Introduction
It is important to note that corporate social responsibility, or CSR plays a critical role in modern organizations’ strategic objectives and frameworks. The main reason is manifested in the fact that enterprises are becoming more impactful and influential in social endeavors, which means that corporations can no longer ignore the ramifications of their actions. The sheer importance and power held by large shipping and merchant marine companies are massive since they are key elements of the global supply chain networks. In other words, an entire nation might depend on its adherence to responsible business practices and strategies. The given report is dedicated to the company’s top management team, and it will analyze the CSR initiatives that should be included in the strategy with further recommendations. The CSR initiatives for the shipping company should include reputation and corporate value assessments, innovation-oriented strategy, green innovation, quantity-oriented environmental sustainability, and sustainability committee.
Corporate Social Responsibility and Evidence
The concept of CSR as an integral part of a corporate strategy cannot be overlooked. It is stated that “corporate social responsibility (CSR) and business value of multinational corporations are significantly tied to corporate reputation” (Abugre & Anlesinya, 2019, p. 4). In other words, the basic form of incentive for utilizing CSR is reputation and image projected to the externalities of a company. Research suggests that “CSR strategy positively and significantly predicts economic business value and corporate reputation of MNCs” (Abugre & Anlesinya, 2019, p. 4). In addition, “corporate reputation mediates the relationship between CSR strategy and economical business value of MNCs operating in emerging economies” (Abugre & Anlesinya, 2019, p. 4). Therefore, reputation derived through CSR is not only critical in itself, but it also enhances corporate value.
Moreover, the business strategy of a corporate enterprise is a direct impacting factor on CSR implementation. It is reported that “business strategy is an important determinant of CSR performance” (Yuan et al., 2018, p. 359). The underlying mechanism of interdependence is rooted in an innovation-oriented strategy, which “not only to benefit more from CSR, but also to have more tolerance for the uncertainty, risk, and long time-horizon associated with CSR engagement” (Yuan et al., 2018, p. 359). Thus, unlike efficiency-oriented strategies, a focus on innovative elements yields better results and outcomes with CSR. The latter’s performance requires co-factorial facilitation by promoting innovative and creative actions within a business strategy, where CSR is improved.
Corporate social responsibility cannot be devoid of environmental concerns. It is stated that “if a firm focuses on a broader social objective and includes green innovation and CSR as inborn factors of decision behaviors, will this bring a “win-win’’ for business as well as for the environment” (Chao & Hong, 2018, p. 311). In other words, CSR as an integral part of business strategy is heavily supported since it needs to be incorporated into decision-making processes. By making decisions with primary consideration of CSR initiatives and objectives, a company can achieve mutually beneficial performance regarding environmental issues. In addition, the environmental elements are also affected by the implications of the environmental sensitivity of an organization. It is suggested that “CSR/sustainability practices that affect the quantity (quality) of environmental sustainability disclosure appear to be driven more by highly (lowly) environmentally sensitive firms” (Helfaya & Moussa, 2017, p. 1061). Therefore, considering the shipping company heavily relies on fossil fuels for transportation needs, it is environmentally sensitive. Therefore, quantity factors need to be advanced in order to advance its legitimacy.
However, one should note that CSR activities also require a proper level of supervision. A study found that “the presence of a sustainability committee improves the effectiveness of CSR strategies. The results also indicate that firms with effective CSR strategies exhibit better environmental and social performance” (Orazalin, 2019, p. 140). In other words, specific committees are necessary to ensure that CSR is being implemented and advanced rather than being a mere tool to boost company’s image and reputation.
CSR Initiatives and Recommendations
On the basis of the literature provided above, the CSR initiatives should include reputation and corporate value assessments, innovation-oriented strategy, green innovation, quantity-oriented environmental sustainability, and sustainability committee. Firstly, the company needs to understand and include CSR initiatives of reputation and brand enhancement as a measure to boost the overall value of the shipping company. Although it might seem self-evident, it is critical to properly assess and analyze how the current economic value of the company can improve from additional CSR incorporations into its business strategy. Correct use of CSR can significantly boost the company’s image and perceived value.
Secondly, innovation needs to be a centerpiece of the business strategy since the innovation-oriented strategy is directly interconnected with CSR. The top management needs to focus on finding and sourcing innovative solutions in marine merchant operations. Although efficiency is important, it should not be the sole emphasis of the strategic objective. In other words, the focal point needs to be put on innovative and creative solutions to the existing problems with the use of CSR principles. Thirdly, green innovation should be a core aspect of the strategy since large shipping companies are active users of fossil fuels and are thus contributors to environmental pollution. Green CSR initiatives can manifest in alternative energy sources or less wasteful shipping processes. It is also perfectly aligned with the innovation-oriented frameworks and the basis of the business.
Fourthly, it is important to note that quantity-oriented environmental sustainability is relevant for environmentally sensitive companies, such as shipping enterprises. The main reason is a social expectation of factual and quantitative improvements. The strategy should include initiatives and goals centered around improving the existing numbers, such as reduction of pollution of air, pollution of seas and oceans, or less impact on marine ecosystems. The CSR should emphasize the quantities aspects of responsible endeavors undertaken by the company. Fifthly, the sustainability committee is the last and most critical CSR initiative to be included in the strategy. Although many companies, including the shipping business, might be reluctant to do so, it was shown that the sustainability committee greatly improved CSR implementation and performance (Orazalin, 2019). The latter outcome is reflected not only in environmental improvements but also in social enhancements.
Conclusion
In conclusion, the CSR initiatives for the shipping company should include reputation and corporate value assessments, innovation-oriented strategy, green innovation, quantity-oriented environmental sustainability, and sustainability committee. Each of these elements is tightly interconnected with each other and supported by evidence. The company should work towards focusing on innovative solutions to environmental and social problems to boost its reputation and economic value.
References
Abugre, J. B., & Anlesinya, A. (2019). Corporate social responsibility strategy and economic business value of multinational companies in emerging economies: The mediating role of corporate reputation. Business Strategy & Development, 3(1), 4-15.
Chao, A. C., & Hong, L. (2018). Corporate social responsibility strategy, environment and energy policy. Structural Change and Economic Dynamics, 51, 311-317.
Helfaya, A., & Moussa, T. (2017). Do board’s corporate social responsibility strategy and orientation influence environmental sustainability disclosure? UK evidence. Business Strategy and the Environment, 26(8), 1061–1077.
Orazalin, N. (2019). Do board sustainability committees contribute to corporate environmental and social performance? The mediating role of corporate social responsibility strategy. Business Strategy and the Environment, 29(1), 140-153.
Yuan, Y., Lu, L. Y., Tian, G., & Yu, Y. (2018). Business strategy and corporate social responsibility. Journal of Business Ethics, 162, 359-377.