Lecture 4: 06 January, 2009

The lecture started with a re-cap of what we learnt yesterday.

Continuing the life-cycle environmental impacts of products, we identified (a)energy consumption, (b) water consumption, (c) use of hazardous substances, (d) waste generation, (e) emissions, (f) discharges, (g) mass balance (input-output balance) etc., as some of the issues to be considered in the manufacturing operations. Similar issues are applicable to suppliers too. Green purchasing aims at reducing the risk to the organization by ensuring that the supplier meets all the environmental requirements of the organization. It is important to ensure that the supplier complies with environmental regulations, does not use any banned substance, improve the energy efficiency of the operations etc. It is also important to help the supplier to be environmentally sound. Issues related to the use of the products, like the toxicity of pesticides, repeated stress syndrome with computer or mobile use, energy consumption etc., were discussed. At the end of life (EOL), the product becomes a waste and it is either recycled, reused, remanufactured etc., or sent for incneration or landfill.

Coming to the social issues related to business, there are a few issues that are not under the control of Business - these are issues like un-employment, lack of educational facilities, poverty, discrimination, poor-hygiene, lack of infrastructure etc., of the society. These are generic issues on which the business organization does not have any control. Through philanthropic activities, however, business can influence these generic issues locally, e.g. by providing medical facilities to the villagers around the factory, by providing clean drinking water to the society, by building roads around the factory, by building townships (e.g. Bhilai, Jamshedpur etc.), by establishing schools, colleges in the villages etc. There are quite a few other issues where the organization has control or influence. These are (a) worker health & safety, (b) Fair wages (above the minimum wages), (c) fair treatment of workers, (d) avoiding discrimation based on sex, race, religion, language, caste, creed, colour etc., (e) avoiding workplace harrassments, (f) working hours, (g) weekly holidays etc. These are internal to the organization. One major social issue, where the organization has control, that affects people outside the organization is the safety of the products marketed by the company (e.g. burning cell phones).

Other issues that are included under "Social" are: ethical issues, governance issues, corruption and bribery

We continued the reading of the article, "The Link between Competitive Advantage and Corporate Social Responsibiity" by Porter & Kramer in the second hour. The main points that came out were the "inside-out" issues and "outside-in" issues (almost similar to those identified by us in the first lecture). Derived from these are the three categories of social issues that are strategic and important for business organizations. These are: (a)Generic Social issues, (b)Value Chain social impacts and (c) Social dimension of the competitive context. Examples of how a particular CSR activity is generic for some companies while for others it can be value chain issue or a competitive context issue have been given. We could see that quite a few points on Sustainability that we discussed in the first two classes are brought out in this section of the paper. In the next class we shall start from the section:
Creating Corporate Agenda