CORPORATE SOCIAL RESPONSIBILITY

Corporate social responsibility (CSR) has been one of the pressing issues faced by multinational corporates recently. Generally, CSR is corporate’s responsibility towards every individual that they come across to when doing business including customers, suppliers, manufacturers, employees and so on. It is in a broader scope and tend to be made at a higher level as it affects more people and reflect a general attitude taken by company or a number of decision makers. Over the years, there have been a dilemma between maximizing corporate’s profit and corporate’s responsibility in solving social needs because there is no benchmark to define to which level the corporate should take care of the society’s needs and goals. One of the famous CSR issue in the apparel industry is the Nike case. As we all know, textile and apparel industry is a labor-intensive sector and it is like a “suitcase” industry because it moves from a country to another for lower labor cost. In the situation of H&M ready to get into Ethiopia for production, CSR program that fits well would be fair trade with textile suppliers and workers welfare program.

Some time ago, there was a CSR issue happened in Ethiopia where the famous American coffee chain – Starbucks had some disputes with their coffee suppliers. It was being reported that Starbucks has depriving the local coffee farmers in Ethiopia of $90 million a year by opposing the Ethiopian government’s efforts to trademark three types of their local coffee beans. If H&M is confirming to have their production in Ethiopia, responsibility towards the textile suppliers will be on the top list because H&M would definitely do not want to repeat what mistake that Starbucks had made. Other than fair trade with textile suppliers, H&M should also take careful notice on sweatshop issues that might happen in future just like what had happened in Argentina, Myanmar, Bangladesh and so on. In terms of the workers welfare, H&M should provide a production factory that has safe working condition and without excessive working hours for the employees. Ethnocentrism approach from the ethical paradigm should be utilized by H&M in order to be ethically responsible. In other words, H&M should apply the same moral and ethics similar to their home nation when the company is producing apparels in Ethiopia.

There are three steps that would be involved while developing CSR program in Ethiopia by H&M, which include, “conceive and initiate”, “commit and implement”, and “communicate and inspire”.Step 1:Conceive and Initiate

A corporate social responsibility program is never one-size-fits-all. While crafting a program, it is important to keep the Three Pillars of Sustainability in the forefront: People, Planet and Profit. Create opportunities and multiple ways for employees and other stakeholders to engage with the program. Incorporate opportunities across a wide spectrum of engagement that include volunteer days, traditional giving, recycling events, peer to peer fundraising, and disaster assistance. Consider taking the CSR program a step further and incorporate cause marketing into the program. Integrate the company’s products within the program, and take this as an opportunity to initiate commitments to supply chains and production processes. Consider where and how it makes sense for your company to make a socially responsible and environmentally impactful investments and how to involve your company’s employees and leadership in that investment.

Step 2:Commit and ImplementOnce the concept and details of the CSR program have been determined, it’s up to the company to prove its value in terms of triple bottom line results for the company. This requires assessing and measuring the program’s impact. Develop a link between social responsibility program and company’s business results. How does the cause driven program impact the company’s sales, customer satisfaction, employee and brand loyalty, and market access? Prove that the program positively impacts the company reputation and the overall profitability. Track, measure, and communicate the impact that the program is making on the social, environmental, and economic factors.

Step 3:Communicate and InspireFor any corporate program to succeed, the program needs endorsement and acceptance from the top management. A corporate social responsibility program is no different. Communicating the impact and successes of the program to the top levels of the organization is critical. Communicate frequently about the program’s progress and accomplishments, and also be sure to convey the program’s impact to the company’s triple bottom line. Convince leadership to inspire employees and other stakeholders to make “cause” a priority, and encourage employees to participate and get each other involved. Track and share program outcomes and impact with employees, customers, community members, and program beneficiaries to build program recognition, loyalty, and momentum. The success of the program is all about inspiration and participation.