Social Responsibility and Sustainable Business Practices
Social Responsibility and Sustainable Business Practices
Businesses, specifically larger corporations, play a major role in what occurs in society therefore, they are responsible to their stakeholders not only to pursue economic goals but the greater social good as well. Corporate social responsibility (CSR) means that a corporation should act in a way that enhances society and its inhabitants and be held accountable for any of its actions that affect people, their communities, and their environment. (Lawrence, 2010). Social responsibility is becoming the norm so much so that some businesses have incorporated it into their business model. There are three components of the bottom line of social responsibility in business: planet, people, and profitability (3P). This is also the formulation of the triple bottom line, or TBL.
In this report we look at the Network Data Center (NDC) in Tucson, AZ which provided technical support to the Army installation. The business consists of 120 people supporting over 6,000. Each employee has a minimum of one computer, some have multiple for different classification levels, and two monitors. There are a few classrooms with multiple computers in them as well. The company provides network, server, helpdesk, customer management, information assurance, and various other information technology services to the base. We take a look at the TBL of social responsibility in the view of environmental, ethical leadership, organizational viability, and legal and regulatory considerations and make recommendations for implementation.
Businesses are going beyond regulatory compliance and becoming green. This gives companies a competitive advantage as well as legitimacy and product differentiation, moral commitment to the economy, and cost savings. Environmental analysis is a method managers can use to gather outside information on current issues and trends and turn that information into actions that minimize threats and take advantages of new opportunities. Many corporations use the Global Reporting Initiative (GRI) to farm out guidelines and use them in their own business. Some considerations to take into account are the materials used and the percentage of those materials that are recycled, direct and indirect energy consumption, water withdrawal, biodiversity, emissions, effluents, and waste, reclaimed products and services, compliance, environmental impacts of transportation of products, and the overall protection expenditures. For the NDC, we consider electronics recycling, energy conservation, and waste management.
Electronics Recycling. When the company does its annual lifecycle of computers, laptops, monitors, servers, and the like, I recommend research and review of the possibility of upgrades in lieu of new machines. Then when replacing parts, the old unserviceable ones will be sent to a recycling facility. The company can go to http://www.epa.gov/epawaste/conserve/materials/ecycling/donate.htm to find a place to recycle electronics. Best Buy offers in-store, event, and online recycling program options. I recommend the company review and implement a computer/ electronics recycling program. By upgrading versus new purchase, the company will benefit from cost savings and may be able to upgrade to better machines than they would if buying full new systems. This cost savings can be reinvested elsewhere in the business.
Energy Conservation. The company currently has a high energy consumption in their electronics. Little is done to conserve. Before budget crisis within the company, the rule was everyone had to leave their computers on all night and updates were run at night to maintain information assurance compliance. Since the budget downfall a few years ago, all updates must be done during the day. Employees still leave their machines on at night, restarting before they leave for the night, because the rule has never changed. Efficiency efforts could be in place here to save energy.
Waste Management. Since we already discussed electronics recycling, this consideration is for the waste management of municipal solid waste (MSW) – or everyday items. MSW is the everyday things we use and throw out in the office. This can include items such as packaging, grass clippings, old furniture, bottles, food scraps, and batteries. According to the EPAs annual report on MSW, Americans throw away about 4.3 pounds of waste per person, every day. Preventing waste should be considered as well as recycling and composting.
Electronics Recycling. Electronic recycling is one consideration the company can do better with. Recycling in general lowers greenhouse gas emissions that are caused by manufacturing items for the first time. Recycling electronics conserves natural resources making cleaner air and water. The valuable resources computers and electronic components carry are metals, plastics, and glass. According to the Environmental Protection Agency (EPA), recycling a million laptops would give back enough energy for 3500 American homes’ electricity. A million cell phones would could yield 35,000 pounds of copper, 772 pounds of silver, 75 pounds of gold, and 33 pounds of palladium. Instead of throwing out the old computers and blackberry’s, the company could simply upgrade the hardware or software and then recycle the parts necessary.
Energy Conservation. To conserve energy, it is my recommendation that the company have employees shut down computers at night in lieu of restarting. Although some equipment such as the servers and UPS will still need to run, 150+ computers shut down at night will save energy resulting in cost savings for the company. Not only will this save money in utility billing, but also extend the life of the machines. When purchasing new pieces, parts, and machines, I also recommend looking for energy star equipment that uses less energy when it is running.
I recommend the company implement better plans on waste prevention such as utilizing the electronics we have to manage records instead of printing hard copies. Some of the older generation employees like to have a backup paper copy of items and are not held accountable to the paper reduction policies in place. Preventing excess printing results in cost savings for the company in paper and ink. A recycling and composting plan should be set in place by the company. The waste company provides free recycle and compost containers. NDC simply needs to implement and plan and educate employees on when and how to recycle and composting when appropriate. Employees should be encouraged to use recyclable paper, glass, and metals for meals, dishes, and utensils instead of Styrofoam plates for example. Recycling and composting is free and will scale down the amount of actual waste is used by the company. This essential results in cost savings to the company as well. In addition to the benefits to the company, the efforts of less disposables diminishes the carbon dioxide equivalent into the air helping preserve the earth.
All leaders in business have a responsibility to earn a profit but ethical leaders take it one step further by going above and beyond the regulatory guidance. Bad ethical leadership can cause competitive pressure such as with Enron who fired the bottom 20% of performers every year. This caused employees to focus heavily on numbers and became unethical. Poor ethics in the workplace can cause issues because of personal gain and selfish interest or if there are conflicts of interest. Ethical leaders behave ethically, value and live by ethical behavior, set the pave through expectations and examples, establish an environment of continuous improvement, provides opportunities for people to grow personally and professionally, and they care and act with compassion.
Ethical workplaces encourage long time employees who continue to work there until retirement. Ethical leaders choose to lead. They are the people want to follow, they are not just obeyed by force. These leaders provide vision and inspiration that makes employees feel important and appreciated. Ethical leaders facilitate a positive culture in business motivating and shaping employees’ attitudes. Ethical leadership covers the “people” part of the 3P in the TBL. Some considerations we look at in this category are labor practices and decent work, human rights, society, and product responsibility.
Occupational Health and Safety. This metric falls under labor practices and decent work and covers rates of injury, occupational diseases, lost days, and work related fatalities. For NDC, the rates of injury are the most troublesome. Employees are often sick, office by office as they pass around a virus or bacteria. Ill employees are not asked to utilize their sick leave and stay home. Another thing to consider in this category is employees going home from injuries from lack of ergonomics. There is a climate from management that if a worker asks for an ergonomic accommodation it is because that employee is weak or making excuses. Employees live with wrist or back pain or the like until they are hospitalized or require surgery.
Discrimination. Another consideration for the company is in human rights, or in particular discrimination. There are multifaceted ways discrimination can surface. Although the company does well in most cases, there are few areas where discrimination is not as blaringly evident but still needs to be addressed. For NDC, there is a discrimination of single parents. Single fathers are looked upon with sympathy and empathy. Accommodations are made with scheduling and compliance to regulations. Single fathers who are late because they had issues getting their kids to school are given the compassionate “it’s ok” response. Single mothers are hardly looked at through the same lens. They are viewed as the troublemakers who can’t get their act together. In one such incident a single father divorced because of his own infidelity with multiple women, most coworkers.
The company immediately accommodated his schedule and put him on the coveted day shift so he could work around daycare. In his department, they are required to change schedules and work a different shift, every quarter. He has been on the same schedule for two years because management feels for his “situation”. Another young mother called in one day to let the company know her mother was sick and could not watch the kids. She would be two hours late because she had to wait for her backup daycare to open and take the kids there. When she arrived at work she was given a discipline note explaining that daycare issues are not the organizations problem and she was put on probation of losing her job. When the female employee inquired about the inconsistencies between women and men, they eloquently reminded her she was on probation. These type of incidents continuously happen in NDC. The company should consider their actions, intentional or not. If daycare issues are personal and not a concern of the company, then they should not be a concern for anyone. Discrimination is unethical behavior that looks poorly on the company and ruins morale.
Occupational Health and Safety. It is my recommendation that the company provide hand sanitizer lotion to each employee as well as some in common areas. This will help prevent the spread of germs in the offices. Although union issues limit the supervisor’s ability to make employees use their sick leave to stay home when they are sick, they can educate workers on the importance of not spreading their illness. Masks can be offered to shield sick employees from the healthy ones as well. The local hospital offers free ergonomic evaluations and recommendations for employees regardless if they work in the warehouse lifting heavy equipment, or sitting at a desk all day.
I recommend management change their way of thinking on ergonomics and allow employees to receive the care they need. Implementing preventative actions now will save the company money later. Medical bills will remain lower if people are not having carpel tunnel syndrome surgery or surgery to correct a spinal disk out of place. The company will benefit from having the employees at work and not paying employees to be gone on medical leave. This holds true for caring for sick employees as well. Keeping the healthy employees free from contagions, will save the company time and money as well as get more work done.
Discrimination. My recommendation for the company is to review the accommodations and special exceptions it gives to employees. Sensing sessions should be conducted with the employees or anonymous surveys to bring these type of issues to light. Any discrimination acts reported by employees should be immediately addressed and taken seriously. Unethical behavior by management causes employees not to trust them. Unhappy employees can become disgruntled and even unethical themselves. Someone who is being treated inappropriately will not be as productive and retention can become an issue for the company. Ethical leaders foster communication and better working environments, leading to better business.
Long term survival and sustain profits over time. The longer the company is profitable, the better its viability. To be socially responsible, a company must remain viable. Opportunities, threats, stagnant times, times of growth, and initiating innovative ideas are all opportunities to lower costs and stay ahead of competitors. There are many ways to measure sustainability of a company. The company can use sustainability accounting, conduct shareholder value analysis, lifecycle assessment, balanced scorecard, activity based costing, lifecycle costing, full cost accounting, expected value analysis, and sensitivity analysis. The company must look at itself from a financial perspective, but also from a customer, internal business process, and learning and growth perspective as well.
Market Presence. Being present in the market is core to viability. The company makes purchases from contracts with small businesses throughout the country to level the economic balance. The company also provides services to any local government agency. NDC has a local internal extranet for customers for processes and procedures to request assistance as well as self-help. The hiring process for the company is an online one that is long, difficult, and confusing to someone new to the system. Prospective employees must first create an account and build a resume using the specific template provided. This lengthy process uses a lot of jargon and requires very specific information. Once the account is created, the prospect can search for jobs which can be time consuming if unfamiliar with the jargon. If a job is found, the user can click apply which attaches their resume created in the profile, and then asks multiple questions. These questions are a combination of checkboxes and written responses.
This assessment is typically from four to nine pages in length. After applying, a computer scans resumes for matches of key words, words that were not in the job announcement. Then, the resumes that pass are sent to a human resources department that review for actual qualifications. The remaining qualified resumes are then sent to the hiring branch. The branch has to score each resume based on a preapproved rubric about two pages in length. Once scored, the top people are called for an interview. Once interviews are conducted, the selection is made and sent back to human resources. Human resource department offers the applicant the job and works on the details.
The process often takes months.
Customer Service and Competitive Advantage. Understanding customers’ needs and wants and implementing service based on those desires through a strategic plan is key to maintaining a competitive advantage. Companies must be able to adapt quickly to customer demands. A company must be either low cost or a value added type business. In the case of NDC, the value added is one of providing differentiated products and services that contain only attributes associated with the base. The scope is specialized. The company must still maintain social responsibility in this area and can do so by providing excellent customer service. Without the customers, there would be no business. The company’s customers take many forms. There are civilians, Soldiers, contractors, and suppliers. All services provided by the company are followed up with the opportunity to conduct a survey. Metrics of the work done versus the surveys is also collected and reported to higher headquarters. Service requests that come in are documented in a local system however, phone calls are not recorded.
Market Presence. NDC can improve its market presence with upgrading its current internal website and creating social media venue presence to address the current issues at hand. The company can research competitor sites and come up with more ideas that appeal to the target market. The hiring process needs some work. A thorough analysis of the process should be conducted reviewing the most time consuming portions. For example if the scoring of the resumes at the branch is the issue, maybe a team is created that does only that so the process will go faster. Too often when an applicant is offered the job, it has been so long they have been offered a job elsewhere and decline the invitation. Losing the best qualified employees hurts the company and the bottom line. Remaining in the market competitively involves having the best employees available to provide the best service available.
Customer Service and Competitive Advantage.
Although the surveys are sent to higher management, the metrics are not utilized locally. The only time the feedback is mentioned at all, is if there is a majorly negative survey that comes in and is sent back down to the director. It is recommended that the company have local supervisors review the metrics for their own personnel and address the overall performance of its own employees at the lowest level. This will help improve the customer experience and keep them coming back. Positive customer service should be rewarded and negative ones, addressed.
Clear indications of the level of service that is expected should be communicated. Valid and verifiable expectations should be measured and identified. Customer expectations should be priority, customer service strategy should be analytical and communicated to all units on base internal and external. This will give customers an opportunity to recognize when service is not met as promised. The company should also consider recording its phone calls and conducting quality assurance on the calls to catch issues missed by customers skipping the survey.
Legal and Regulatory Considerations
Social Responsibility within the confines of legal and regulatory considerations and recommendations are similarly important. To remain social responsible, companies must adhere to laws. In addition to conducting business within the confines of the law, companies should proactively anticipate new regulations and act proactively. Since the NDC is a government entity, it must operate within the boundaries of local and federal laws.
FAR. The Federal Acquisition Regulation (FAR), found at http://www.acquisition.gov/far/current/pdf/FAR.pdf, is the governing regulation used by all federal executive agencies in the acquisition of supplies and services. “It became effective on April 1, 1984, and is issued within applicable laws under the joint authorities of the Administrator of General Services, the Secretary of Defense, and the Administrator for the National Aeronautics and Space Administration, under the broad policy guidelines of the Administrator, Office of Federal Procurement Policy, Office of Management and Budget.” The NDC uses the FAR for all acquisitions. Specifically in part 39 of the regulation, Information Technology acquisitions are covered. The FAR governs that appropriated funds are not to be used to acquire information technology that is not deemed necessary to the function and operation of the agency.
Too often in the government and in NDC specifically, the latest and greatest are highly sought after items. The contracting agency sometimes scrutinizes the justification of products too harshly and in other times, not enough. The regulation states that contracting officers must be cognoscente of the rapidly ever changing information technology world. In NDC, users requesting items for purchase must submit the required documents to include justification into a SharePoint portal which is then processed by the acquisitions team. The team reviews and sends completed packets to the contracting office. The contracting office then makes a determination on the item(s).
Exchange of Material and Disposition. Disposition of property in the government is governed by US Code Title 10, chapter 153, Exchange of material and disposal of obsolete, surplus, or unclaimed property. Basically the company is not allowed to see equipment but rather uses it until it does not meet the mission and then the process is to turn in the equipment and recycle most materials. Sometimes older machines, servers, or other information technology pieces of equipment are still in good working order, just not robust enough to accomplish the Army mission or provide proper security. The US Code Title 38 covers veteran’s benefits and part VI chapter 83 covers the acceptance of gifts and bequests. NDC does not donate
any items to organizations outside of itself. The company is being social responsible in disposition of equipment the right way however, it could improve by making more donations.
Federal laws, regulations, and mandatory IT standards for securing private sector information technology systems and data in critical infrastructure sectors is managed by the United States Government Accountability Office (GAO). Information Technology is considered a critical infrastructure sector coming more popular after enactments of the Paperwork Reduction Act of 1995 and the Clinger-Cohen Act of 1996. “GAO has identified a set of essential and complementary management disciplines that provide a sound foundation for information technology (IT) management. These include: IT strategic planning, Enterprise architecture, IT investment management and Information Security.” (GAO, 2014).
Part of the IT disciplines identified in the law is that best practice is to require that processes are documented to account for all operations and be integrated with strategic and operational planning processes. In NDC, the company realizes its social responsibility to create processes. The company has created a web page to host the processes for all things IT. This relates to helpdesk issues, do it yourself ideas, budget and acquisitions information, enterprise license agreements, service level agreements, and a number of other processes. This repository can be accessed by anyone with a government common access card (CAC). The issue with the site is that is it disorganized and mostly unknown to the general public on base.
FAR. Information Technology acquisitions are justified by the users and the contracting office makes a determination if the justification is valid. The company must be social responsible in spending the governments money because it is the tax payers who fund the government. A contractor who is not an Information Technologist, would not be able to make a fair determination if a piece of equipment is needed for the operation of the business or not. It is recommended that the contracting office have an Information Technologist liaison who can help determine if the purchases are valid, or if they are just the users “I saw it so I want it” desires. This would assist the government in getting the items that are needed to perform the job better, and would cut costs on the items that are not necessary to the government.
Exchange of Material and Disposition. One year NDC life cycled all 357 computers for new and improved ones that were capable of handling more security issues. Since it was such a large quantity, the business offered to donate some of the machines to other small businesses in need. One of the smaller reserve units nearby had really old computers with I think Windows 3.1. So NDC donated about 11 computers and the Soldiers were able to work more efficiently during drill weekends. This situation was out of the ordinary. Usually the computers are sent in to a central facility and then cycled out from there. Although this is a social responsible action, I recommend the company look into donating more items in the future. The US Code 38 8301 specifically says that
“The Secretary may accept devises, bequests, and gifts, made in any manner, with respect to which the testator or donor shall have indicated the intention that such property shall be for the benefit of groups of persons formerly in the active military, naval, or air service who by virtue of such service alone, or disability suffered therein or therefrom, are or shall be patients or members of any one or more hospitals or homes operated by the United States Government, or has indicated the intention that such property shall be for the benefit of any such hospital or home, or shall be paid or delivered to any official, as such, or any agency in administrative control thereof. The Secretary may also accept, for use in carrying out all laws administered by the Secretary, gifts, devises, and bequests which will enhance the Secretary’s ability to provide services or benefits.” (US Code 38 Veterans Benefits)
This means the company can donate their used and useful equipment to assist the Veterans Association (VA) to enhance the ability to provide services or benefits. There would not be lengthy tax paperwork but only a small hand receipt trail of the transfer. This would benefit both agencies as well as the Veterans and Soldiers effected by the quality of care.
It is recommended that NDC take the time and consideration to re-do their web pages. A team should be created to specifically handle the project and all shareholders should be involved. This means the company should discuss with the customers as well as the NDC employees on a strategy to build a better more informative site. Once built, the site should be advertised in the base paper, on the installation homepage. These processes should be better organized and updated regularly so NDC remains social responsible to its customers.
Social responsibility is essential to the bottom line. By taking the recommended steps above, NDC can work towards becoming a more social responsible company with constant upward mobility.
Lawrence, Anne (2010). Business and Society: Stakeholders, Ethics, Public Policy. 13th Edition. McGraw-Hill Learning Solutions, 2010. VitalBook file. Bookshelf.
Federal Acquisitions Regulation (2005). General Services Administration, Department of Defense. Retrieved from http://www.acquisition.gov/far/current/pdf/FAR.pdf 21 June 2014.
U.S. Code: Title 38 – Veterans’ Benefits. 38 U.S. Code Part VI – Acquisition and Disposition of Property. Chapter 85—disposition of deceased veterans personal property (§§ 8501–8528). http://www.law.cornell.edu/uscode/text
Government Accountability Office (GAO) (2014). Best Practices and Leading Practices in Information Technology Management. http://www.gao.gov/key_issues/leading_practices_information_technology_management/issue_summary