csr discussion on syrian refugee

IB93PB International Business Essay ID: 1557875

Masters Programmes

Assignment Cover Sheet Submitted by: 1557875

Date Sent: 09/01/2016

Module Title: International Business

Module Code: IB93PB

Date/Year of Module: 2015/16

Submission Deadline: 11/01/2016

Word Count: 3144

Number of Pages: 9

Question: What is meant by Corporate Social Responsibility? Europe is facing a major economic and social challenge as it struggles to cope with the hundreds of thousands of refugees winding their way from Syria and across the length of Europe. Should corporate business acknowledge any Corporate Social Responsibility in relation to this international crisis. Of course, corporate business has not caused this international crisis but arguably it is, like expanding foreign trade, a consequence of global change. If so, what if any CSR strategies might be relevant in this situation. “This is to certify that the work I am submitting is my own. All external references and sources are clearly acknowledged and identified within the contents. I am aware of the University of Warwick regulation concerning plagiarism and collusion.

No substantial part(s) of the work submitted here has also been submitted by me in other assessments for accredited courses of study, and I acknowledge that if this has been done an appropriate reduction in the mark I might otherwise have received will be made.”


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INTRODUCTION

From 2011 to the end of 2015, at least half the population of Syrian people have lost their lives or home due to the civil war in their home country. Those people who kept their lives are struggling to survive in Syria, or try to make their new home in neighbouring countries like Turkey, Lebanon, Iraq and Jordon. Some of them even take the risks of their lives to make their way to Europe seeking for asylum. It is deemed as one of the the most tragic crisis in this century. While the refugees were moving west into Europe, it has also impacted the European Union in terms of both economics and social stability. German government has first opened arms to embrace them, and followed by other EU countries. But apparently, EU and the member countries are struggling to cope with the enormous number of refugees either because of limited resources or restrained policies. It is inevitable that these people are also looking forward to the aids from other organizations besides the public sectors such as non-governmental organizations (NGO) like Red Cross and enterprises for profit as well.

Of course corporate business has not caused this international crisis. But it is necessary to recognise that actually in today’s business environment, economic and social influences of globalism are changing political and legal frameworks worldwide, linking companies, civil society, and governments together. In other words, they are all in an interconnected network with no exception. As a result, private sectors are more or less linked to this refugee crisis caused by the civil war in Syrian indirectly but intimately, as conceivably it is a consequence of global change with political concerns and oil profit involved.

Therefore, this essay will be focused on how corporate business can be relevant to this international crisis in any aspect. By going through the definition of Corporate Social Responsibility, I will first extract out a core value of CSR to be the backbone of this essay. Then analyse two types of CSR strategy, embedded and peripheral, with real cases conducted by firms. As it is still arguable that whether dedicating in CSR initiatives will benefit companies and also their investors. The possible future impact of corporate’s operation and the value corresponding to CSR strategies would be the key part of the analysis. By dividing different strategies into two types, peripheral and embedded, and adopting the pyramid structure of CSR. I will try to make a clear point to this argument. Furthermore, summarise if these approaches can be justified with defined core value, and how the strategies could be helpful for the homeless people while retrieving social stability and achieving economical benefit at the same time. Last but not the least, conclude whether corporate business should devote to CSR initiatives.


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CORPORATE SOCIAL RESPONSBILITY

Business and Society need each other – Michael Porter

In the past few decades, the very first and main purpose of business is earning money in order to meet the minimum expectation of investors. So clearly all the operations and activities of companies should stick to it and utilise the resources properly to generate revenue or create value for shareholders (or stockholders). Just like the winner of Nobel Prize in Economics, Milton Friedman, published his ‘Stockholder Model’ in 1962. Stated the idea that “there is one and only one social responsibility of business — to use its resources and engage in activities designed to increase its profits so long as it stays within the rules of the game.” But, when the time goes by, the business world nowadays is getting more complicated than ever with ecological and social factors engaged in many aspects, such as ecological disasters in energy extraction or conflicts between ethnics and religions in global expansion. Environmental sustainability and social stability have become more influential and gained their important positions in a successful profile of a corporation rather than just brilliant operations of its own in the past. The interests once only focus on stockholders has now gradually move onto stakeholders, a group consist of not only company owners, but also local communities, suppliers, employees, and customers (Freeman, 2010).

This innovative idea was then more concisely defined as “context-specific organizational actions and policies that take into account stakeholders’ expectations and the triple bottom line of economic, social, and environmental performance” by Aguinis (2011). While the ‘Triple Bottom Line’ is a concept first raised by Elkington (1997) to measure a firm’s performance in three dimensions: economic, social, and ecological value. Besides the traditional measure of corporate profit, it also comprises two aspects as how companies being socially responsible to people and environmentally responsible to this planet. According to this definition, CSR can be concluded as a thought for people who run companies taking the greater good into consideration, focusing on creating both shareholders value and social benefit rather than just on what goes into investors’ pocket.

But essentially the original purpose of business activities has remained the same — money earning. Although taking consideration of many different aspects is making implementing CSR based strategies relatively more complicated, profit is still the first priority regarding corporate operations as it is the foundation of it (Carroll, 1991). This proves that Milton Friedman’s ‘Stockholder Model’ is not obsolete at all after all these years. Instead, his original concept has been broadly adopted in modern theories. From the perspective of ‘value pursuing’, we can see actually there is no much difference between CSR concept and ‘Stockholder Model’. CSR could be deemed as an evolved idea from ‘Stockholder Model’, to adapt to more advanced and sophisticated business environment under globalisation. The core value has also been shifted from internal value for corporate business to shared value for both firms and society. Just like the description from Porter and Kramer (2011), “Creating economic value in a way that also creates value for society by addressing its needs and challenges.”


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REFUGEE CRISIS

Syrian civil war, one of the most grieving tragedies in humanity history, began with an anti-government demonstration because of the teenagers who painted revolutionary slogans on a school wall were arrested and tortured. The casualty caused by Syrian government’s violent suppress had infuriated the crowd and therefore made the situation worse. Numbers of protesters started to arm themselves to against its government. In addition, the religious clash between Sunni and Shia, political tension between America and Russia, rebels, and rise of jihadists in extremist group like ISIS, all these factors getting involved later on had made the conflict grow bigger and bigger like a snowball. And eventually became a comprehensive civil war with no signs of end.

Although the refugee crisis caused by the civil war started in 2011, almost 5 years ago, and the refugees have been fleeing from the war and seeking for a safe place to continue their lives since then. It has not become a worldwide media sensation only until the heart-breaking photo of the drowned Syrian boy found on Turkish beach was posted on September 2, 2015 (Smith, 2015). As the refugee issue broke out and spread like a wild fire, the European Union has been under the pressure to take approaches. The large amount of arrivals since August has put member states of the EU into public and institutional difficulties. Among all the countries, German government has shown the warmest welcome to these fleeing people from Syria. Germany has announced it is expecting 800,000 immigrants come into the country only in 2015 and looking forward to accepting 500,000 immigrants each year. Meanwhile, under the pressure of population boom, United Kingdom would only be able to accept up to 20,000 in five-year time, which equals to around 4000 people fleeing the war and disaster annually until 2020 (Batchelor, 2015).

PERIPHERAL CSR STRATEGIES

Apart from what intergovernmental organization (IGO) and the states have done, many of private sectors have also given their helping hands with different amount of donations to assist these homeless people. The list includes well known companies like Google, JPMorgan, UNIQLO, Bayern Munich Soccer Club, SAP, and FedEx (U.S. Chamber of Commerce Foundation, 2015). There are two points of view to support these financial aids belong to a part of CSR approaches rather than just an affordable charity. First, the donations are named, which means companies can also receive positive feedback as growing their reputation. More importantly, while most of the donations are in the form of cash, it is also delivering a message to investors that company is financially healthy and have flexibility on its cash flow. Namely speaking, it could be an indicator of a firm’s financial status. As the perception of general public, in most of the cases, only the business with excess cash can undertake such initiatives.

In addition to the financial donation to the United Nations High Commissioner for Refugees (UNHCR), SAP, the biggest software company in Europe based in Germany, launched a design-thinking workshop. The purpose of this workshop was to come up with feasible ideas about what the firm can do to help by interviewing refugees and social workers to clarify their needs, including accommodation, job, language, school, family, and culture. The outcome was productive with various topics, like utilising company’s


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properties and employees to contribute to culture sharing or basic language courses. But most important of all, the team found out the most crucial need from refugees is an opportunity to find a job. Therefore, they also made suggestions as providing job searching information and CV writing sessions to help them find a job more efficiently. (Reich, 2015). Another substantial assistance is from the world leading consulting firm, Mckinsey & Company. The firm has planned to offer its professional service to support Germany’s BAMF (Federal Office for migrants and refugees) addressing the overwhelming number of asylum application. Meanwhile, target to shorten the all process from seven months to only two months by introducing new streamlining IT system in order to improve information sharing and conducting few adjustments to internal procedures (Consultancy UK, 2015).

In these two cases, corporate business contributed their services to refugee issue by brainstorming workshop from software solution company and the consulting programmes from consulting firm. The common in these two CSR initiatives, is that they are both what the company is good at or feel comfortable with. And this is completely logical that corporations usually implement CSR in the way they are familiar with (Smith, 2014), as it is a most cost effective way with minimum impact on their internal operations. But what is the main reason behind this kind of consideration?

At here, I would attribute this concern to that the category of both strategies are under the peripheral type of CSR. By the definition from Aguinis and Glavas (2013), “embedded CSR involves an organization’s core competencies and integrates CSR within a firm’s strategy, routines and operations, and therefore affects all employees. In contrast, peripheral CSR focuses on the external activities that are not integrated within a firm’s strategy, routines and operations.” Both of two substantial assistances and the financial aids mentioned above should all be classified as peripheral strategies. Although they are value-added to corporations such as obtaining great reputation on their contribution or building up cohesion and belongingness to its employees during the process of brainstorming like the workshop held by SAP. Nevertheless, these CSR strategies are mostly external to the organisations which would not affect neither their operations nor employees essentially. To be more specific, the strategies being considered here, are more like affiliations rather than the main structure of what business emphasise the most. As a result, under the premise of maintaining company’s stability which is crucially important. The cost concern, both tangible and intangible, would be the first priority to managers and executives before conducting any CSR approaches.


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EMBEDDED CSR STRATEGIES

So how could corporate business take the responsibility more “involved” regarding refugee issue, as a part of their core operations within organisation which can create shared value for both society and company itself?

Matthias Mueller, the chief executive of Porsche answered this question simply but clearly, “With new jobs!” (Klein & Matten, 2015). The same idea has been raised in SAP’s workshop, but however has only stayed as external assistance. The thought of creating new jobs also indicates a sign that in Germany, industry is eager to integrate refugees into the work force. The truth is, among the influx of tens of thousands of Syrian refugees, many of them are skilled and well-trained workers from middle class families, or even university-educated specialists in certain fields such as manufacturing and engineering. By fitting these people into suitable places, they could be transformed to potential work force. Comparing with any forms of donation, it could contribute to companies more directly and fundamentally in terms of both economic and social performances which corresponded to the 'Triple Bottom Line’ of business.

While a research has shown that Germany could only maintain its economic strength and competitiveness with around 400,000 skilled immigrants added to the working labour annually (Advincula, 2015), mainly due to the aging population. As the country is in a shortage of qualified technicians like engineers and IT specialists, as well as health specialists (Make it in Germany, 2015). It is expected to see a boost of productivity in manufacturing and constantly economy growth once the integration is successfully implemented. In other words, this could be a shot in the arm to the dwindling labour force and stagnant economy for most of the developed and advanced countries like Germany. Most importantly, the integrated immigrants go into labour and pay taxes, which contribute to the country’s social system. As a result, the authorities would not only be benefit from gaining tax income, but also be relieved from the burden of resettlement. Instead of pouring considerably large amount of resource for the overwhelming number of refugees, government could emphasize more on the services like language courses and employment programmes to help them blend in to the society smoothly. Achieving sustainable social development and retrieving the balance of expenditures and public sectors’ service.

It has been mentioned before that the foundation of any CSR strategies is still based on profit. This is an original idea from ‘The Pyramid of Corporate Social Responsibility’ (Carroll, 1991). By breaking down to four levels (Figure 1), the analysis will help managers and investors to clarify whether the strategies are advisable and logical.


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Figure 1 (Carroll, 1991)

Economic responsibility lays at the bottom, as being profitable is fundamentally important to corporates business. To the enterprises eager for the work force, they could be benefit from productivity growth as long as the cost of labour integration can stay under control. The following level is legal responsibility, the force to protect the rights of employees and restrain any business activities from being illegal. Meaning that companies will have to abide by the rules and immigration policy of the countries located in. Take Germany for example, the welcoming attitude shown by the authorities would be a positive force promoting the willingness of integration. Ethical responsibility on the third level is about being right, just and fair in generally social cognition. In other words, company’s strategies should be perceived to bring positive effect to the society. While most of the corporations are motivated by the shortage of local labour force, integrating skilled immigrants would do no harm to the right of local citizen theoretically. At the top of the pyramid, philanthropic responsibility is the most implicit and profound as it refers to psychology and sociology. Which can be matched with self-actualization, the top level of Maslow’s ‘Hierarchy of Needs’ (1943). They are both a reaction to internal reflection from outside world. I will only state its result as being perceived charitable and kind in that any further discussion would be deviated from this topic.

To conclude, the idea of transforming refugees to the work force is very challenging. As the integration would be involved in corporation’s main structure. In order to fulfil it, many factors, including considerable large amount of resource, should be considered thoroughly. This also explains why there are no any related programmes has been officially implemented so far. Although the risk is relatively high and the benefit of it might not be received as fast as peripheral type of strategies. But taking a perspective of organisation’s long-term sustainability, creating more jobs and opportunities for the fleeing people from Syrian is a brilliant approach of embedded CSR. Under the premise of collaboration with government policy and containing operation cost under control, integrated labour force could generate dramatically great value to the country’s economy, society, and of course, to the profit of corporate business.


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CONCLUSION

In this essay, we have seen financial donations, professional services, and an idea to integrate refugees into working force, various types of CSR initiatives and what are the possible impacts accordingly. Of course there will always be other ways with regard to contributing to the crisis. For instance, company could launch supporting programme for employees whose families are in Syria or in transit to safer destinations by offering sponsors or releasing jobs to their relatives (Klein & Matten, 2015). Also, apart from the difficulties of refugees trying to move into Europe, severe food shortage is happening to the people who stay in Syria. In this case, food industry may come up with another kind of aids, directly providing goods to the needs.

Undoubtedly, this international crisis has brought great impact to the society. And it can be concluded that an appropriate CSR strategy could be a decisive force, not only to the issues related to refugee, but also to private sectors. By devoting to address the needs of people, institutions, and governments, it is expected that most of the enterprises are looking forward to acquiring some positive returns. Such as reputational growth or substantial profits in terms of economic value, even it might take couple of years to harvest as it is relatively long-term effect. On the other hand, as a proverb goes, ‘A crisis is a chance’. Crisis can also convert to an opportunity to change. Even though it is the case that a company eventually decides not to perform any approaches to offer its help, the process of going over different types of CSR strategy would still benefit the organisation. Either through the inspection of its financial status or any operational adjustments, the flaws in system will now have a chance to be found and then rectified. Consequently, improve the performance of the corporation. From this point of view, business runners, no matter in which industry, should all take CSR initiative into their consideration as a formal and influential strategy.

Like German Chancellor Angela Merkel said to all German citizens in her new year message, “the influx of more than a million refugees should be welcomed as an 'opportunity'”. At this struggling age, the most grieving tragedy could also become the most promising opportunity.


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REFERENCES

l Advincula, A. 2015, Labor Shortage: Germany Needs More Immigrants, New America Media, 4 January 2015. Available at: http://www.alternet.org/world/labor-shortage-germany-needs-more-immigrants

l Aguinis, H. 2011, Organizational Responsibility: Doing Good and Doing Well, In S. Zedeck (Ed.), APA Handbook of Industrial and Organizational Psychology, American Psychological Association, Washington, DC, Vol. 3, pp. 855–879.

l Aguinis, H. & Glavas, A. 2012, What We Know and Don’t Know About Corporate Social Responsibility: A Review and Research Agenda, Journal of Management, 38, pp. 932-968.

l Aguinis, H. & Glavas, A. 2013, Embedded Versus Peripheral Corporate Social Responsibility: Psychological Foundations, Industrial and Organizational Psychology, American Psychological Association, Washington, DC, Vol. 6, pp. 314-332.

l Batchelor, T. 2015, Revealed: Why Germany Desperately Needs to Accept More Refugees than the UK, Daily Express, 10 September 2015. Available at: http://www.express.co.uk/news/uk/603870/Migrant-crisis-graphs-Germany-needs-more-migrants-than-Britain

l Bershidsky, L. 2015, Why Germany Welcomes Refugees, BloombergView, 9 September 2015. Available at: http://www.bloombergview.com/articles/2015-09-09/why-germany-welcomes-refugees

l Carroll, A. 1991. The Pyramid of Corporate Social Responsibility: Toward the Moral Management of Organizational Stakeholders, Business Horizons, 34(4), pp. 39-48.

l Consultancy UK, 2015, McKinsey Helps Germany Deal with the Refugee Crisis, Consultancy UK, 7 October 2015. Available at: http://www.consultancy.uk/news/2729/mckinsey-helps-germany-deal-with-the-refugee-crisis

l Elkington, J. 1997, Cannibals with Forks: The Triple Bottom Line of 21st Century Business, Capstone, Oxford.

l Fleming, M. 2015, Six Reasons Why Syrians are Fleeing to Europe in Increasing Numbers, The Guardian, 25 October 2015. Available at: http://www.theguardian.com/global-development-professionals-network/2015/oct/25/six-reasons-why-syrians-are-fleeing-to-europe-in-increasing-numbers

l Freeman, R. E. 2010,Strategic Management: A Stakeholder Approach, Cambridge University Press, Cambridge, 9 March 2010.


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l Friedman, M. 1962, Capitalism and Freedom, University of Chicago Press, Chicago, p. 133.

l Klein, P. & Matten, D. 2015, Business Has Complex Social Responsibility in Humanitarian Crisis, The Globe and Mail, 14 September 2015. Available at: http://www.theglobeandmail.com/report-on-business/rob-commentary/business-has-complex-social-responsibility-in-humanitarian-crisis/article26348167/

l Lys, T. et al. 2014, Pinpointing the Value in CSR, Kellogg Insight, 4 March 2013. Available at: http://insight.kellogg.northwestern.edu/article/pinpointing_the_value_in_csr%20

l Make it in Germany 2015, Which Occupations are in Demand, Make it in Germany. Available at: http://www.make-it-in-germany.com/en/for-qualified-professionals/working/demanded-professions

l Maslow, A. 1943, A Theory of Human Motivation, Psychological Review, 50, pp. 370-396.

l Peev, G. 2016, Don't be Cold-hearted to Our 1.1million Refugees: Merkel Begs Germans after Her Popularity Drops over Open Door Policy, Daily Mail Online, 1 January 2016. Available at: http://www.dailymail.co.uk/news/article-3380747/Don-t-cold-hearted-1-1million-refugees-Merkel-begs-Germans-popularity-drops-open-door-policy.html

l Reich, F. 2015, Refugees Aid Workshop at the SAP AppHaus Heidelberg: How Can SAP Contribute to Refugee Integration? SAP, Walldorf, 30 October 2015. Available at: https://experience.sap.com/news/refugees-aid-workshop-at-the-sap-apphaus-heidelberg-how-can-sap-contribute-to-refugee-integration/

l Rodgers, L. et al. 2015, Syria: The story of the conflict, BBC News, 9 October 2015. Available at: http://www.bbc.co.uk/news/world-middle-east-26116868

l Smith, A. 2014, Fortune 500 Companies Spend More Than $15bn on Corporate Responsibility, Financial Times, 12 October 2014. Available at: http://www.ft.com/cms/s/0/95239a6e-4fe0-11e4-a0a4-00144feab7de.html#axzz3t4ANrfo5

l Smith, H. 2015, Shocking Images of Drowned Syrian Boy Show Tragic Plight of Refugees, The Guardian, 2 September 2015. Available at: http://www.theguardian.com/world/2015/sep/02/shocking-image-of-drowned-syrian-boy-shows-tragic-plight-of-refugees

l U.S. Chamber of Commerce Foundation, 2015, Refugee Crisis – Corporate Aid Tracker, U.S. Chamber of Commerce Foundation, 26 October 2015. Available at: https://www.uschamberfoundation.org/corporate-citizenship-center/refugee-crisis-corporate-aid-tracker

csr discussion on syrian refugee

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