Good Example Of Corporate Social Responsibility Case Study

Published: 2021-06-21 23:42:27
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Introduction
New Balance is a privately held athletic footwear and apparel manufacturer in the US. Based in Boston, New Balance was founded in 1906, and is the only major company manufacturing its products in the US and labeling them as “Made in the USA.” The company has 200 stores across the globe and operates through five factories in the US and one in UK. The company is private and is not obliged to commit towards its employees or the society as a whole. But that is not the case. The best demonstration of commitment was during the recession of 2007-2009, when New Balance did not lay off any employee.
New Balance holds strong social responsibility as well as culture established by its owners. In the late 1990s, the company embarked on a “Responsible Leadership” journey to address the element of Corporate Social Responsibility and other human rights issues. Though New Balance is privately owned which allows the company to take risks and make choices of their own. The ownership status also lowers the pressures to disclose social and environmental performance. But New Balance has fully integrated CSR into its business strategy.
Strengths of New Balance:
Overall Governance: The owners of New Balance are "humble" and modest. They do not like to brag about their social responsibility initiatives and successes.
Products and Services: New Balance is old and experienced organization with high values. It is a 100 year old company with rich experience in shoe making. The company is very innovative and has won many awards. New Balance provides a wide variety of lifestyle and fitness apparels and accessories such as bags, sports, socks, eyewear, fitness equipment and other shoe care products.
Operations: New Balance is one of the largest athletic footwear and apparel companies in the world. The company has expanded internationally, and sells its products in more than 120 countries. New Balance also has wholly-owned subsidiaries in countries like Australia, Brazil, Canada, France, Germany, Hong Kong, Mexico, Singapore, South Africa and Sweden.
Community Support: New Balance has a number of joint ventures, and distributors worldwide. The wide geographic presence of New Balance enhances its coverage and enables it to count on opportunities in other markets.
Weaknesses of New Balance:
Overall Governance: New Balance is a conservative company and has developed “Endorsed by no one” philosophy. New Balance is not in favor of undertaking celebrity endorsements like its competitors. Thus its brand building initiatives fall back.
Products and Services New Balance is primarily a footwear manufacturer. Though the company also manufactures and sells athletic products such as apparel and related accessories, due to less brand recognition its sales gets affected during tough economic situations.
Operations: The company has limited outsourcing of its manufacturing facility outside the US. This affects its capacity.
Community Support: With limited brand awareness and conservative nature of the company their opportunities of community support are limited.
The biggest area of weakness of New Balance is marketing and lack of celebrity endorsements. This severely affects the company’s ability to reach to the same kind of global awareness as its competitors. In order to remain competitive, New Balance is recommended to outsource more of its manufacturing to low cost destinations like China and increase their capacity. With low manufacturing costs the company can remain competitive.
Corporate Social Steps in General
In general CSR is all about the process of constructing a better world. Thus companies are under tremendous pressure to demonstrate an accountability and corporate responsibility. The CSR strategy requires involvement of various shareholders – the shareholders, customers, management, employees and everyone directly or indirectly related to the company. The CSR strategy is an organizational change process or it involves a new way of thinking, organizing and working. The aim of CSR is to align the organization with dynamic demands of the business as well as social environment. Key steps for implementing an integrated CSR strategy.
- Plan for structured CSR: In the next step an overall a basic strategy and method for embarking on CSR journey is laid out/ planned. The company can examine many other alternative actions, and then set a few priorities adhering to the plan.
- Creation of a formal CSR unit: In the third step a formal organization structure for CSR is created. This includes committees, managers, and departments to help develop action plans, create policies, assign work and budget resources. Performance management goals of the department are also set to quantify its achievements.
- Reporting and Verification: The final step is of reporting and verification. Companies can assess information and report performance about their social responsibility.
Setting up CSR creates transparency, and visible actions for the betterment of the society.
According to a global consumer survey done in 2013, CSR remains a powerful differentiator, which influences both consumer behavior as well as corporate reputation. Nearly all consumers who took the survey noted that when companies engage in CSR related activities; they project a positive image of the company. Customers are likely to trust that company be loyal. Consumer respondents also added that the imperfection of a company is acceptable provided they are transparent and honest about its CSR measures (The Harvard Law School Forum on Corporate Governance and Financial Regulation, 2013).
Corporate Social Responsibility Activity for New Balance: New balance has a very good and well defined CSR in place which does lot of activities to give back to the society. Some of its activities include:
Caring for employees: New Balance maintains a consistent approach towards its employees across the globe. New Balance is the only athletic shoe manufacturer that still has manufacturing plants in the U.S., and it was committed to preserve jobs even during the recession. New Balance has highest grades in the footwear industry for labor conditions.
Leading the change: The management at New Balance was very happy when they shared their first public accounting of our Responsible Leadership efforts. Rob DeMartini, the President and CEO at New Balance said "I am convinced that business is a powerful force for social change and that is one way we all can move forward is to acknowledge our achievements and challenges. In our 106 year history, New Balance has followed its own path, making long-term choices that sustain our business and keep us on the road to success. “(Newbalance.com, 2014)
Reaching out to the community: New Balance is involved in many philanthropic activities by partnering with national and local charitable organizations. “We are Apparel Company for sport, and just want to inspire people to move further, faster, more frequently. New Balance Foundation invested more than $50 million in the last 8 years in social causes such as preventing childhood obesity.” (You Tube, 2012)
Green initiatives: New Balance is an industry leader in environmental ethics. The company was the first one to eliminate PVCs from their footwear. Instead they used recycled materials in their products. They also advocate and adopt building green retail stores, and in creating an environment friendly supply chain. In New England manufacturing facilities, retail stores and warehouses, the company has implemented many energy saving initiatives and widespread recycling programs.
Giving back to the society: New Balance does many activities relating to “responsible shoppers” market. They are providers of fitness apparels and shoes and believe that fitness is very important to every individual, and eventually the world at large.
Though New Balance does a lot of good work, their biggest problem is recognition. They lack awareness of their sincere CSR program. The reason is that the company does not like bragging about their CSR program. The company had a culture of humbleness and thus they believe to be recommended by word of mouth of its customers and other related community members.
Conclusion
There is a growing recognition to track the activities of privately held companies. It has become necessary to use basic management tools and techniques to implement social strategies, formalize it as a business strategy and use it with discipline. New Balance makes lot of effort to have a positive impact on the communities, employees and its customers where it operates. The company adheres to strong ethics and values, and started addressing social compliance with its contracted footwear suppliers in the late 1990s. The company also has a formal health and safety program for its employees in the U.S. and UK, and has built such a comprehensive program for its contract manufacturers too. This enhances their management capacity, provides them with much needed technical assistance, and provides feedback through audits and inspections.
Great intentions must be transformed into action. New Balance does a lot of good work and show commitment toward the society. This gesture must be recognized.
References
Newbalance.com,. (2014). New Balance releases first comprehensive Responsible Leadership Report. Retrieved 6 July 2014, from http://www.newbalance.com/press_2012_nb_releases_first_rl_report.html
You Tube,. (2012). Interview with Christine Madigan, VP of Responsible Leadership, New Balance Athletic Shoe, Inc.. Retrieved from https://www.youtube.com/watch?v=jYv_ERX2qTU
The Harvard Law School Forum on Corporate Governance and Financial Regulation,. (2013). The Corporate Social Responsibility Report and Effective Stakeholder Engagement. Retrieved 6 July 2014, from http://blogs.law.harvard.edu/corpgov/2013/12/28/the-corporate-social-responsibility-report-and-effective-stakeholder-engagement/

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