Explain why CSR is an important consideration in operations management:
Corporate social responsibility is the responsibility for businesses actions to be based on respect for people, the community and the broader environment. Corporate social responsibility affects the business in a large number of ways including its profitability, self image and place in the future.
In today’s society, a positive outlook on Corporate Social Responsibility in all companies is not only respected, but expected. In the 1980’s, IKEA realeased a bookshelf producing formaldehyde emissions higher than legislative requirements. This cost the company around seven million, and does not include the cost of lost sales and the unmeasurable amount of customers lost. The company had to readjust their policies or fall at risk to losing more customers. By launching a code of conduct and redesigning products to be more corporately and socially responsible, IKEA’s sales grew steadily each year, peaking in 2008 at 21.2 billion euros ($32.7 billion).
Growing public concern for the environment is putting pressure on businesses to act responsibly. Acting responsibly with resources ensures availability for both renewable and non renewable resources over a long period of time. This public expectation has led to Qantas supporting and participating in the renewal process. Qantas has replaced former planes with the Boeing 787 and Airbus 380 which are significantly more fuel efficient. Along with Jetstar, Qantas operated Australia’s first commercial flights powered by sustainable biofuel. The company now reaps the benefits of having a positive image and received free positive publicity through the media. On top of this, by using renewable resources, the company has ensured that it can continue to operate in the long term.
Society expects that companies act in ethically and socially responsible way. Qantas is one company that has made such decisions which positively affect their image. For example, Qantas has a health surveillance program which monitors workplace conditions and have a reconciliation action plan which focuses on employing indigenous Australians. By making these positive contributions to society, Qantas ensures that its good image is vastly spread throughout entire groups as opposed to a few
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