Unsuccessful Approach Of Corporate Social Responsibilities By Unilever

Failure of Corporate Social Responsibilities for Unilever

Discuss about the Unsuccessful Approach Of Corporate Social Responsibilities By Unilever.

In the current time, contemporary business organization is having different goals and objectives to meet. This is due to the reason that earlier, the key objective of the business organization was only maximizing the profit. However, in the current time, apart from the profit maximization, meeting the social responsibilities is also one of the objectives for the business organizations. Therefore, in order to initiate the social responsibilities, business organizations initiates activities through the means of corporate social responsibilities (Cheng, Loannou & Serafeim, 2014). This refers to the concept of a part of the profit gained by the organizations in any kind of social welfare. The key objective of initiating corporate social responsibilities is to give back to the nature and the communities from where they are gaining profits. It is perceived that apart from the government, business organizations are also having responsibilities towards the society.

Initiation of the corporate social responsibilities is having multiple benefits for the organizations but there are few organizations that have faced difficulties in initiating corporate social responsibilities or they have not achieved the desired outcome from it. Unilever is one of those organizations, which regardless of being a huge brand worldwide has not being able to leverage on their corporate social responsibilities (www.forbes.com, 2018). The purpose of this report is to discuss about the reasons for failure of CSR activities by Unilever. Scope of the project includes the benchmarks in initiating CSR activities successfully by some other organizations. This report is done based on secondary data available in the online sources.

This report will discuss about the reasons for unsuccessful approach of corporate social responsibilities by Unilever. In addition, this report will also discuss about the reasons behind the success of corporate social responsibilities by some other organizations. It will also be recommended whether corporate social responsibilities should be implemented or not.

According to the article discussed in Forbes, there are various reasons being identified for the failure of the corporate social responsibilities of Unilever. One of the major reasons identified is the ineffective leadership in Unilever (Du, Swaen, Lindgreen & Sen, 2013). In the article it is stated that Paul Polman, CEO of Unilever is one of the key reasons for the disaster of Unilever in their corporate social responsibilities. He was working towards meeting his own political goal by using the resources of Unilever. According to him, initiation of more social responsibilities through the organization will help to gain positive impression in the market. It will help him to gain goodwill by considering more social objectives over economic objectives.

Success Stories of Some Other Organizations

Initiation of the corporate social responsibilities is having positive impact for the business organizations but over concentration of the social objectives over the economic considerations will hurt the financial stability of the organization. Unilever also faced the similar situation with the leadership of Paul Polman (Christensen, Mackay & Whetten, 2014). It caused negative impact on the organizational process of Unilever and issues such as sexual harassment and environmental controversies. These issues ultimately reduced the social image of Unilever.

Another reason that is being identified for the failure of the corporate social responsibilities of Unilever is the preference of social objectives over the economic objectives. This is due to the reason that activities in relation to the corporate social responsibilities will only get succeed when the organization is having favorable financial position. However, in the case of Unilever, they have concentrated more on the social responsibilities. This took a toll on their financial performance. Thus, negative financial performance of Unilever caused limitation in their corporate social responsibilities. In the article of Forbes, it is stated that the CEO of Unilever, Paul Polman, have concentrated more on fulfilling the sustainable development goals of the United nations over the poor financial result of Unilever in 2016. It is to be noted that corporate social responsibilities are the added business aspects that should be initiated by the business organizations (Wu, Kwan, Yim, Chiu & He, 2015). These activities cannot be core business objectives of any business organization. This should also be noted that favorable financial performance of the business organizations will only help in supporting the corporate social responsibilities. On the other hand, according to Zhu, Sun and Leung (2014), ineffective initiation of the CSR activities will further reduce the brand image of the organization. Thus, the economical objectives will get further dwindled.

Another reason for the failure of the corporate social responsibilities of Unilever identified is the emergence of different unethical issues in their worldwide business. For instance, in the article, it is stated that issues such as the sexual harassment in Africa, contamination from mercury in India and undue competition in South Africa caused damage in their social impression. However, initiation of the corporate social responsibilities should have positive image in the market. Thus, these issues caused negative brand image in the global market (Zhu, Sun & Leung, 2014). Hence, companies with having negative brand image will not be able to leverage from the initiation of the corporate social responsibilities much like Unilever.

Viability of Implementing Corporate Social Responsibilities

There are various business organizations who have effectively and successfully implemented their activities in relation to the corporate social responsibilities. However, there are some factors, which should be considered in effectively implementing the corporate social responsibilities. For instance, Microsoft is one of the major organizations who are known for their extensive policies to the corporate social responsibilities. Microsoft is successful for their effective policies of social responsibilities due to the approach of their leadership. This is due to the reason that Bill Gates, founder and former CEO of Microsoft is known for his social activities worldwide. On the other hand, current CEO of Microsoft, Satya Nadella is also known for his preference for social responsibilities. However, they have not overlooked their core business objectives; rather they have initiated the corporate social responsibilities in order to enhance their brand image in the market. This is one of the major reasons for successful implementation of the corporate social responsibilities by Google (Chin, Hambrick & Trevino, 2013).

Practicing ethical and unethical business policies also determines the effectiveness of corporate social responsibilities. This is due to the reason that if the organizations are not having positive brand image in the market, then it is difficult to gain positive outcome from the initiation of the corporate social responsibilities (Saeidi, Sofian, Saeidi, Saeidi & Saaeidi, 2015). Thus, organizations should be positive image in the market that will create the authenticity of their corporate social responsibilities. For instance, Lego is one of those organizations that is having positive and favorable image in the market. Thus, their corporate social responsibilities are more effective and create positive impact in the market. This is the reason behind the popularity of corporate social responsibilities of Lego.

The above discussion concludes that initiation of the corporate social responsibilities is having both positives and negatives for different business organizations. Thus, it is obvious for the business organizations to relook at their strategies of initiating corporate social responsibilities in terms of their viability (Filatotchev & Nakajima, 2014). However, it is recommended that business organizations should implement corporate social responsibilities in their business activities. This is due to the reason that in the current business scenario, competition is huge in every business sector. It is important of the business organizations to have distinctive business approaches in order to stay ahead and unique in the competition. In this case, one of the most effective strategies will be the corporate social responsibilities. Having activities in relation to the social responsibilities will help the business organizations to have positive brand value in the market and this will reflect in pushing their products and services to the customers.

Corporate social responsibilities are recommended for the business organizations due to the reason that it will enhance the ethical business practices in the management. This will reflect in their positive business management . It is also to be noted that positive  business management will help in enhancing the organizational productivity and financial performance (Rexhepi, Kurtishi & Bexheti, 2013). Thus, the economic objective of the business organizations can get enhanced with the initiation of the corporate social responsibilities.

Initiation of the corporate social responsibilities also helps the business organizations keeping the environmental factors considered. This is due to the reason that in the current business scenario, one of the major issues being faced by the business organizations is the climate change and environmental degradation. On the other hand, initiation of the corporate social responsibilities will help the organizations to initiate strategies in relation to the protection of the environment and natures. This will have multiple benefits for the business organizations by having both fulfillment of the social responsibilities and the protection of environment. Therefore, the business sustainability will get enhanced for the organizations along with having positive impression in the market.

Conclusion

Thus, it can be concluded that initiation of corporate social responsibilities will help the business organizations in having multiple benefits in their operation. However, on the other hand, ineffective management of the corporate social responsibilities may also pose challenges for the business organizations. This report discussed about the reasons of failed process of corporate social responsibilities in Unilever. In addition, instances from various other organizations are being used in this report in order to determine the reasons about how other companies are successfully implementing activities in relation to the corporate social responsibilities. This report concludes that regardless of negatives and positives of corporate social responsibilities, it is important for the contemporary business organizations to implement this strategy.

Arguments for CSR outweigh the arguments against due to the reason that CSR is not having direct negative impact on the organizations except due to ineffective implementation. On the other hand, initiation of CSR will help the organizations to have positive brand image along with favorable social environment for their business operations.

References

Cheng, B., Ioannou, I., & Serafeim, G. (2014). Corporate social responsibility and access to finance. Strategic Management Journal, 35(1), 1-23.

Chin, M. K., Hambrick, D. C., & Treviño, L. K. (2013). Political ideologies of CEOs: The influence of executives’ values on corporate social responsibility. Administrative Science Quarterly, 58(2), 197-232.

Christensen, L. J., Mackey, A., & Whetten, D. (2014). Taking responsibility for corporate social responsibility: The role of leaders in creating, implementing, sustaining, or avoiding socially responsible firm behaviors. The Academy of Management Perspectives, 28(2), 164-178.

Du, S., Swaen, V., Lindgreen, A., & Sen, S. (2013). The roles of leadership styles in corporate social responsibility. Journal of business ethics, 114(1), 155-169.

Filatotchev, I., & Nakajima, C. (2014). Corporate governance, responsible managerial behavior, and corporate social responsibility: Organizational efficiency versus organizational legitimacy?. The Academy of Management Perspectives, 28(3), 289-306.

Rexhepi, G., Kurtishi, S., & Bexheti, G. (2013). Corporate social responsibility (CSR) and innovation–the drivers of business growth?. Procedia-Social and Behavioral Sciences, 75, 532-541.

Saeidi, S. P., Sofian, S., Saeidi, P., Saeidi, S. P., & Saaeidi, S. A. (2015). How does corporate social responsibility contribute to firm financial performance? The mediating role of competitive advantage, reputation, and customer satisfaction. Journal of Business Research, 68(2), 341-350.

Wu, L. Z., Kwan, H. K., Yim, F. H. K., Chiu, R. K., & He, X. (2015). CEO ethical leadership and corporate social responsibility: A moderated mediation model. Journal of Business Ethics, 130(4), 819-831.

www.forbes.com. (2018). Forbes.com. Retrieved 7 April 2018, from https://www.forbes.com/sites/econostats/2017/03/15/unilever-and-the-failure-of-corporate-social-responsibility/#930a979498d2

Zhu, Y., Sun, L. Y., & Leung, A. S. (2014). Corporate social responsibility, firm reputation, and firm performance: The role of ethical leadership. Asia Pacific Journal of Management, 31(4), 925-947.