefields of global business regulation’, Ethics & Global Politics, 3 (4).

Michaelson, C. (2010). ‘Revisiting the global business ethics question’, Business Ethics Quarterly, 20 (02), 237–251.

PolatoÄŸlu, H. (2013). ‘Why does social business matter?’ The ETÄ° group and social responsibility’, Social Business, 3(4), 279–284.

PrzychodzeÅ„, W. & PrzychodzeÅ„, J. (2014). ‘Corporate social responsibility for sustainability,’ Management and Business Administration Central Europe, 22(2), 80–97.

Szczepankiewicz, E., & Mućko, P. (2016). CSR reporting practices of polish energy and mining companies. Sustainability, 8(2), 126.

Welker, M. A. (2009). “CORPORATE SECURITY BEGINS IN THE COMMUNITY”: Mining, the corporate social responsibility industry, and environmental advocacy in Indonesia. Cultural Anthropology, 24(1), 142–179.

Zairi, M., & Peters, J. (2002). The impact of social responsibility on business performance. Managerial Auditing Journal, 17(4), 174–178.

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