Corporate Social Responsibility and Human Resource Management Essay Example

company websites and codes of conduct. For instance, ABN Amro states that it is "a responsible institution and a good corporate citizen," while Boeing considers good corporate citizenship as a fundamental value. Hitachi also emphasizes its commitment to being a responsible corporate citizen worldwide, and Shell highlights its dedication to conducting responsible business as a corporate member of society (Jeurissen, 2004:87).

Examples of corporate social responsibility (CSR) actions include going beyond legal requirements in implementing progressive human resource management plans, developing non-animal testing procedures, practicing recycling, reducing pollution, supporting local businesses, and incorporating products with social attributes or features (McWilliams & Siegel, 2001:117). The concept of CSR has gained increasing importance in the business world as more companies embrace it and seek to understand its true meaning.According to Cramer et al. (2004:215), a company must be aware of the social, political, and legal environment in order to succeed and thrive. The responsibility of a firm towards society has been debated among corporate executives for almost 30 years. Initially, there were arguments that a corporation's sole obligation was to maximize financial returns for shareholders. However, it became clear that this pursuit had to align with legal boundaries. In the 1960s, there were calls for a broader understanding of corporate responsibility, which was further emphasized by the enactment of significant social legislation in the early 1970s. As a result, organizations like EPA, EEOC, OSHA and CPSC were created to increase pressure on companies to engage in CSR (Carroll). While many managers have responded positively to these pressures, some still resist by arguing that socially responsible behavior may harm profitability (McWilliams & Siegel ,2000:607).

Stakeholders now expect management to participate

in discussions on social issues and consider the impact of their business on society as a whole (Kok et al., 2001:285). The goal of a corporation is to create and distribute increased wealth and value without bias among all primary stakeholder groups (Clarkson, 1995, p.112). Directors are held accountable for fulfilling the company's obligations towards its primary stakeholders.

The text emphasizes the importance of resolving conflicts within a corporation regarding the distribution of increased wealth and value, emphasizing the need for ethical judgment and decisions (Clarkson, 1995, p.112). It also establishes a clear connection between corporate social responsibility and human resource management by stating that organizations should prioritize employee satisfaction and fair treatment to improve performance and generate profit. The organization should use the profits earned to fulfill its responsibilities towards employees and the community. As a result, businesses striving for excellence must consider business ethics and social responsibility as crucial factors (Fisscher, 1994; Buban, 1995; Nakano, 1999). While Woods (1991) argues that the definition of corporate social performance lacks clarity in its relation to human resource management, it can be understood that corporate social responsibility involves a company's acknowledgement of its obligation to the community, its members, and society as a whole. This implies that human resource management is intertwined with CSR since employees are essential components of both the organization and society. Therefore, companies must prioritize their employees' well-being and address their needs to be seen as responsible corporate citizens.The OECD guidelines for Multinational Enterprises emphasize the importance of respecting human rights and promoting human capital formation, which includes creating job opportunities and providing training for employees in the countries where they operate. It

is recommended to implement effective communication and training programs to ensure employee awareness and adherence to company policies. The OECD Guidelines also state that any discrimination or punitive action against employees who report violations should be avoided. Human Resource Management plays an active role in implementing these policies. Companies aiming to be socially responsible must comply with economic, environmental, and social issues outlined by the OECD, highlighting the relationship between Corporate Social Responsibility (CSR) and Human Resource Management (HRM). Ethical considerations in employment are critical in CSR as a company's employees are part of society within which it operates. Meeting their needs benefits both employees and customers. HRM's connection with CSR is evident as companies demonstrate their commitment to fulfilling stakeholder needs through CSR actions.In today's ever-changing world, it is crucial for businesses to attain competency and balance in order to stay competitive. To achieve this, companies must reconsider their perceptions of the workforce and employment relationships. By adopting alternative perspectives, companies often outperform their competitors. However, amidst restructuring and layoffs that are common in the current climate, businesses face mounting pressure to meet financial obligations. As a result, many companies downsize operations and lay off numerous employees. This has brought attention to how companies treat their employees during times of resource scarcity. Fulfilling legal and social responsibilities towards employees is now seen as either beneficial or harmful to society as a whole.

During economic crises, it becomes even more important for companies to fulfill their corporate social responsibility in human resource management (HRM) in order to maintain or enhance their reputations. Corporate restructuring involves divesting at least 10% of a larger multiproduct company's asset base

and can involve changing the structure, operations, or ownership of an organization. This may include adjusting personnel levels or shifting roles and responsibilities within the company itself. Examples of corporate restructuring include mergers, acquisitions, takeovers, and stock offerings.

In times of poor performance, companies may choose to restructure by closing certain business parts and laying off employees while trying to improve overall efficiency.In the realm of corporate restructuring, there are three primary types of transactions: financial restructuring (including changes in capital structure), portfolio reconstitution (such as divestment and acquisitions), and operational restructuring (which involves retrenchment, reorganization, and alterations in business level strategies). It is common for these forms of restructuring to occur simultaneously rather than being mutually exclusive.

The current economic climate has necessitated an increase in redundancies as organizations downsize their workforce in order to sustain operations. This has resulted in more frequent lay-offs and job losses. In light of economic downturns and credit crunches, companies often find themselves needing to make employees redundant as a means to cut costs. The present climate of restructuring and redundancies places a demand on companies to swiftly adapt and make strategic decisions regarding their human resource management.

Numerous organizations have recently laid off a significant number of workers, resulting in redundancy for these individuals. Although there is indeed a connection between human resource management and corporate social responsibility, it appears unrealistic given the circumstances.

Companies are progressively becoming more streamlined and efficient each day, with numerous examples supporting this trend. Layoffs or restructuring frequently occur as companies aim to downsize operations or expand due to economic conditions or growth aspirations.During economic downturns, companies often let go of less productive employees. This

was evident during the previous recession when firms like Citigroup and Jet Airways laid off workers due to challenging market conditions. Despite employee protests, some individuals were reinstated due to political pressure. A study among Estonian companies' top degree and fiscal directors found that 66% of surveyed firms have either made or plan to make employees redundant. Within the survey, approximately 36% of companies have let go of employees at all levels, with a focus on unskilled workers for 26% and specialists/management for 6%. In contrast, about 34% of respondents have not reduced their workforce and do not intend to in the near future.

An article from November 2008 highlighted a fierce job market with around 15,000 announced job cuts across various industries such as retail, finance, leisure, pharmaceuticals, and car manufacturing sectors. The US economy alone lost approximately 1.2 million jobs until October with an additional loss of 240,000 jobs in October itself resulting in an unemployment rate of 6.5%, according to the Labour Department's reportCircuit City, an electronics retailer based in Virginia, has announced a 17% reduction in its domestic workforce. Although the exact number of job cuts was not disclosed, it is estimated that approximately 7,300 positions will be eliminated out of their roughly 43,000 employees within the US. This makes it one of the largest job cuts reported for November. Another company affected by these circumstances is Hartford Financial, an insurance company based in Connecticut, which plans to cut around 500 jobs. Ford Motor, a struggling car manufacturer, has also confirmed plans to eliminate a total of 2,600 positions as they aim to preserve their cash reserves following a $3 billion operating

loss for the third quarter (Smith, 2008). Joining them in experiencing the effects of the economic downturn in November 2008 were Circuit metropolis, Glaxo, Fidelity,
Mattel,Borgata Hotel Casino La-A-Boy and Ford who collectively laid off approximately
15 thousand employees. According to a study conducted by SD Worx in Belgium,
half of large organizations with over 500 employees are expecting restructuring
in 2009; however , smaller domestic companies and medium-sized enterprises appear less concerned about undergoing such procedures.The global economic crisis in 2008 had negative consequences for the Belgian economy. It is predicted that these consequences will worsen in 2009, with a projected decrease in GDP of 1.9% and an increase in the unemployment rate from 7.1% to 7.8%. The Belgian central bank forecasts a loss of approximately 58,000 jobs for this year alone.

A survey conducted by SD Worx on corporate restructuring between the years 2006 and 2009 revealed that around 41% of companies in Belgium underwent restructuring processes during this period. This has led to an increase in unemployment across both qualified and unqualified manual workers, particularly in vulnerable sectors.

In addition, other types of workers have also been affected by this economic crisis. In the second and third quarters of 2008, there was a significant increase in overall unemployment by 25.3%, with a notable rise of 78.1% among workers aged between 15 and24 (Perin, 2009).

During Cisco's second quarter conference call, CEO John Chambers expressed hesitation about announcing job cuts along with other major tech companies (excluding Apple). However,Cisco has already downsized its workforce by up to1,000 employees through "realignment and restructuring" efforts over the past six quarters as it focuses on promising growth markets.It is expected that another1,500 to2

,000 staff members will be laid off in the coming months(Perin ,20According to Burrows (2004), the realignment strategy of reducing jobs in underperforming areas is viewed as a positive step for the future. The company has already allocated $500 million towards this effort and plans to allocate another half a billion in the coming months. Every quarter, several hundred positions will be cut from their total workforce of 67,000 people. While Cisco management aims to reduce expenses by $1 billion within a year, job cuts are not their primary cost-cutting method. Due to the economic downturn, travel-related expenses per employee have decreased by over 50% (Burrows, 2004). This has prompted numerous companies including Microsoft, Dell, Intel, Proctor and Gamble, Walt Disney, Motorola, IBM, Ford, Boeing to restructure and lay off employees. Despite these tough decisions in downsizing operations and reducing the workforce, these companies are still considered good corporate citizens. For instance,Dell focuses on improving society and being environmentally conscious by striving to become carbon neutral globally and helping clients increase energy efficiency. Similarly,Microsft , Intel , Disney , Motorola also contribute positively towards society but have recently made employees redundantThis challenges the relationship between Corporate Social Responsibility (CSR) and Human Resource Management in the current environment. However, it can be argued that CSR aims to benefit all stakeholders, including employees who are integral to the organization. Companies have a responsibility towards their employees as part of their stakeholder group and overall administration. Recent research suggests that maintaining a strong connection between CSR and HR management may not be feasible for the company due to ongoing restructuring and job cuts. During tough economic times, it

is more important for the company to focus on retaining essential skills rather than holding onto employees despite continuous losses. However, in the long term, employee empowerment and development remain prioritized by the company alongside other stakeholders.