Posted by: nuleadership | January 27, 2014

Corporate Social Responsibility: Toyota – Guest Blogger

Toyota_Logo_Newes

Introduction

In late spring 2013, I was able to witness an interesting example of a company promoting philanthropy and community relations.  Shoichiro Toyoda, Toyota’s honorary chairperson, donated $2 million to help build the Howard H. Baker Jr. Center for Public Policy at the University of Tennessee.  As you may know, the Toyota Motor Corporation, a multi-national automaker, was established in 1937 and founded by Kiichiro Toyoda.  Toyota employs more than 330,000 people around the globe by 509 consolidated subsidiaries.  

The University of Tennessee reported that Toyoda made a trip from Japan to the campus because he wanted to see his good friend, Sen. Howard Baker, and the new facility.  Toyoda also visited Denso Manufacturing Tennessee, Inc. to tour their manufacturing facilities and then Eco Park to which Denso Manufacturing Tennessee had donated land, trails, trees, and other resources to the community for environmental education on litter prevention, recycling, and pollution prevention.  Toyoda voluntarily took a seat right next to local school students and was fascinated watching a hazardous material disposal simulation.  Toyoda appreciated Denso Manufacturing Tennessee for contributing to the community.  It was Toyoda’s genuine gesture to care about children and education, communities, and environmental issues.  

Pless (2007) pointed out that “a strong values base is also a characteristic of the role of the steward.  The metaphor of the leader as steward makes references both to being a custodian of values, a stronghold to protect professional and personal integrity” (Pless, 2007, p. 445).  I value the opportunity to meet the leader who passionately led Toyota Motor Corporation to contribute to efficient manufacturing systems, strive to produce automobiles with safety and environmental conscious concepts, and set the tone at the top to enhance corporate social responsibility. 

Change Management 

Adjusting business strategies and practices in a quickly changing global environment is a key subject.  As an automotive industry leader, Toyota has been tactfully changing management to adjust and adapt to constantly changing business environments.  Aspirations and principles found in Toyota’s Code of Conduct is influenced by the Japanese cultural characteristic that emphasizes harmonious business relationships with customers, suppliers, dealerships, and local or global communities while focusing on providing lively, safe workplaces to employees. 

The Code of Conduct guides Toyota’s business strategies such as human resources or environmental protection activities in accordance with fundamental ethical policies.  Toyota focuses on multiple subjects to operate fairly in the global marketplace in and communities where different cultures and diversities exist.  Toyota strives to utilize labor diversity while supporting equal employment opportunities including promoting a women’s workforce and people with disabilities. 

They also invest heavily in Research and Development (R&D), not only to produce quality cars and trucks, but also to promote safety activities and environmental preservation globally.  For instance, Toyota’s sustainability report focuses on improving traffic safety and car quality, contributing to a low-carbon society, and supporting global communities while they thrive to comply with safety and environmental laws.

R&D is not limited to a car’s safety features but also to accommodate workforce changes in production systems.  Recently Toyota announced that one of their assembly plants is dedicated to the employment of retirees.  The plant is designed to produce only one model at a slower cycle time to be easier for the senior employees’ level of physical fitness.  This activity is Toyota’s quick response to the government’s amendment to the senior citizen’s employment promotion law to provide a friendly work environment (Sankei Digital, 2013, para. 2).  It helps older workers to be able to operate machines and work at assembly lines at a slower pace. 

The Toyota Manufacturing System (TMS) is known as a socio-technical system, based on their management philosophy and practices to reduce unnecessary moves or inventories, to achieve the just-in-time and lean-manufacturing concepts.  TMS is designed to set up efficient and effective assembly lines for profitable production systems while quality fundamentals are met.  On the contrary, accommodating the aging work population has become a focus rather than excelling profitability.  Even if the assembly plant may not operate as efficiently as they would wish, Toyota found the initiative to solve the social challenge.  Toyota is often known to lead the industry in Japan by addressing social issues and initiating systems for improvement.  

Profitability vs. Sustainability 

The 2011 Tohoku earthquake and tsunami in Japan were nobody’s fault.  Over thousands of years, on the small island country, the Japanese have learned to find ways to live in harmony and help each other to survive from environmental threats.  This harmonious society was harshly tested by the earthquake and tsunami to survive. 

The Tohoku region in northern Japan is known for its fishing industry, severe winter weather, and is often being threatened by earthquakes.  On the contrary, the locations are convenient for manufacturing sites to transport products to Tokyo and large metropolitan areas, consequently, many Japanese automotive components companies or heavy-duty industries located their manufacturing facilities in this area.

Severe damages by the earthquake and tsunami paralyzed water and power supplies, roads, or telecommunication systems.  Infrastructure damages kept products from being transported out of the area.  Manufacturing plants could not resume operations for weeks, and automotive component inventories were exhausted before the global supply chain was restored. As a result, automakers in Japan and the United States were forced to suspend operations or reduce production hours due to a parts shortage.  The disaster tested the vulnerability of the global economy affected by the major disaster and left us with many questions on how we can best prepare for unexpected catastrophes such as hurricanes, tornados, floods, wildfires or a financial crisis, such as the Great Recession.

One isolated country’s disaster can have a huge impact on the global economy. If organizations want to be better prepared for disasters, they must establish an effective risk management program and find the best investment options or contingency plans to minimize operational interruptions.  Furthermore, governments and corporations can collaborate to assist victims and develop unfortunate areas.  It requires a national strategy to coordinate social responsible activities to provide immediate reliefs and rescue a nation. 

In order to distribute electricity to the affected Tohoku areas, manufacturing companies in metropolitan areas modified their work schedule and implemented a rotational blackout.  Within six months, the Toyota Motor Corporation initiated regional revitalization plans in the Tohoku region, including the establishment of the Toyota Motor Tohoku Corporation to support post-quake reconstruction. 

It is also equally important for corporations to protect the natural environment while being profitable.  Steiner and Steiner explained the increasing interest in sustainable development by corporations to support non-polluting economic growth that raises standards of living without depleting the net resources of the earth (Steiner & Steiner, 2012, p. 442).  It is a corporation’s social obligation to prevent pollution and provide safe workplaces for communities. 

Michael Porter defines pollution in his book, On Competition, as a sign of resources being used incompletely, inefficiently, or ineffectively when scrap materials, harmful substances, or energy forms are discharged into the environment.  Porter feels pollution is also as sign of mismanagement.

For instance, Toyota’s environmental philosophy is to reduce environmental impact at all stages of vehicle development from production, use, disposal, and recycling while undertaking environmental activities in all business areas on a global scale (Cortez & Penacerrada, 2010, p.124).  The Toyota Manufacturing System emphasizes eliminating wasteful resources, unnecessary conveyance, and excessive inventory to achieve efficiency, increase profitability, and reduce costs. 

Porter also stresses that pollution reveals flaws in the product design or production processes (Porter, 2008, p.350).  Cardboard or plastic bag packaging is a truly wasteful material because it requires so much labor and time to unpack, flatten, gather, and transport it to landfills.  Toyota recognized and corrected this flaw in processing by replacing cardboard packaging with rigid, plastic reusable containers.  Thousands of suppliers are required to use reusable boxes to protect parts from being damaged during transportation, and at the same time, eliminate packaging waste. 

Setting up the returnable container system required an initial investment to purchase boxes; however, this cost is usually amortized during the program life of two to four years.  After their use, the plastic boxes can be sold to other companies for further recycling.  In 1999, Toyota Motor Engineering & Manufacturing North America (TEMA) created an initiative to become a zero-landfill company.  Since 2012, thirteen manufacturing plants have been recognized as true zero-landfill plants.

I believe that profitability does not always have to suffer while corporations are trying to be responsible for social issues.  There is a way to attain both objectives at the same time.

Can you share other good corporate examples?  Who drives the social corporate responsibility in the organization? 

© 2014by Noriko Chapman

Noriko-professional-web

About Noriko Chapman:

Noriko Chapman, who is a native of Japan, is an international traveler and a role model to millions of women looking to overcome extreme obstacles in life. She is a production control section leader for DENSO Manufacturing, TN.                                        

DENSO Corporation, headquartered in Kariya, Aichi prefecture, Japan, is a leading global automotive supplier of advanced technology, systems and components in the areas of thermal, powertrain control, electric, electronics and information and safety. Its customers include all the world's major carmakers. Worldwide, the company has more than 200 subsidiaries and affiliates in 35 countries and regions (including Japan) and employs approximately 120,000 people.

A mother of two, she has over 20 years of experience in the automobile industry and is a cancer survivor. Noriko led a successful campaign to assist the Tennessee Rehabilitation Center (TRC), which works with disabled adults to secure employment. Her book co-authored by Dr. Daryl Green, Second Chance, was inspired by the TRC. For more information, you can visit her on Facebook.com.

References

Cortez, M.A., & Penacerrada, N.T. (2010).  Is it beneficial to incur environmental cost? A case study of Toyota Motors Corporation, Japan.  Journal of International Business Research, 9, 113-140.

Pless, N. (2007).  Understanding responsible leadership: Role identity and motivational drivers.  Journal of Business Ethics, 74(4), 437-456.

Porter, M. (2008). On Competition. Watertown, MA: Harvard Business Press.

Sankei Digital. (2013). Toyota, line and post-established retirement age dedicated to veteran employees for reemployment opportunity.  Retrieved from   http://www.sankeibiz.jp/business/news/130504/bsa1305040806000-n1.htm

Steiner, J. F. & Steiner, G.A. (2012). Business, government, and society (13ed.).  New York, NY:  McGraw-Hill.

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Responses

  1. Very nice article. UT is fortunate to get such a generous donation.
    Elizabeth

    Program Manager
    Environmental Management
    Oak Ridge Office
    P.O. Box 2001
    Oak Ridge, TN 37831
    (865) 241-6172 phone
    (865) 241-1984 fax
    phillipsEC@emor.doe.gov

  2. Great article. UT is so lucky to get such a generous donation from Toyota.

    • Hi Elizabeth,
      Yes, I agree! I was touched by the story that the 88-year-old chairperson wanted to make a special trip from Japan to Tennessee to see Sen. Baker and the new center site. It’s an example of setting the tone at the top to promote philanthropy and global community relations.

  3. First I would like to thank you Ms. Noriko Chapman for talking to our class Monday evening. It was a very informative and I enjoyed the historical aspect of it just as much as the companies’ decision making process during the supplier’s inability to supply your company with needed parts during Japan’s disaster in 2011.

    I find it very interesting that Toyota’s Code of Conduct strives for diversity like the United States does. I have traveled around the world a few times and I have never read or seen any industry outside of the US strive for diversity like the US does. It intrigues me to wonder if they are diverse because of the back lash they would receive from the US or is this something all of Japan is pursuing. I was astonished to find out Toyota has a diversity strategy. Toyota’s 21st (n.d.) stated, “a ten year, multi-billion dollar sustainable commitment to minority participation in Toyota—today and tomorrow.” I don’t know of any company in the US having a 10 year plan. Maybe Japan is striving to surpass the US in recognizing the importance of diversity? I would like to hear your thoughts on this.

    Toyota’s 21st Century Diversity Strategy. (n.d.). A comprehensive program for minority participation in Toyota today and tomorrow. Retrieved from http://www.toyota.com/about/diversity/21stCenturyDivStrategy.pdf

    • Hi Paul,
      Thank you very much for having me in the class. I truly enjoyed meeting with all of you and discussions.
      You brought a great question about having the long term plan. It’s a common practice for many Japanese companies to have 3-, 5-, or 10-year-plans in their business strategies. When we have a bigger, long-term vision, we also have to be realistic and establish a path to get there. It may take several years for organizations to implement it. In order not to lose the focus, it’s important to keep track of milestones. Managements constantly check on progress, weekly, monthly, or yearly and then make modifications if necessary. The management practice is known as the P-D-C-A cycle, Plan, Do, Check and Act (Kaizen-continuous improvement). I believe that Toyota excels in Kaizen activities for improving car performance or promoting diversity at workplace!

    • Thank you for speaking with our class. Your presentation was awesome! It was very well put together, educational and encouraging. It covered manufacturing, ethics, history and your personal story; it was very inspirational. A huge kudos to you and your courage.

  4. I work for a global consulting company who is heavily engaged with various aspects of social responsibility. There are diversity programs in place. The company invests heavily in reducing environmental impact for themselves, as well as finding ecological solutions for the companies we work for. We work with both our local and global communities, especially when faced with natural disasters. After an earthquake last year in Southeast Asia, there was a global giving campaign to help our employees in the region, as well as the communities affected in general.

    One of the big programs we launched is called “Skills to Succeed”. This is a global program designed for employees to teach skills and provide training to help people start a business or get a job. By 2015, the goal is to help 500,000 people with this program.

    A study by Eberle, Berens, and Li (2013) shows that companies who engage in and share their social responsibility efforts tend to be rewarded with a more positive reputation and feeling of identity by their customers. Another study by Flammer (2013) shows that companies who made progress on lessening their environmental impact showed higher stock market gains than those who did not.

    Eberle, D., Berens, G., & Li, T. (2013). The impact of interactive corporate social responsibility communication on corporate reputation. Journal of Business Ethics, 118(4), 731-746. doi:10.1007/s10551-013-1957-y

    Flammer, C. (2013). Corporate social responsibility and shareholder reaction: the environmental awareness of investors. Academy Of Management Journal, 56(3), 758-781. doi:10.5465/amj.2011.0744

    • Hi Greg,
      Thank you very much for sharing your experience and dedicating your work to global communities. What a great program trying to help 500,000 people! It’s gratifying to hear about those companies making social responsibility efforts.

  5. Drucker talked about social responsibility as far back as 1995. In his book “Managing In a Time of Great Change” he said: “the modern organization must be in a community but cannot be of it.”(Drucker, 1995, p. 81) He was emphasizing how an organization must be true to its values, vision and mission while living in a community, without letting that community cause too much distraction. However, Drucker then goes on to almost immediately state: “economic performance is the first responsibility of a business…but economic performance is not the only responsibility…every organization must assume full responsibility for its impact on employees, the environment, customers, and whomever and whatever it touches.” (Drucker, 1995, p. 84) To me, those are powerful words. Our organizations should not get so wrapped up in our communities that we lose sight of our purpose, which is economic performance. At the same time, organizations much maintain awareness and control as much as possible the impact they have on those communities.

    Drucker, P. F. (1995). Managing in a time of great change. New York, NY: The Penguin Group.

    • Yes, I agree that it’s not easy to balance a company’s focus on profitability and social responsibility. Organizations operate healthy internally in order to make positive impacts to communities. Thank you for your thoughtful comment.

    • You stated: Our organizations should not get so wrapped up in our communities that we lose sight of our purpose, which is economic performance.

      In our course, Principles of Management we had an opportunity to write a paper on Peter Drucker and many considered him the creator of modern management. He definitely spent most of his life examining the world around him. In the article, Bounded Goodness: Marketing Implications of Drucker on Corporate Responsibility, Smith states, “Drucker (1974) asserted that business must do well to do good and offered examples of companies that got into trouble because they assumed social responsibilities which could not be supported economically” (2009). It is important for organizations to first determine between social impacts (of the company on society) and social problems (i.e., disease, eco-friendly products, etc.). It is very true that companies have to make enough profit to cover costs of the future. If not, then no one wins.

      Smith, N. (2009). Bounded goodness: marketing implications of Drucker on corporate responsibility. Journal Of The Academy Of Marketing Science, 37(1), 73-84.

    • Financial concerns are the foundation of any business. Without it, there would be no social responsibility. However, the days of just producing in-demand products for a profit are gone. More and more emphasis is being placed on how companies are producing their products and how ethically they are conducting business. Some recent studies have shown that companies with a higher degree of corporate citizenship actually have a higher return on assets and higher net profit margins (Nuryaman, 2013). Also, investors are seeking out reputible companies which makes growth and access to capital much easier for ocially responsible businesses (Zhang and Rezaee, 2009).

      Nuryaman. (2013). The effect of corporate social responsibility activities on profitability and stock price. Journal of Global Management, 6(1), 113-124.

      Zhang, R. and Rezaee, Z. (2009). Do credible firms perform better in emerging markets? Evidence from China. Journal of Business Ethics. doi 10.1007/s10551-009-0038-8.

    • Georgette,

      You said, “Our organizations should not get so wrapped up in our communities that we lose sight of our purpose, which is economic performance.”

      Peter Drucker is the perfect person to quote on this topic. He genuinely believed in the responsible role of companies within a community. According to Drucker, “Leaders in every single institution and in every single sector … have two responsibilities. They are responsible and accountable for the performance of their institutions, and that requires them and their institutions to be concentrated, focused, limited. They are responsible also, however, for the community as a whole.” Peter Drucker was truly innovative in his field and I believe young business leader, including ourselves, can learn a wealth of information from his teachings.

      Hasselbein, F. (2010). How did Peter Drucker see corporate responsibility? Retrieved from http://blogs.hbr.org/2010/06/how-did-peter-drucker-see-corp/

  6. Hi,
    I’m very sorry to hear that your family was affected by Hurricane Katrina. You made a great point by commenting that “to see our leadership make that commitment to its staff was inspiring and allowed us to see beyond our own loss to help those in even greater need.” Thank you very much for sharing your personal experience.

  7. Blog post 4 response

    Recent events such as the tsunami affecting Japan demonstrate how global markets and the global economy can be impacted by relatively localized events. Repercussions of unethical motives and behaviors on the part of banking executives in Europe can cause a ripple effect in the global economy (Cavanagh, 2000).

    The economy is relatively new to globalization, but we have always shared a global ecology. Multi-National Corporations must consider social responsibilities of ethical use of natural resources and treatment of the environment (Zsolnai, 2011). A large corporation like Toyota taking an ethical approach to environmental impact has a ripple affect on a global scale, which can drive change in other industries (Zsolnai, 2011). Just as Companies followed process changes that were successful at Toyota, it is likely others adopt proven ideas for environmental conservation.

    References:
    Cavanagh, G. F. (2000). Political counterbalance and personal values: ethics and responsibility in a global economy. Business Ethics Quarterly, 10(1), 43-51.

    Zsolnai, L. (2011). Environmental ethics for business sustainability. International Journal Of Social Economics, 38(11), 892-899. doi:10.1108/03068291111171397

    • Hi Christopher,
      Greenhouse gas emissions are recent global concerns. The automotive industry is one of business sectors that are forced to take an active role to reduce greenhouse gasses. Not only Toyota but also GM or other automobile manufacturers have recognized the responsibility as the first priority to invest resources and implement strategic plans in order to save the planet. As you cited, I totally agree that “multi-national corporations must consider social responsibilities of ethical use of natural resources and treatment of the environment.” Thank you very much for addressing the issue.

      • The initiative by so many automotive companies to add hybrids and make their cars more fuel efficient is a very necessary change.Tesla Motors even appears to be making headway with their completely electric cars now. I think the re-positioning by the automotive industry is exemplary of ethical practices. Companies like Toyota were very early adopters to hybrid technology and is especially indicative of their ethical responsibility and their corporate culture that puts importance on the environment and their customers. I feel as though Japanese and European companies seem to be ahead of American green initiatives, but we are finally catching up. Companies like Denso and Toyota seem to be ambassadors for such responsible practices in America, only proves to extend the environmental and societal impacts of Toyota and Denso for the better.

  8. Thank you Miss Noriko Chapman for being our guest blogger this week it was very informative.
    I have work experience with Papa John’s and thus decided to look at what philanthropic activities they have been a part of recently. According to the reporter for the Business First newsletter, Robinson (2013) Papa John’s International Inc. announced Thursday that it will make a charitable donation of $100 for every home run hit by a Louisville Bats player this season at Louisville Slugger Field and $1,000 for every grand slam. The donations, through the company’s Homers for Heroes Campaign, will go the Addison Jo Blair Cancer Care Center at Kosair Children’s Hospital. I feel proud to be a part of a team who makes it a point of duty to give back to the community.
    Robinson, A. (2013) Papa Johns to make donations for bats home runs. Business First. Retieved on January 30, 2014 from http://www.bizjournals.com/louisville/news/2013/04/18/papa-johns-making-donations-for-bats.html

    • Hi Jenelle,
      Thank you very much for sharing the great example by Papa John’s strategic philanthropy known as cause marketing. You made a good point that their gesture makes employees feel more proud of the company and being part of the team!

  9. Ms. Noriko Chapman,

    First of all I would like to thank you so much for being our guest blogger this week. I really enjoyed the material presented on Toyota. It’s ironic because a group in our class just did a case study on Toyota last week as well. Thus, some of the things you discussed seemed quite familiar, and I was able to make comparisons. I agree with you on most of the things you wrote on about social responsibility, and throughout my reading I found myself making relations with the company I work for. I am an engineer for AT&T networking, (not mobility). This company also displays quite a bit of outgoing social behaviors and plays many roles with the public such as the “no text and drive” campaing, diversity, and other topics. A study performed by Benabou and Tirole discusses how societies demand this top quality interaction, and the benefits of each factor. It is very apparent that the public will take major interest in a company that takes interest in its consumers.

    Thanks!
    Morgan Taylor

    BÉNABOU, R., and TIROLE, J. (2010). Individual and corporate social responsibility
    Economica , New Series, Vol. 77, No. 305, pp. 1-19.

    • Hi Morgan,
      Thank you very much for sharing the AT&T’s example. Did you know AT&T was ranked 1st on the annual list of 100 Best Corporate citizens in 2013 by CR Magazine? Wow. Your comment well explains how companies can be socially responsible for their products and services. I value those companies who initiate actions to protect consumers from injury, fraud, or other abuses.

  10. Ms. Noriko,

    I want to thank you for talking to our class Monday night. It is always nice to learn more on certain historical events that have happen that many might not know about. I enjoyed having you teach our class about what your company went through in Japan. Also, I want to say I’m happy to hear you beat cancer! I’ve lost some close people to it and I’ve also had close friends and family beat it and I know how terrible it is. I just wanted to recognize you for that.

    I don’t know if you remember me telling you but I work at UPS which I see a lot of cardboard, and I mean a lot. I can 100 percent relate that cardboard is very wasteful. I am glad that Toyota decided to see how wasteful it was and decide to go another route. There are so many busted packages that come through UPS that it is almost impossible to believe. I just think that it is really important to transport goods to and from where they need to be without them getting damaged so often. Toyota’s 21st (n.d.) stated “We aligned our diversity commitment to the tenets of the
    Toyota Way, “respect for people” and “continuous improvement.” Respecting peoples packaging is definitely on the way to improvement. The good thing about the containers Toyota uses is that they can be recycled and sold to other companies. Profitability does not always have to suffer. There is always two ways for both situations to benefit.

    • Hi Shane,
      Yes, I remember you working at UPS. Our company has been also benefit by their service for moving shipments fast and accurately around the globe. Their logistics system is impressive. Thank you very much for discussing the cardboard issue. In many cases, we have to rely on the cardboard shipping. I am glad to see that many companies have been developing lighter, better recyclable packing materials rather than plastic peanuts!

      • Shane
        I think it is great to see that the recycling projects around the world to save the planet for the next generations. The plastic packaging containers that Denso uses for a lot of the products that go from the Denso Manufacturing plants is amazing to work with. There are some cardboard containers that they used when I was there but they continually reuse then over and over again.

  11. Ms. Chapman, first I would like to think you for visiting our classroom this week and for speaking with us. You are very inspirational and your visit is appreciated! Your blog post is also interesting, I love the way Toyota strives to be socially responsible even if it costs the company a little bit of money. You asked if we could share other examples and Ben and Jerry’s Ice Cream comes to mind. The Ben and Jerry Foundation “awards about $1.8 million annually to eligible organizations across the country and in Vermont” (benandjerrysfoundation.org). This money is in the form of grants and is awarded to non-profit organizations that wish to make a socially responsible change. By doing this, the company is helping others be able to make their organizations more socially responsible. Employees of Ben and Jerry’s are involved in choosing the recipients for these grants and a lot of thought goes into the selection. By helping others help themselves, Ben and Jerry’s is doing a great service.
    Benandjerrysfoundation.org. 2014. Retrieved at benandjerrysfoundation.org

    • Amanda, I think Ben an Jerry’s is a great example of a company who acts in a socially responsible manner; but I do question if they are the ‘BEST’ example. BenandJerry.com states, “they are a B Corporation( Benefit Corporation)”. In my opinion, A B Corporation is an entity that wishes to be viewed by the public as acting in an ethical manner that has the best interest of the public in mind; while at the same time they are a for profit business. On average, Ben And Jerry’s Ice cream cost about 50% more per serving than other leading brands. The high cost to consumers allows Ben and Jerry’s to be more socially responsible but also maintains a large profit margin for themselves. I disagree with the current formation of B Company Charters and would like to see those companies be moved into a non-profit organization.

    • Hi Amanda & Kevin,
      Thank you very much for your discussions! Ben & Jerry’s example may be seen as strategic philanthropy in which charitable activities are aligned with strategic business goals. I like B&J’s involving their employees in the CSR decision making.

  12. With there being so much bad publicity in recent years floating around the automotive industry; whether it is car emissions polluting the air or having adverse effects on the ozone layer, many consumers are seeking those companies who intend to be socially responsible. Denzo’s donations to Eco Park speaks highly of the Japanese and their initiatives to maintain an ethical company that, not only maintains efficient quality/operations standards, but also seeks to ensure ethical action is at the very core of all of their endeavors. Collins states, “that philanthropy is a major constituent for a companies ability to measure its reputation against competitors within a community which it operates” (2012). Denzo will surely see increased success in future years and maintain a competitive advantage if they continue maintaining an ethical commitment.

    Collins, D. (2012). Business Ethics: How to design and manage ethical organizations. Hoboken: NJ. Wiley.

    • Hi David,
      Thank you very much for your kind words. The company is also an educator to teach employees how to recycle paper, plastic bottles, aluminum cans, etc. at workplace or home. It is a small act by individuals, but the small acts can be added up to help reduce trash in landfills!

  13. CSR is important to any firm’s long term success. CSR is particularly important to firms working in consumer-driven industries. Apple is a good example of a company that offers high-end products to a relatively astute, socially minded customer base. It is a wonder then that Apple has had such a difficult time in the last few years with problematic worker conditions at its overseas manufacturing plants. The largest of these plants, Foxconn, is located in China, and is in fact the largest electronics manufacturing plant in the world. Apple employs Foxconn in order to ramp up the kind of supply Apple uses to maintain its incredible profitability. Unfortunately, this profit is built off of the back of Foxconn’s egregious working conditions- conditions that have resulted in mass suicide and accidental death resulting from explosions.

    Apple is still in the midst of addressing this CSR concern. Notable changes that have already been instituted by Apple are wide-sweeping 25% pay raises. The average worker in the factory now makes around $290 a month. Inadequate CSR will eventually hurt sales. Apple seems to realize this as they are continuing to address the Foxconn situation.

    Examining Apple’s Core: Will CSR Prevail?. (2012). Business & the Environment, 23(3), 7-8.

    • Hi Caleb,
      Thank you very much for discussing on the Apple case. Multinational companies can have many positive impacts to local economies by buying facilities, helping local vendors, and hiring workers. It is hoped for the companies to find the fine balance of seeing profit and giving back to communities.

  14. Ms. Chapman, I want to thank you for speaking with our class. Andrew Carnegie stated, wealthy business people should apply their wisdom … to spending excess wealth in a way that enriched the lives of the poor through public projects (Collins 2012). Chevron contributes to the economic and social well-being of people in the countries where they operate. They recognize the relationship of healthy businesses and healthy societies. Wherever they have a presence, they go all-out to be a good neighbor, sharing the concerns of the communities and dedicating their capabilities, resources and people to creating a better future. To be a part of those communities they work with the host countries to understand the local needs and the reasons behind them. Since 2006 they have invested more than $1 billion to fund initiatives that increase economic stability and improve the quality of life in communities around the world.

    http://www.chevron.com/corporateresponsibility

    Collins, D. (2012). Business Ethics: How to design and manage ethical organizations. Hoboken, NJ: Wiley

    • Hi Greg,
      Another great example! I’ve just read Chevron’s Corporate Responsibility Report. The energy company is truly committed to improving environmental, social and health impact issues for the global community. Thank you for sharing the information.

  15. Ever since Norfolk Southern has created a sustainability department and appointed an officer to oversee the department and their activities, the culture of the workforce has changed. The employees are now thinking of ways to help their community and preserve the environment and help to preserve company resources.
    Not only has the company decided from top-level management that they would implement social responsibility efforts that would support the communities they serve but they would also devise ways that would improve efficiency while preserving the environment. It has gone from being a management decision to one that reflects active participation from the employees. The employees have bought in on the idea of sustainability and enjoy seeing the communities around them prosper as a result of their giving back to the community. The behavior of the workforce has steadily changed over the years into one concerned about the neighbors around them and their sustainability.
    Communities, customers benefit from Norfolk Southern’s progress on sustainability.
    (2013, July 17). The Association of Corporate Contributions Professionals. Retrieved July 27, 2013, from http://www.accprof.org/about-us/news_detail.stml?portalProcess_dd_0_1_3=showPublicEvent&calendar_entry_id=7029

    • Hi Billey,
      It’s an interesting story about Norfolk Southern. I love the way that the employees are involved in creating ideas and “enjoy seeing the communities prosper as a result of their giving back.” Then, the prosperity benefits employees’ families and friends in the communities as well!

  16. First of all, I too would like to thank you for speaking with us on Monday night, Noriko. You are very knowledgeable of your field and the experience and interest in your profession lent a lot to our business education.

    The ethical practices of Toyota are something that is very important to Toyota. I read further after reading here and found more about how socially conscientious they are on a global scale. In May 2013, for example, Toyota Europe held their annual Ichiban Event in Greece as a “show of support” for the country through the financial crisis going on there. They had many visitors and attendees to the event. The luxurious occasion could have been hosted in a number of countries in their European market reach but even here remains conscientious.

    Additionally, you look at Toyota’s products and again find a global responsibility. Green initiatives are probably the most important in the automotive industry, not only on an environmental imperative but also for the financial benefit of its customers. Their hybrids now account for 14% of their profits according to Conference & Incentive Travel Magazine (2013), a number which is nothing to scoff at. While companies like Tesla are finally getting the wheels turning, Toyota was on the forefront and among those to lay the groundwork for the sake of customer, community, and environment.

    While there is of course financial benefit in such things for Toyota, it is only through good intent that such benefits occur. Toyota, as you have pointed out, is a great example of how corporations do not have to be these looming, powerful, wicked entities, but instead be beacons for the betterment of communities and societies; and it all starts with the corporate culture.

    Toyota events drive sales. (2013). Conference & Incentive Travel, 12-13

    • Hi Rhett,
      Thank you very much for your thoughtful comment. As you noted, issues on energy, global warming, and a low carbon society are aimed at in this area of Toyota sustainability. The first mass-produced Prius was introduced in 1997. 15 years later in 2012, Toyota recorded the cumulative sales of hybrid electric cars exceeding 4 millions sold in 80 countries.

      Obviously it’s not feasible for a company to solve all social issues. As we learn from other examples as AT&T, Norfolk Southern, or Chevron, many other companies can utilize their expertise in their industries to promote sustainability activities aligned with their business objectives.

  17. Ms. Chapman,
    Thank you very much for taking the time to speak with our class Monday night. It was a great presentation. I did not realize Shoichiro Toyoda had donated to help build the Howard H. Baker Jr. Center at the University of Tennessee, or how Denso had donated to the community. I am certain you are very proud to be associated with and work for such a giving corporation. What great examples of social responsibility. In our text Collins states, “Being socially responsible also benefits marketing and customer relations” (2012). In creating a better community – you will gain loyalty and increase awareness of the Denso brand. It really is a win-win.

    The company for which I work is a global engineering firm with more than 200 offices in over 25 countries and over 60,000 employees. My example would be sustainability. We work with our clients to reduce our environmental footprint – in design approaches that provide cost-effective, sustainable solutions, streamline work processes, and the list goes on. This is passionately driven by our President and CEO who states, “Sustainability is not just good for business; it’s good for all of us.”

    With locations all over the world we also support our communities by volunteering, fund raising, and supporting local events. We also engage in recycling programs, waste management, reduction in lighting, and education (to name a few) at our own offices.

    Thank you again for your time.

    Collins, D. (2012). Business ethics: How to design and manage ethical organizations. Hoboken, NJ: Wiley

    • Hi Denise,
      It’s so nice to hear that the large, global scale of your engineering company has been seriously taking actions for sustainability. As your President & CEO states, “it’s good for all of us.” You should be proud of what your company contributes to the society!!

  18. I work in the healthcare industry and community responsibility is a huge part of our training. We are held to a standard that we are to donate hours to our community here in Knoxville or elsewhere that we feel our talents are needed.

    There was recently a group of doctors, nurses and anesthesia specialists who went to Africa to help in their healthcare dilemma. The hospital sponsored their airline tickets and medical needs. We as associates donated clothes, personal products and toys as our part in the effort to help the less fortunate.

    The Radiology Dept. that I work in race in the KARM Dragon boat race every year to raise money for KARM in the Knoxville area. As a matter of fact when we go for our annual review every year one of the stipulations to getting a raise is if you donated your time.

    Boccalandro states that there are several reasons to have your company and it’s employees involved in the community:
    1. 45% of employees who have volunteered with their company or co-workers report that they are very satisfied with their jobs, compared to 30% who haven’t.
    2.In a survey of professional women, 83% reported that volunteering developed leadership skills, 78% reported that it developed communication skills, and more than half reported development in other workplace skills.
    3.Several companies have found statistically significant correlations between employee community engagement participation and employee retention.

    So volunteering is a win , win situation for both employers and the community they work in.

    Boccalandro, B. (2012, March). 19 Compelling Business reasons for corporate community involvement . In Business4Better. Retrieved February 1, 2014, from http://www.business4better.org

    • Hi Beth,
      Thank you so much for sharing the interesting research on the benefits by employees getting involved in the community work. Yes, I totally agree with you that “volunteering is a win, win situation for both employers and the community they work in!”

  19. Thank you Ms. Chapman for joining our class. As I mentioned to you, I know several people who work for Denso in various capacities. I found your presentation very interesting and informative. Social responsibility for corporations has been gaining more and more ground over the years as we all know. It almost seems that a company cannot function without some sort of community action attached to it. 2007 saw a different approach to corporate responsibility take shape that I find fascinating…competitors in markets joining forces with activist groups, government entities, and academics to address social and environmental issues (Baue, 2007). For example, in 2006 the Automotive Industry Action Group (AIAG) announced a collaborative project on responsible supply chain management that included Ford, GM, Chrysler, and Honda (Baue, 2007). To help facilitate it, the US State Department granted them $185,000. Other collaborative efforts have been seen in major retailers to globalize an ethics compliance program (Baue, 2007). It seems that, competition aside, all large corporations are joining forces to combat arising social and environmental concerns.

    Baue, B. (2007). “From competition to cooperation:Comapnies collaborate on social and environmental issues”. retrieved from http://www.socialfunds.com/news

    • Hi Clay,
      I appreciate that you brought up the discussion on the automotive supply chain management by AIAG. I’m very familiar that the AIAG has been helping suppliers with the returnable container system. Yes, I absolutely agree the “collaboration” is a key factor to improve social, ethical, or environmental issues; governments and companies, employees and communities, or supplies and customers.

  20. First of all thank you Ms. Chapman for presenting to our class, it was a pleasure to see a woman in business rise to the ranks and give us some height to the ceiling for the future of the rest of us business woman to follow you. I agree that Denso is a great leader in strides in ethics and dynamics in the Business world both stateside and around the world. Having worked at Denso before, I understand the standards that they expect from their employees and what the quantity that they need to put out to compete with the competitors in the business. In engaging and empowering ethical employees Denso definitely strives to do this from the hiring process, training, and online and continual with the Kaizen training monthly. In the Kaizen training and competition the teams strive to find areas that can assist the line in produce a better time, efficiency, and improve costs for the company as a whole. This alone allows the team work together and then allows the team to be recognized in the plant and then compete in the United States and then internationally. Great job again for your presentation, keep moving strides onward and upward.
    CHAKRAVORTY, S. S., & FRANZA, R. M. (2012). KAIZEN BLITZ. Industrial Engineer: IE, 44(4), 28-33.

  21. Ms.Chapman

    Thankyou for your presentation at our class. I found it very interesting and insightful as to see how a big well known corporation like Toyota implements strategies for upholding their corporate responsibilities to the communities they serve and their employees while still being able to protect their own interest in improving and maintaining the company. From what I have observed, there are not many corporations that show the effort in addressing concerns for their environment, employees, and consumers like what Toyota does. Typically large corporations only focus their efforts on being competitive and serving the best interest of profitability. With what you presented Toyota should serve as a model for all large corporations who are successful enough to have a significant impact on the society they serve. Toyota would serve as a good model for the support of a movement known as “conscious capitalism” which has a goal that “one day, every business will operate with a sense of higher purpose, integrate the interest of all stake holders, elevate conscious leaders, and build a culture of trust, accountability, and caring.” (Connor, 2013)
    Connor, M. (2013). John Mackey’s ‘Conscious Capitalism’: ‘Simply A Better Way to Do Business’. Business Ethics.com
    Retrieved from: http://business-ethics.com/2013/01/27/1154-john-mackeys-conscious-capitalism-simply-a-better-way-to-do-business/

  22. To me, a great corporate example of a company with social responsibility at its core and as one of its main focus is TOMS, the shoe company. This company started out selling shoes for men, women, and children, and, for each pair sold, a pair is given to a child in need. TOMS refers to this as their “One For One Movement.” In 2011, TOMS introduced their line of sunglasses. Following their thought process and standard with their shoe line, for each pair of sunglasses purchased, TOMS provides help to an individual (or individuals) in need of eyeglasses or eye surgery in order to see.

    Companies with a high level of social responsibility can appear to consumers as having more compassion and care for its customers, which, in turn, can create value for the company and increase the number of potential customers, customers, repeat customers, and referrers.

    http://www.toms.com/our-movement/

  23. Thanks for the post! It is always good to see business leaders and large companies re-investing into the people. This is not only an investment for a better future, but also an investment in the overall reputation of the company. Consumers get so used to seeing big cardboard checks written by donors of large companies presented at sports games that it almost becomes mundane. That is why it was great to read the story of Mr. Toyoda and how his generous donation came about. It is good to see he made a contribution to something that genuinely had an impact on him.

  24. I worked for a large healthcare system in New Orleans, LA. While this company had employed me for 15 years, it was not until after Hurricane Katrina did I understand the role that it played within the community. It had been involved in many community outreach activities through the years, and all of that was important in giving back and creating a healthier population. However, following Katrina, the organization felt it important to embark in a “hand’s on” approach to helping fellow employees. Many employees lost everything as a result of Katrina and our company wanted to help as many as possible. To see the leadership in our organization step up was inspiring and offered hope to many. While my family suffered some destruction of our home because of Katrina, we felt motivated to follow the lead of our organization and participate in the program. It allowed us to see beyond our own loss to help those in even greater need. According to Bejou (2011), corporations have a responsibility to humanity, just as other organizations, such as government and nonprofits, do. (pg. 6).

    Bejou, D. (2011). Compassion as the new philosophy of business. Journal Of Relationship Marketing, 10(1), 1-6.


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