Corporate responsibility in AB Sugar

Corporate responsibility in AB Sugar

Introduction

Corporate responsibility is a business model that guides a company into being socially accountable to all its shareholders both in the internal and external business environment. These stakeholders include the stakeholders, the community, and itself at large.  Corporate responsibility also includes how the company interacts with its environment. Some companies think that merely donating money to charity is enough, which is not. Corporate responsibility is about ensuring everyone is responsible and working towards earning the trust stakeholders as well as meeting their expectations in an ethical and accountable manner. AB Sugar is one of the world’s leaders in the sugar business and supplies both sugar and non-sugar products. These non-sugar products include animal feeds, landscaping products and soil conditioning products. This paper will analyze corporate sustainability and the context in which it is implemented in AB Sugar.

Six core characteristics of CSR

CSR has six core characteristics. These include voluntary, managing externalities, multiple stakeholder orientation, the orientation of both social and economic responsibilities, practices and values, and beyond philanthropy.

Voluntary

Scholars describe CSR as the activities that the company indulges in that is discretional and go beyond what the government expects of the company. The element of voluntary is emphasized by regulators and other stakeholders. Many companies worldwide have recognized the importance of undertaking responsibilities beyond the legal minimum. However, critics of CSR view the element of voluntarism as a disadvantage to the company because it should focus on maximizing the shareholders’ benefits, which voluntarism doesn’t seem to add. Regardless, voluntarism is advantageous to the company because it can improve the company’s culture. It gives the company’s identity and encourages staff to work together. It is also a good marketing strategy and strengthens the brand image.  AB sugar recognizes this element. It supports the people who work for it through fundraising and training them on skills to produce better sugarcane. It also operates a program that allocates funds for its suppliers. It also participates in great fundraising for both local and national charities.

Managing externalities

Managing internalities refers to managing all the factors that affect the stakeholders, but they cannot be directly addressed in the decision making process. Externalities include environmental factors, regulations, employee rights, etc. ecological factors are regarded as externality since they affect the production process affects the community’s environment. Companies are expected to abide by the regulatory by practising sustainability and avoidance of pollution. In every country, all employees are entitled to their rights such as the right to sick offs, fair wages,  free from discrimination, safe workplace, etc. when it comes to environmental consciousness. AB sugar is doing a good job. AB Sugar defines its three pillars of sustainability as economic, social, and ecological. The firm has helped reduce 11% of greenhouse gas emission. Also, it has cut off its eater use by 13%. AB sugar in china established a sustainable agriculture programme which educates farmers on how to improve crop yield through the use of less land and water to avoid construction of many plantations that have led to destroying of habitats. Reduction of irrigation practices allows the company to reduce the use of excess chemicals and avoidance of pollution as well. AB Sugar takes the welfare of its employees seriously. It emphasizes on highlighting the challenges that employees face and where to seek support. It also has a zero reliance policy to modern slavery and land rights. It is conscious of employment laws and also protects its vendors as well. It makes it its responsibility to educate consumers on sugar and health. It runs a making sense of sugar campaign which explains the role of sugar in the diet and the extents to which sugar is dangerous.

Multiple stakeholder orientation

Stakeholders in a company range from internal stakeholders to external stakeholders. These include employees, shareholders, customers, regulatory, political leaders, vendors, and community. Understanding stakeholder orientation allows a company to identify and prioritize stakeholders. Companies have different stakeholders and each influence the company differently. Stakeholder prioritization enables a company to pinpoint the stakeholder with the most power and interest and address their needs accordingly. The AB Sugar puts efforts in managing its stakeholders and ensuring that their needs are met accordingly. It is supportive of smallholder farmers by offering them funds so that they can make their crops better. It helps them understand their land rights and obtain legal documents. It takes care of its employees by giving them the right working conditions and rewarding them to motivate them. AB Sugar implements strategies to manage its stakeholders, for instance, through communication, stakeholder research, collective bargaining, considering their interests and expectations and fulfilling them in accordance.

Alignment of social and economic responsibilities

A company has to be able to balance between social obligations and economic responsibilities. The company has an economic responsibility of ensuring it generates enough profit to satisfy its stakeholder’s interests and still support its operations. All the social responsibilities should directly or indirectly benefit the company. AB sugar implements this concept. It funds local farmers to better their crops it coordinates with the farmers in the production of sugar using efficient and responsible means, hence improving yields and developing strong and productive years. This way, it is able to generate profits and shareholders’ interests are satisfied.

Practices and values

CSR entails the business practices and strategies that guide the company into solving social issues. CSR is guided by a set of values that lays a foundation for these practices. Company values are the fundamental beliefs which determine the behavior employees. These beliefs are used to manage internal affairs as well as the relationship with customers. Practices and values also determine the success of a company and also enables it to associate with stakeholders and customers appropriately. AB Sugar is guided by five major values which are integrity, accountability, diligence and discipline.

Beyond philanthropy

In some parts of the globe, CSR is based on philanthropy. I.e. corporate responsibility towards the general public.  CSR is considered a mandatory practice supported by the regulatory. Intentions standards are shifting from altruistic to strategic CSR because the impacts have been sent to be profitable to the environment, the community and the company itself CSR extends beyond philanthropy because of its ability to satisfy stakeholder expectations and achieving the company’s objectives. AB sugar has been able to successfully implement CSR effectively to satisfy the company’s and stakeholders needs as well.

Theoretical concepts of CSR

Classical view theory

This theory considers CSR a disadvantage to the community. It is a traditional perspective, where a company avoids CSR activities in order to maximize stakeholders profits. This theory was introduced by Friendman in 1970, who stated that “the responsibility of business is to maximize profits, earn good returns on capital invested and be corporate citizenship obeying the law no more no less.” The ideology behind this theory is that by practising CSR, the company exceeds its expectations and involves accomplishing tasks with someone’s money, tasks that they may not even agree with.  This ideology is mainly used in the capitalist economic system where the companies are only concerned with maximizing their profits by indulging in activities that are within the set limits. Ideologist of this theory reasoned that the company should do its best and try to survive through competitive strategies while social welfare is the responsibilities of the company. Companies that avoid practising CSR since they reason that there are hardly any benefits derived from this practice. Moreover, maintaining the environment calls for extra costs, which the company has to incur. The company ends up being disadvantaged. This is contrary to what AB sugar believes in. The company believes in practising sustainability. It is able to save costs such as the cost of water bills. It also believes in supporting its farmers who will, in return, offer quality raw material for its products. It advocates for the light against global warming and has managed to cut down its emissions by 11%.

Stakeholder theory

The stakeholder theory addresses the relationship between the business and the stakeholders involved in achieving the company’s goals. A stakeholder is any individual or group that influences or affected by the company’ s decisions in one way or another. Stakeholders can be classified into two groups: primary and secondary stakeholders. The primary stakeholders are those who directly influence the organization. They determine the survival of the company. The organization direly relies on their participation to keep thriving. This theory reasons that a company can only thrive if it satisfies the shareholders’ interests. Secondary stakeholders influence the company’s decisions indirectly, and the company’s success does not necessarily rely on their participation. The theory is further broken down into three segments: descriptive, instrumental, and normative. The descriptive sub theory states that communication with stakeholders determines corporate success. Instrumental sub theory explains the relationship between stakeholders and corporate performance. Normative sub theory explains the importance of treating stakeholders right. According to this theory, the performance os a company is measured by how well it is able to satisfy each of the stakeholder’s interests. AB Sugar, therefore, follows this theory. The company puts its stakeholder’s needs into consideration. It supports its vendors with training and funds. It strives to provide its customers with the best products. It makes an effort of raising awareness of the importance of sugar in the diet, and to the extent, it is not healthy. The company also involves its stakeholders all over the world in making decisions that affect its operations. Through communication and stakeholder prioritization, the company has achieved in stakeholder involvement and thus accomplished stakeholder management.

Instrumental theory

The instrumental theory is the opposite of classical view theory. the perspective behind this theory is that CSR is crucial to the success of a business. The theory emphasizes on the company exploiting CSR to succeed. It claims that CSR practices can be linked with profit maximization for the benefit of stakeholders. The company using this theory makes CSR on o its strategies and also influence its decisions. Through CSR, the commitment is able to increase its reputation, build its brand, which translates to wealth maximization. Hence the ideology behind the instrumental theory is that CSR is directly linked to the performance of the company. AB Sugar can be said to follow this theory as well. Social responsibility is one of the strategies that the company uses to strengthen its brand reputation. The company is involved in charity events in support of the local farmers. The company is reputable for being environmentally conscious. Through its responsibility towards the environment meant and to the stakeholders as well, it has managed to be one og the leading sugar providers along with the world.

Strategic approaches used by AB Sugar in fulfilling community responsibilities

AB Sugar has gone an extra mile just to fulfil community responsibilities. It believes that a thriving and healthy community is the foundation of the company. It is respectful of human rights and strives to offer high standards in health, safety, and education. It is committed to providing access to health services to its employees by issuing health insurance and advocating for a healthy lifestyle. One prevailing priority in the company is the eradication of modern slavery. The company acknowledges the challenges facing human rights internationally and seeks to address them by embracing a zero-tolerance policy against modern slavery and land rights. It has helped many farmers understand their land rights and acquire a legal document of ownership. The company also conducts education on health and sugar to its consumers. This program, making sense of sugar aims at educating the consumers on the healthy and unhealthy consumption of sugar. It has also been involved in turning bare lands into farms that are beneficial to the community. also it conducts food teaching courses for primary school teachers.

Recommendations for AB SUGAR

Ecological responsibilities

Even if AB Sugar practices sustainability and social responsibility, there is much more that it can do to improve the environment. The company could cut on water use by recycling water when possible.  Waste management should also be a priority, compost waste is used to produce manure or molasses, and no biodegradable waste is recycled instead of dumping it on lands or river sources. Shifting from use of fuel energy to renewable energy will enable the company to cut down on carbon emissions. It can reduce its carbon print by monitoring carbon emissions from the production process as well as the chain supply. AB Sugar can play a part in protecting the environment by funding conservation programs as well. The use of environmentally friendly packaging instead of using no biodegradable packaging will reduce the chances of pollution.

Social welfare

Social welfare can be established by analyzing the current consumer trends and producing products that will suit the current needs. For instance, many scientists are advocating for low sugar intake as well as

Enhancing CSR Strategy in regards to recruitment and retention of employees

Employee retention is achieved by strengthening the bond between the company and the employees. Employee loyalty can be achieved by respecting their rights as employees. This includes paying them on time; issuing sick offs, maternity/paternity leaves, bonuses etc.