Introduction
Doing business would always be about bottom lines. Certainly, money is what a business needs in order to thrive. However, money comes from various stakeholders of a business such as investors, employees, and most especially the customers. Investors are the ones who fund business projects. Meanwhile, employees help a business make profit. Customers, on the other hand, pour in the money when they buy into the products and services of a business.
In this regard, businesses must take care of these stakeholders so that money, the lifeblood of the business, flows continuously. To attend to these stakeholders, a business must satisfy their needs. Thus, what businesses do is initiate corporate ethics and sustainability or corporate social responsibility.These two terms are interchangeable due to the latter being a major element of corporate sustainability. The other elements are sustainable development, stakeholder theory, and corporate accountability theory (Wilson, 2003).
Corporate social responsibility, according to Kotler and Lee (2005), is an important duty that businesses must observe to make societal communities better. This is done through voluntary business policies and procedures, and the subsidy of corporate resources (Kotler & Lee, 2005). This is a little deviation from Wilson’s explanation. According to Wilson (2003), the basic premise is about the ethical obligation of the company managers in addressing societal needs. This is not to say that managers absolutely have the obligation in considering the needs of the society. However, to some extent, managers consider societal needs (Wilson, 2003).
The concept of sustainability development, on the other hand, particularly touches on economic growth, hand-in-hand with environmental protection and social balance. The concept contributes to corporate sustainability through a provision of scope on issues and on setting societal goals. This complements the other element, which is the stakeholder theory. The stakeholder theory brings out business arguments that set the purpose of working in the direction of sustainability goals. The last element is the corporate accountability theory. It opens ethical arguments in light of reporting sustainability performance (Wilson, 2003).
In this paper, we would delve more into the practice of corporate social responsibility. With this, we would examine a particular corporation in terms of its sustainability mode and leadership. From here, we would see the quality of the company’s performance. Furthermore, we would suggest recommendations that may improve the efforts of the company in its corporate social responsibility. For this paper, we have selected the petroleum company, Exxon Mobil.
Sustainability Model
ExxonMobil recognizes its six key challenges of sustainable development economically, socially, and environmentally. On the economical balance, the issues are on human rights and on managing community impacts and the safety and health in the workplace. On social development, issues include those in corporate governance as well as in economic development and in supply chain management. Lastly, on environmental protection, the company considers the environment performance and the management of climate change risks. The company commits in addressing these challenges in order to bring forth a brighter future for the next generation.Thus, the company’s approach in designing their sustainability model surrounds these key challenges (Exxon Mobil, 2013; Exxon Mobil, 2014).
For human rights and the management of community impacts, the company finds it critical to understand and address the interests of both the communities and societies affected by the business. What Exxon Mobil does is find innovative ways of engaging the stakeholders, determining priorities, and initiating beneficial solutions for the business and communities. In terms of safety and health in the workplace, the company stated that its workforce is the core of its commitment towards integrity. Last year, the company launched the Nobody Gets Hurt slogan. As of now, improvements on measures are continuously being implemented. For corporate governance, the company acknowledges that the shareholders have varied views on the company’s operations. With this, it tries to engage with each shareholder in identifying improvements and opportunities through dialogues and annual meetings. Such meetings are also held for the economic development and supply chain management. Here, the company finds suppliers that it would develop strong relationships with based on the alignment to the core value of integrity (Exxon Mobil, 2013; Exxon Mobil, 2014).
On environment performance, Exxon knew the importance of its environmental people. Its business runs impact assessments and other safety due diligence, such as stakeholder engagement, to protect the environment while operating the business. In managing climate change risks, the company focuses on decreasing greenhouse gas emissions. This is done through the improvement of facilities and technological innovation to strengthen operations. This would result in energy efficiency. Certainly, the company has not ceased in creating solutions that would not threaten world economic development (Exxon Mobil, 2013; Exxon Mobil, 2014).
This is important, as we would see here the extent of the company’s commitment in letting its corporate sustainability efforts known. Based on the fluctuations of the quality and quantity of reporting, the company was inconsistent, especially on such a sensitive oil spill incident. The more sensitive an issue is, the greater the expectations for a definite response. However, with the company’s inconsistent reporting, its credibility is weakened. With this, the company’s move in addressing the six key challenges still has a lot to improve on.
Leadership
Exxon Mobil is led through a board of directors that are being elected in a shareholder meeting annually. It gives a self-governing oversight on the corporate affairs. Annually, the board is independent in choosing an independent director to work for at least two years as a presiding director. This presiding director would be in charge of executive meetings. Last year, the board has gone to a chemical and refining plant to review operations. This meant that the leaders of the company are hands on. This is important because in truly knowing about the needs of various stakeholders, the leaders must engage with them.Exxon Mobil assumes that what is best for the shareholders would be addressed through a leadership model combining the capacity of the chairman of the board and the chief executive officer (Exxon Mobil, 2013).
The company involves the entire organization, including its significant stakeholder, the customers, by encouraging open and transparent communications. E-mails from individuals are directed to the company’s non-employee directors via the website. Moreover, individuals may send written responses to the Secretary of the Company. The directors work closely together with the employees to respondto these concerns (Exxon Mobil, 2013).
Stakeholders
The stakeholders of the company are the 160,000 suppliers; 75,000 employees; 45,000 individuals from communities and nongovernmental organizations; 120 governments of various countries; 2.5 million individual investors; 2,000 institutional investors; and millions of customers buying its commercial and industrial products Exxon Mobil, 2013). The suppliers provide the quality goods to the company while the employees are the operators of the business. The individuals from communities and nongovernmental organizations, on the other hand, help discuss topics from human rights, community improvement, to environment. Similarly, the governments help discussions on taxes, employment, and business laws. In connection to these discussions, these are also forwarded to the investors who have the say when it comes to the leadership of the company.Last but not the least, the company engages with the customers about the various activities of the business through the media (Exxon Mobil, 2013).
Recommendation
Exxon Mobil has already pointed out the key challenges it should address. They are likely the consequences of the incidents in the past. The company just needs to catch up in action. As seen in the case example, the company still has areas to improve on. One is that it could act faster on the deployment of resources. It must form a team that would focus on this operation. Besides, the company should have foreseen such risks given their nature of business. Thus, the managers must have provided contingency measures. Furthermore, the company must continuously provide updates on the past issues. With this, the stakeholders would be able to lend assistance based on their capabilities and truly contribute to social responsibility.
References
Bell, J. (2011). A comparison of Exxon Mobil’s sustainability reporting to outcomes.Journal of Applied Business and Economics, 12(1), pp. 17-26.
Exxon Mobil Corporation. (2013). Corporate citizenship report. Retrieved from http://cdn.exxonmobil.com/~/media/Reports/Corporate%20Citizenship%20Report/2013/ news_pub_ccr2013-2.pdf
Exxon Mobil Corporation. (2014). Corporate sustainability. Retrieved from http://www.exxonmobil.com/lubes/sustainability_commitment.aspx
Kotler, P., & Lee, N. (2005). Corporate social responsibility: Doing the most good for your company and your cause. Hoboken, NJ: John Wiley & Sons.
Wilson, M. (2003). Corporate sustainability: What is it and where does it come from? Ivey Business Journal. Retrieved from http://iveybusinessjournal.com/topics/social- responsibility/corporate-sustainability-what-is-it-and-where-does-it-come- from#.VIkkU0tvb1o
