Communication in Business : Self-Regulatory Mechanism

Question:

Describe about the Communication in Business for Self-Regulatory Mechanism.

Answer:

Introduction

Corporate Social Responsibility or CSR is the self-regulatory mechanism of the business organisations that monitors and regulates the active participations of the company to maintain the laws, ethical standards and national or international norms (Navi, 2012). Additionally, it can be said that the CSR policies are applied within an organisation to provide well-being to others than increasing economic profitability by following the required rules and regulations. The business units have been practicing this corporate social responsibility in their business as an integral part of company operations. However, it has reported in media that being identified as the essential corporate operation, many firms are not applying CSR or struggling to implement in their organisation (Carroll, 2015). BHP Billiton is one of the organisations, which were struggling for implementing CSR properly within the organisation. Therefore, this report is analysing the CSR policies of the company to identify their flaws. Thus, BHP will be able to apply this practically.

Concept of CSR

In the world of business, the main concern centres round the financial profitability and the foremost responsibility is to maintain a good relationship with the stakeholders to achieve success. According to Clapp and Rowlands, (2014), it was the earlier belief of the entrepreneurs that has changed after the emergence of the concept of CSR or Corporate Social Responsibility. This new concept has changed the priority of the organizations since the 1950s and 1960s.  The business organisations are applying these CSR policies to improve their reputation in the market and to gain the attraction of the stakeholders to increase their profitability indirectly. It is told that building a reputation is a very long process while it does not take time to lose that earned reputation. Therefore, business organisations should not take the responsibilities to the stakeholders, along with this they have to be responsible to the society, environment to gain sustainability.

Corporate Social Responsibility is the process that analyses the responsibilities of the organisations to the society and the environment. According to Okpara and Idowu, (2013), CSR refers to the organisational practice that impacts on the decision-making and activities on all aspects of the society. The CSR is not only donating some money or printing double page to save trees, it refers to the broader aspect of the society as well as business. CSR refers to contribute in the moral causes of society such as, helping to maintain the health and welfare society, running the business ethically and operating transparently (Mirvis, 2012). Additionally, it refers to the responsibility of legal processes. Generally, companies operate their CSR responsibilities through some practices. They use their waste and pollution reduction systems to express their responsibility towards the environment. Likewise, many organisations contribute to the educational purpose and social programs, and some companies try to satisfy their human resources with implementing various return strategies. Therefore, the companies should apply this CSR properly to help the society. However, it has seen that there are many companies, which are not able to perform these corporate social responsibilities due to lack of practical knowledge or for wrong application. Thus, the companies should include CSR program in their business to gain the trust of customers as well as the stakeholders (Hilson, 2012). On the other hand, if the companies can implement the CSR properly then they will be benefitted in many ways, these are –

The company, which practices CSR policies properly, can make their employees satisfied with a feeling of pride. Employees feel a positive energy during their work in the organisation thinking that they are working for the company that thinks about the society and environment along with their business profit.

This approach can satisfy the customers with providing the view that they are not busy with their profits only rather the organisations are thinking about the social and environmental causes (Mayes, 2015). The companies will be benefitted by the policies in attracting the customers to their company and if once a customer starts liking a company, then their profitability will be increased automatically.

CSR improves the public relation of any organisation as it promotes their business activities in the media and online platform that save the money of the advertising campaigns. Along with this, CSR does not need to invest money rather it helps in cost reduction of any organisation. The cost reduction helps to retain the staff, can manage risks and liabilities more effectively and they have to invest very less in the traditional advertising (Mayes, Pini, & McDonald, 2013). It also provides the company with many new opportunities for increasing their business.

There are different types of CSR policies observed that various companies used to apply in their business units, such as, Environmental CSR, HR based CSR; Community based CSR, and Philanthropy (Jamali et al., 2015).

BHP’s CSR Commitments  

BHP Billiton is one of the most important and known Anglo-Australian Multinational mining and petroleum company. It deals with the mining, metals and petroleum elements located in the Melbourne, Australia. It is known as the world’s largest mining organisation from 2015 and the fourth largest company by revenue in Australia (Bair & Palpacuer, 2015). It is a UK based company, which has emerged as the BHP Billiton in 2001 with the merger of the Australian Broken Hill Proprietary Company Limited (BHP) and the Anglo–Dutch Billiton plc. The company is mainly deals with the variety of mining items, oil and gas production, processing and including more than 41,000 employees as their direct working partners. According to Mayes, Pini and McDonald, (2013), the company has four primary operational units, such as – coal, copper, petroleum and iron ore. One more item has added in their operational chain was potash as their fifth important operational unit.

The company is completely related to the petroleum and mining products that can cause harm to the environment as well as to the society. Therefore, they have to maintain a CSR policy to give the concern towards the society and the environment that their customers do not think about them wrongly. BHP Billiton voluntarily donates one per cent of pre-tax profit, calculated on the average of the previous three years’ pre-tax profit, in community programs and has earned almost US $241.7 million community donations. BHP has also contributed to the BHP Billiton corporate charitable entities almost an amount of US $100 million (Haufler, 2016).

The company has been working for the society and environment since its starting time. As the company is dealing with the petroleum and mining products therefore, the carbon emission or rather it can be said that the emission of Green House Gases (GHG) has hampered the balance of the environment. Therefore, they should have to think about the GHG emissions to improve their business procedure along with maintaining their own business.

Across our global operations, we are committed to working in ways that are true to Our BHP Billiton Charter values of Sustainability, Integrity, Respect, Performance, Simplicity and Accountability. When we do, we continue to build on our success today and for tomorrow. We are among the world’s largest producers of major commodities, including iron ore, metallurgical coal, copper and uranium, and have substantial interests in conventional and unconventional oil and gas and energy coal (Bice, 2014). Our unrivalled portfolio of high quality growth opportunities will ensure we continue to meet the changing needs of our customers and the resources demand of emerging economies at every stage of their growth. The diversification of the BHP Billiton portfolio continues to be our defining attribute. The quality of our people, our asset base and our unchanged strategy of owning and operating large, long-life, low-cost, expandable, upstream assets diversified by commodity, geography and market, together with our ability and commitment to investing through the cycle and delivering projects on budget and to schedule, is what sets us apart from our peers. 

Identifying the Inconsistencies between Communicated Intention and Corporate Practice

BHP Billiton has been working on the mining and petroleum industry since their emergence in the business and therefore, they have been using the natural resources and energy resources. These have been affecting the environment as well as the society in various ways. These are creating issues to get the support from the customers and from the stakeholders (Mayes, McDonald & Pini, 2014). It has become the barrier to improve their business as well. The main vision of the company was to satisfy the customers as well as their stakeholders. However, in this aim they have to face some issues regarding their wrong application of CSR policies. They have to face some issues regarding their communicated intention and corporate practice. Their vision was to provide the opportunity to their stakeholders to get the superior return on their investment. Additionally, their aim was to satisfy their customers and suppliers with a good relationship and the communities in which they operate would be valued properly (Steyn & Niemann, 2014). They have a dream of giving every employee a life that they can live with full satisfaction that they are involved in an organisation with moralities. However, in reality, it has not achieved by the company and they could not have achieved their vision in practical life. They have a policy named Zero Harm Policy, which were meant to secure the lives of the employees as well as the people (Hilson, 2012). However, in an incident seventeen workers has lost their lives and the impact of their families has extremely bad. Therefore, the company were facing these issues between Communicated Intention and Corporate Practice. There are a few issues regarding the emission of Green House Gases, which was directly polluting the environment and the massive consumption of energies has ruined their CSR policies for some extent (Price, 2015).

Recommendations to improve BHP’s CSR policy

The company has been using various ways to create a good Corporate Social Relationship and has been trying to improve their regular activities to help the society as well as the environment; still BHP Billiton has not become fully successful in this context. The situation has changed obviously comparing with the previous years but the main issue regarding the Green House Gas emission is continuing (Dashwood, 2014). Therefore, the company should follow some new activities and have to plan their regular business activities according to the thought. The thought can be developed by a proper environmentalist to help them in telling the procedures that would help them to reduce the Green house gas emission directly. Although the company demands that, the products they sell in the market rather than their direct involvement mainly because the emission of green house gases in the environment. Therefore, BHP Billiton should have to follow these activities to control the situation they are raising in present time these are –

  • Reduce the rate of Green House Gas Emission

The company should have to adapt new policies and business strategies to reduce the green house gases emissions in the environment. The greenhouse gasses are responsible for the increasing warmness in the world that is leading our planet towards the disaster. The climate has been changed already by its effect and the regular emission is creating a long-term effect in the climate (Pepper et al., 2015). Therefore, the climate has been changing with the global warming that is really a topic of concern for present day people. Therefore, the company should have to think about this and have to take initiatives to reduce the emission of Green house gases as soon as possible. It will save the planet as well as the people from various effects of the global warming.

  • To deal with the climate change issue

The company has been working on the global challenge of giving the electricity to everyone in any location. This challenge should have to be completed by the company now. They have to ensure the well-being of the people of every country that they can get the minimum energy to use in their regular life and live a hassle free life. However, the increasing rate of changing the climate has emerged the concern of the organisations working for the environment, and they have analysed that the rate of using the minerals and petroleum by BHP Billiton has decreasing the energy source of the earth. Therefore, the company should have to be concerned with their energy using and have to control their policies that the actions of their business cannot harm the climate. This will be the foremost step of the company to reduce the energy consumption that the world can use the energy resources for their uses.

  • Try to attain sustainability

The company should have to concentrate on attaining the suitability in business. The company with applying appropriate corporate social responsibility activities can gain this sustainability. If the company cannot think about the environment and the society then the people will also stop thinking about them. Thus realisation has made them enable to implement some new strategies for improving the social and environmental condition. Therefore, proper implementation of CSR policies to enhance the trust of the customers as well as the stakeholder can increase their sustainability. They should have revised their CSR policies as soon as possible for this. The Full HSEC Report on the company’s activities have been prepared in accordance with the Global Reporting Initiative 2002 Sustainability Reporting Guidelines and represents a balanced and reasonable presentation of our organisation’s economic, environmental and social performance. According to this report, BHP Billiton possesses a long-term plan or business strategy to meet the challenges in their path to attain the sustainable development.

Conclusion

The purpose of the study is to conduct the discussion on the corporate social responsibility, which is an important part of the business in present time. The study has recognised the CSR as the important key to run an organisation to gain the trust of the customers. Customers are the asset of the company and if a company can able to gain the trust of the customers then they will be beneficial from every side. The customers’ trust is a vital element for the organisations which operates for the customers. In this report, the first part is explaining the concept of Corporate Social Responsibility and its advantages in the organisations. However, it has been analysed that not every organisations are able to apply this in their business with appropriate implementation. BHP Billiton is one of the organisations like this.

The report has discussed the CSR policies of this company and has analysed whether those policies are effectual or not in recent time. Therefore, some recommendations are done on the basis of the understanding about their issues of the implementation of the policies. The recommendation has been done to improve the CSR policies regarding the emission of Green House Gases in the environment and to reduce the energy consumption to give the opportunities to use the energy in other purposes. Additionally, it has recommended gaining the sustainable development through the contribution to the society and environment as well as to their internal business.

Reference List

Bair, J., & Palpacuer, F. (2015). CSR beyond the corporation: contested governance in global value chains. Global Networks, 15(s1), S1-S19.

Bice, S. (2014). What gives you a social licence? An exploration of the social licence to operate in the Australian mining industry. Resources, 3(1), 62-80.

Browne, J., & Nuttall, R. (2013). Beyond corporate social responsibility: Integrated external engagement. The McKinsey Quarterly, 1-11.

Carroll, A. B. (2015). Corporate social responsibility. Organizational Dynamics, 44, 87-96.

Clapp, J., & Rowlands, I. H. (2014). Corporate social responsibility. Essential Concepts of Global Environmental Governance, 42.

Dashwood, H. S. (2014). Sustainable Development and Industry Self-Regulation Developments in the Global Mining Sector. Business & Society,53(4), 551-582.

Haufler, V. (2016). Corporations, Governance Networks, and Conflict in the Developing World. The New Power Politics: Networks and Transnational Security Governance, 224.

Hilson, G. (2012). Corporate Social Responsibility in the extractive industries: Experiences from developing countries. Resources Policy, 37(2), 131-137.

Jamali, D., Karam, C., & Blowfield, M. (Eds.). (2015). Development-Oriented Corporate Social Responsibility: Volume 1: Multinational Corporations and the Global Context (Vol. 1). Greenleaf Publishing.

Mayes, R. (2015). A social licence to operate: corporate social responsibility, local communities and the constitution of global production networks. Global Networks, 15(s1), S109-S128.

Mayes, R., McDonald, P., & Pini, B. (2014). ‘Our’community: corporate social responsibility, neoliberalisation, and mining industry community engagement in rural Australia. Environment and Planning A, 46(2), 398-413.

Mayes, R., Pini, B., & McDonald, P. (2013). Corporate social responsibility and the parameters of dialogue with vulnerable others. Organization, 20(6), 840-859.

Mirvis, P. H. (2012). Corporate Social Responsibility. The Encyclopedia of Human Resource Management: Short Entries, 153-159.

Navi, S. T. (2012). Corporate social responsibility.

Okpara, J. O., & Idowu, S. O. (2013). Corporate Social Responsibility. Springer Berlin Heidelberg.

Pepper, A., McIntosh, P., Fitzsimmons, R., Gebhardt, T., & Dillenbeck, E. (2015, September). The Unconventional Global Endowment: Results of BHP Billiton’s Global Assessment. In International Conference & Exhibition.

Price, G. (2015). Spotlight on seeds for BHP Billiton Iron Ore. AusIMM Bulletin, (Jun 2015), 76.

Steyn, B., & Niemann, L. (2014). Strategic role of public relations in enterprise strategy, governance and sustainability—A normative framework.Public Relations Review, 40(2), 171-183.

 

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