Journal 8: Corporate Social Responsibility

In the last session I gain a deeper appreciation of what CSR really meant. I used to think that CSR are mere marketing campaigns of companies to boost good impressions about them in the business community. I've been part of a group of companies wellness team, was part of the "Run for the Pasig River" campaign, been a member of a group of company who has its own foundation. However, I did not really know what everything is for.

What really is CSR?

Traditionally, CSR has been defined much more in terms of a philanphropic model. Companies make profits, unhindered except by fulfilling their duty to pay taxes. Then they donate a certain share of the profits to charitable causes. It is seen as tainting the act for the company to receive any benefit from the giving.

I have read numerous definitions but I think the European CSR model has the most in-dept explanation of what CSR means. The European model is much more focused on operating the core business in a socially responsible way, complemented by investment in communities for solid business case reasons. Personally, I believe this model is more sustainable because:

Social responsibility becomes an integral part of the wealth creation process - which if managed properly should enhance the competitiveness of business and maximize the value of wealth creation to society.

When times get hard, there is the incentive to practice CSR more and better - if it is a philanphropic exercise which is peripheral to the main business, it will always be the first thing to go when push comes to shove.

But as with any process based on the collective activities of communities of human beings (as companies are) there is no 'one size fits all'. In different countries, there will be different priorities, and values ​​that will shape how business act. And even the above observations are changing over time. The US has growing numbers of people looking towards core business issues.

For instance, the CSR definition used by Business for Social Responsibility is:

·         Operating a business in a manner that meets or exceeds the ethical, legal, commercial and public expectations that society has of business.  On the other hand, the European Commission hedges its bets with two definitions wrapped into one:   A concept whereby companies decide voluntarily to contribute to a better society and a cleaner environment. A concept whereby companies integrate social and environmental concerns in their business operations and in their interaction with their stakeholders on a voluntary basis.

Reference: http://www.mallenbaker.net/csr

We have also discussed CSR models, outlined the model of how companies conduct business. The first is Carroll's Pyramid of Corporate Social Responsibility.

Economic responsibility in Carroll's CSR Pyramid: It concerns the responsibility of the business of producing goods and services needed by society and making a profit selling them. Novak (1996) has contributed to this by defining seven responsibilities of companies. Companies have shareholders who demand a reasonable return on their investments, they have employees who want safe and fairly paid jobs, and they have customers who demand good quality products at a fair price. So, here comes the first responsibility of the business as it is to be a properly functioning economic unit and stay in business. And this is the bottom of the pyramid, where all the other layers rest on.

Legal responsibility in Carroll's CSR Pyramid: the legal responsibility of corporations demands that businesses abide by the law and play by the rules of the game. Should companies choose to "bend" or even ignore their legal responsibilities the price can be very high for the business. And the US software giant Microsoft has faced a long-running antitrust case in Europe for abusing its monopolistic position to disadvantage its competitors which resulted in settlements tough against the company.

Ethical Responsibility in Carroll's CSR Pyramid: The main concept of ethical responsibility as defined and expressed by Carroll (1991) is that the ethical responsibility consists of what is generally expected by society over and above economic and legal expectations. Ethical responsibilities of companies cover its wide range of responsibilities. Ethical responsibilities are not necessarily imposed by law, but they are expected from ethical companies by the public and governments and this case was seen in the example of Shell, where the decision of the government was reversed for disposing of oil platforms after a campaign and disagreement by the society and public.

Philanthropic responsibility in Carroll's CSR Pyramid , as it is in the top of the pyramid, it focuses on more luxurious things such as improving the quality of life of employees, local communities and ultimately society in general. Some points of the philanthropic responsibilities of the business can be controversial and requires separate studies aimed to it. For example, who should decide on what cause to spend the money, how much, and on what basis these decisions should be made.

Comparatively recent theories concerning our firm's social responsibility is "Theory of the Firm / strategic leadership theory" which was proposed by Waldman et al (2004). The theory states that some aspects of CEO leadership can have a direct effect on the inclination of firms to engage in CSR and companies which are run by intellectually stimulating CEOs do engage in strategic CSR more than average companies.

Reference:

Waldman, D, Siegel, D & Javidan, M, 2004, "CEO Transformational Leadership and Corporate Social Responsibility", Working Paper, Rensselaer Polytechnic Institute

And then the, CSR Pyramid 2.0

In this model, the company incorporates CSR in all of its processes. Philanthropy is now placed at the bottom of the pyramid. Since risk management and strategic CSR is a priority and placed on top. An example of this is the strategic CSR model that incorporates Nestle in one of its bestselling product in the Philippines which is Nescafe. They provide education, training and support to coffee bean farmers and their families in a way that also helps the company.

As a future business leader, now I have this idea of ​​how I will manage the business in the future. I plan to go beyond gaining profit but I will manage the business in terms that it will have an impact and contribution to the society.

 Journal 7:  ANALYSIS ON THE FORD-FIRESTONE CASE: TIRE RECALL

My group was asked to do an analysis on the ford-firestone case. Its kind of hard again for us to create an analysis like this since we are all now focused on our finance and accounting subject and grew past our management principles knowledge. But its good to refresh our minds with all the frameworks again and come up with decisions analysis and learning points. We finished almost 1 am doing this paper.

CASE BACKGROUND:

•200 deaths in the US due to cars rolling over

•60 deaths in Venezuela

•14 deaths in Saudi Arabia

•Tread separation a possible cause of the cars to rolling over

HISTORY OF THE TWO COMPANIES

•Partners dating back to 1895

•First contract established in 1906

•Martha Firestone, Harvey’s granddaughter, married William Clay Ford, Ford’s grandson

THE BLAME GAME – FIRESTONE

•In 2001, Firestone issued a report blaming the Explores design for all of the accidents

•Any tread separation would have caused the accident

•The tread separation claims occurred ten times more frequently on Ford’s Explorer than on Ford’s Ranger, a pickup

THE BLAME GAME – FORD

•In 2001, Ford gave the NHTSA a report blaming Firestone for manufacturing flaws

•The Explorer had ranked among the top in terms of safety among the 12 SUVs tested for 10 years

•For the much of the time the Explorer ranked high in safety, Goodyear tires were used

•Rangers are taken on long distance trip where the tires could get too hot

WHO IS AT FAULT?

•Ford recommended a low inflation level for the tires, which causes greater heat build up

•Ford chose to use grade C Firestone tires instead of more heat resistant tires such as grade B

•Firestone had been linked to tire failure, most manufactured from a plant in Illinois

DRIVERS AT FAULT?

•Not being aware of their tires inflation levels

•Driving too fast over long periods of time

•Not knowing how to handle tire blowouts

THE CONSEQUENCES

•Ford reported it would triple its initial recall, costing over $2.8 billion

•In 2001, Ford Explorer sales decreased dramatically

•Ford reported its first loss in operations since 1992

•Firestone’s earnings dropped 80 percent in 2000

•A net loss $510 million, largely due to $750 million in legal expenses

STATEMENT OF THE PROBLEM

How should Ford and Firestone address bad reputation and decline in profits while ensuring customers safety in every car they sell?

OBJECTIVES

•For Ford to create a supply chain management

•For Firestone and Ford to test tires and model designs on actual car models not mules

•Increase ethical considerations before releasing products

PEST ANALYSIS

PORTER'S FIVE FORCES ANALYSIS

SWOT ANALYSIS

ALTERNATIVE COURSES OF ACTIONS

1. Review and change current end to end process of supply change management

•PROS- close monitoring of quality assurance and internal auditing will minimizes production errors and increase product quality.

•CONS- more costly on the part of the company

2. Test actual car models and tires prior to release in the market

•PROS- tests insures improvements on defective products and ensures safety to consumers

•CONS- more costly and time consuming on the part of the company

3. Follow standard ethical principles and considerations as a core value of both companies 

•Utilitarianism- continues to practice an action or decision that is the only right one to perform for the benefits of the stakeholders over the total consequences and cost implications in the company (Review and change current end to end process of supply change management & Test actual car models and tires prior to release in the market).

•Rights- both companies must comply to all basic rights of every individual based on ethics system primarily the rights to live, thus respecting every individual’s rights that can be legal in nature, or pertain to human rights or moral rights (Simply the liberty to own a car without compromising safety of the consumers).

•Justice and Fairness - Continues to find immediate solution to problems for the benefits of the consumers and offer each person what he or she deserves by giving them practical options based on their desires and requirements.

RECOMMENDATION:

For Ford and Firestone:

•The recommendation of the group is to strengthen model unit tests, quality assurance and internal auditing of end to end manufacturing and retail process.

•Follow standard ethical considerations defined in the ACA.

•Be responsible and replace defective products.

For Government

•Pass standard bills with regard to quality of products because it affects public interest.

•Be proactive in investigating causes of accidents even if it is small in number.

•Closely monitor companies’ compliance to standard process and specifications set.

•Innovate process and product.

ACTION PLAN:

•Create a value chain management

•Thorough product testing

•Create an internal audit team

•Create a quality assurance team

•Thoroughly investigate suspicions and complaints on safety

•Strengthen and support crisis management team

•Be proactive in the after sales process of products to maintain good reputation to consumers

•For government regulating body to actively regulate

LEARNING POINTS:

•Complacency and reluctance to standard procedures in the business process may directly affect a company’s performance and market share.

•Businesses must ensure law abidance and guard against liability suits.

•If you don’t do it for ethical or moral reasons do it because it make good business sense

Journal 6: Ethical Principles in Business

·         Is it a contradiction in terms?

·         Is there an inherent conflict between ethics and the pursuit of profit?

·         Do you always choose profit over ethics?

·         What is ethics?

·         Is good ethics good in business?

These are the questions posted to the class prior to our discussion of the topic. Ethical principles in business is a really interesting topic, all things that was shared to us in this course would really aid us as aspiring business leaders of the country.

Let’s define ethics first, as I remember in our discussion. Being ethical means that if you are a businessman it comprises:

1.     You are doing what your conscience tells you

2.     You are doing what the church or bible says

3.     You conform to the golden rule

Business ethics is the normative study of moral standards as they apply to business policies, institutions and behavior.

The usual business person always thinks about the ROI = return of investment in every aspect, but if the profit is the only consideration he might forget considering standard also for the safety and wellness of his stakeholders. Profit and ethics interfere with each other however there are also cases where in this can both work harmoniously with each other.

I used to be part of a company that has strong “RED” and inconsiderate culture. Typical of a local bank own by Chinese, they don’t trust employees with anything. I remember always receiving reports with red notes, memos without prior consideration, and an overwhelming bulk of work any person even the most hard working ones would not be able to tolerate. After a year of working for them, I really lost a lot of weight, I remember going home as late as 11 pm and reporting as early as 7 am, I was so demotivated and working conditions is intolerable as well. The whole team resigned, I am still friend with my previous colleagues and whenever we talk we still share the same feelings that we had with our previous employer. We just all hope they still have good business as we are now pursuing our own paths.

I was employed after to a “BLUE” cultured company. This is what our CEO always say:

In AXA, we have put it as our priority to be that employer that is attractive for employees who perform, who want to develop themselves by working in collaborative teams and who want to improve their skills by learning. (Rien Hermans, President & CEO)

AXA’s Cultural Analysis

Based on my experience working with AXA for the past 1 year, I deemed the culture as high in adhocracy and market, moderately high in clan and low in hierarchy. High in adhocracy, for the company believes in its employee’s talents and creativity. We work in a very flexible time schedule; our productivity is not based on how long we stay in the office or how busy we are. It is measured by how we perform and how we are able to hit our key performance index. The management supports every ideas and innovative initiatives of its employees. They believe in fast changing environment and pioneered changes in the country’s insurance industry. AXA is the first insurance company who formed a formidable synergy with banks, which is Metrobank and PSbank. It introduced bancassurance in the country. It is also the first in the industry to use systemized online assessment tool named as the e-FNA or the electronic financial needs analysis. It supported the need for online systems and reduced the use of paper for documentation, the company currently uses online tools to cater the needs of the departments and support teams such as MyAXABudget, Learning Management System, AXA Click, AXA pass, Epayslip, HR Teamware, activity management system, online IT helpdesk and many more. It is the first insurance company who used an online empowered and efficient tool for its sales team. Which makes every transaction fast and mobile, the financial executives has their own laptops and tablets for faster communication and costumer needs analysis.

It is high in market for AXA is very aggressive in pioneering almost all innovative systems in the insurance industry. AXA started its business in the Philippines in year 2000 and it is currently the #3 (number three) among top all insurance companies in the country given that it is only 13 years in existence here in the Philippines. AXA is very determined to give its costumers every need by customizing its policies in accordance to costumers need. AXA Philippines is redefining the market by challenging the present and always looking for solutions that better meet the financial needs of our customers or modify services to adjust to their changing preferences. This quest made us the innovator behind the development of bancassurance and behind the introduction of variable life products into the market. Currently AXA Philippines is offering financial security to almost 500,000 individuals through its group and individual life insurance products. As the pioneer in the market, AXA Philippines is offering the second generation variable life products, that provide the clients even better financial security and improved returns.   AXA Philippines has a nationwide coverage through 600 Metrobank branches, which are being serviced by 470 financial executives and 28 AXA branch offices that are the home to its growing network of 1,750 exclusive financial advisors.  AXA’s strategic focus is global, aimed at developing a single worldwide brand, being powerful in every one of its markets and developing synergies across the Group. The AXA Group is committed to international expansion and has already established a strong presence in the Asia-Pacific Region, maximizing opportunities for future growth. At present, AXA had over 102 million customers worldwide, 163,000 employees and exclusive distributors, 1 trillion Euros in assets under management, and 4.3 billion Euros in underlying earnings.

It is moderately high in clan for we treat each other as family. Since blue culture has been introduced, the leaders and management placed the culture of trust and achievement into practice. Lastly, it is low in hierarchy for the management discourages a non-pro employee culture. Every employee has the right to report any cases of its managers who are not following the blue culture as stipulated by AXA Global.

Since I came from a very red culture based company prior to working with AXA. Its culture is very forceful, disciplined and does not show any trust on its employees and stakeholders. When AXA offered me a position for their company, they introduced the blue culture which established my interest to joining the company. Now that I am part of AXA, I take pride with its culture and adhere to its core values. I firmly believe in the company’s noble purpose of serving its customers. I’ve been offered positions from other companies like Phillip Morris and San Miguel after joining AXA, but because of AXA’s sense of purpose I decided to stay. It is still more rewarding to work for a company that take care of people’s needs and helps the community. The success of AXA for me is very well deserved, Ive never been this happy for working for a certain company. They do not only take care of their clients but they do take care of their stakeholders’ as well and they carry on a very noble purpose of doing business. Upon discussion of the environment and organizational culture in management principles class, I had the chance to assess and foresee my own company’s culture. Not just the culture but I’ve learned to see every company during our discussion in a more objective manner. I am looking forward to learn more as I go through my upcoming business subjects.

A CULTURE OF TRUST AND ACHIEVEMENT

AXA started using OCI Developed by Human Synergistics, the OCI is recognized as one of the most widely used and thoroughly researched organizational surveys in the world. According to OCI, there are three types of company culture:

In March 2008, AXA first used the Ideal OCI among AXA Partners  to define AXA’s “preferred” culture. An Ideal OCI was completed by a wider group of senior executives (300) in July 2010 to validate the 2008 results as well as to reflect the opinions of a more diversified group within AXA. Results from both Ideal OCI surveys show a predominantly Constructive or BLUE culture, which is in line with global high performance companies.

After setting the ideal BLUE culture through OCI and surveys , AXA Global came up with action plans and designed three main drivers for change.

By building a culture of trust and achievement, we will empower and further engage our people to be customer-centric, optimize the value of our businesses and accelerate growth while reaping together the benefits of being global. Our aim is to foster a safer and stronger society over the long term.

AXA Group believed that Leadership development creates an impulse for culture change

With the good culture imposed by the company management AXA and its stake holders achieved the following:

·         Global leader in financial protection

·         Recognized as the Best Global Insurance Brand by Interbrand (the world’s leading brand consultancy) based on financial performance, the role of the brand and brand strength.

·         #39 of the world’s biggest companies global 2000 list according to Forbes

·         The Group supports its clients, both individuals and businesses, at every stage in their lives by providing products and services to meet their needs, including insurance, personal protection, savings and wealth management

·         more than 102 million clients

·         163,000 employees and exclusive distributors

·         Headquartered in Paris and active across all five continents in 61 countries, AXA is focused on the world’s major markets, in particular Europe, North America and the fast-growing economies in Asia Pacific.

·         1 trillion Euros in assets under management, and 4.3 billion Euros in underlying earnings.

If I would doing business in the future, I believe that this should also be applied. Ive learned from experience and I will also apply the Lasallian Way of conducting business.

Journal 5: Suze Orman's Laws of Money and Lessons of Life

As a trainer in the financial industry, I can definitely relate to Suze Orman's talks. Although I do not agree to some of it at least she's financially education people and telling them to invest wisely and not to keep their finances stagnant. The following are the main points / laws she discussed in her talk.

The first law is: Truth Creates Money, Lies Destroy It.

I agree to this, people should not be investing or buying things that other people just tell them to. They should also do their own research and take into consideration a lot of factors in to make a sound decision they would not regret later.

The second law is: You've got to look at what you have, not at what you had.

I also agree to this, former investments are not always as reliable as it has been in the past. Considering the rising inflation rate and the volatility of investments in the market, also has its timing. Also, stop holding unto investments you had in the past that are not working for you and has already fluctuated move on to the next and diversify your investments.

The third law is: You have to do what is right for you, before you do what is right for your money.

Suze Orman explains that we need to establish or set aside at least 8 months' worth of salary for our emergency fund. I like the logic behind this. If let's say we get sick or lose our job, this eight month emergency fund would support us until we get back on our feet or find a new job. After squandering our money on "investments", we need first to have some real, tangible money set aside for ourselves.

The fourth law is: You must first invest in known before the unknown.

Knowing the investment market or the company and its stakeholders background is also important before investing, unless you want to bask yourself to risks.

The fifth law and the last is: You have to remember that money has no power of its own.

This is absolutely true. Money is not going to spend itself. There's also no need to buy lavish things you can not afford to impress people you do not really like. In the end, we are the ones in control of our money. We are the ones who consent to placing our money on this, lending it or giving it away.

I think Suze Orman is a great and inspirational speaker. She talks, looks, and sounds like she really take a lot of things into consideration. I hope more people would be like her, who would stand upfront to educate and share her knowledge to those who needs it. 

Journal 4: Career and Life Plan

Ensign 

Inspired by the Ensign "a compass" found in the Book of Mormon, God as the following guidance for directions to go to Israel.  This is an attempt to create a 25 year Life Plan to guide my decisions and visualize concrete future goals foregoing and horizon not just as a business leader but as a child of God magnifying my mission and reason for being.

"A man filled with the love of God, is not content with blessing his family alone, but ranges through the whole world, anxious to bless the whole human race"

Joseph Smith

Personal Vision Statement

I am a daughter of God and came with the birthright something that is beautiful and divine, I know this deep into my soul.

As CS Lewis said: "It is a serious thing to live in a society of possible gods and goddesses, to remember that the dullest and most uninteresting person you can talk to may one day be a creature which, if you saw it now, you would be strongly tempted to worship.  ... There are no ordinary people.  ... Your neighbor is the holiest object presented to your senses "(" The Weight of Glory, "in Screwtape Proposes a Toast and Other Pieces [1974], 109-10).

Personal Mission Statement

As a covenant child, I will serve the Lord and keep his commandments.  And I will magnify my mission and my callings as a business leader, influence organizations and institutions' culture, foster help for the needy, continuously bless and serve my fellow in the Christian community.

25 YEAR LIFE PLAN GOALS AND DREAMS

Priority Area	Goals	Description	Time Frame
Eternal Salvation	To be Married in the Temple	Find an eternal companion and be married for time and eternity doing righteous duties as husband and wife. Magnifying priesthood duties.	2,017
	To be with my family sealed for time and eternity	This is important not just for myself but to save generations and be sealed with them up to the next life	2,015
	Study the Scriptures	Listen to the promptings and feed souls cravings for Gods words	life time
	To become a missionary and servant of the Lord	Give more of myself to others, teach and convert	life time
	Be an example of goodness, compassion, and charity	Do more outreach and service, become more actively involved in Christ's teachings	life time
	Always attend sacrament meeting, and keep the Sabbath day holy	Follow Gods commandments	life time
	Pray regularly and with more purity of purpose	Keep my spirit connected	life time
Circumstance Personal and Family Life	Hold family home evening	Work on the Family's Faith	life time
	Work on family history	Research on my family's genealogy and perform baptism of the dead to those family members who were not given the chance to be converted and saved	life time
	Stay close and in touch with my family	Continue communication with current family members and build connections with distant relatives	life time
	Make time for important family events	Birthdays, My parents 25th anniversary, wedding, graduation	life time
	Help my family pursue their goals and dreams	Support and help my parents, brother, husband, kids and other family members to achieve their goals and dreams.	life time
	Travel around the world	Visit Europe, Northern American Region, Southern American Region, Middle East, Asia, Africa Region, Australia and the Pacific	life time
	Be fluent in French, Spanish, German and Swedish languages	Take courses and continue connection and communication with Ex patriates	2,020
	Financial Security	Buy insurance policies for self and family, invest, diversify investments across businesses, stocks, liquid cash, UITF, treasury funds, growth funds, and real estate	start now and must be secured by year 2020
Education	Finish MBA Degree	This is on-going but im also working full time. I should be able to graduate on time frame specified.	2,016
	Pursue CFA charter	Equip myself with knowledge in the financial industry and I should be able to pass qualifications, research and panels on the time frame specified	2,018
	LOMA pursue charters levels 1-4	Explore and learn the basics on portfolio management, financial investments, wealth management and securing finances. I should be certified with all levels on the time frame specified.	2,017
	RFC pursue charter	To become a registered global financial analyst.	2,016
	ACEP pursue charter	Obtain financial charter on the time frame specified.	2,016
	Attend regional conferences	Go to Paris, travel across Europe and Asia	start by 2014
	Share knowledge with AXA Asia Conglomerates	Right now I am sharing e-learning modules I developed myself across our AXA conglomerates in the region and partners in the Philippines.	started in 2013
Professional Goals	Grow continuously in the corporate ladder	Obtain senior management position in any multinational investment company and foster a culture that helps employees. Work together and establish a culture of trust and achievement.	2,017
	Become an expert in the financial industry	on-going	life time
	Build a consultancy based training team	Share best practices and experience to difference sectors across the country so as to help fellow Filipinos	2,020
	Become the Philippines first e-learning based training consultancy leader	Share best practices and experience to difference sectors across the country so as to help fellow Filipinos	2,020
	Pursue an Ex patriate career	Accommodate existing national practices and learn abroad. After learning, go back to the Philippines and become an ambassador for change.	start by 2017

OATH

I swear to fulfill, to the best of my ability and judgment, black and white, bond and free all of the goals I stipulated in this plan.

In the event or for reasons beyond my control, any of the above stipulated goals could not be achieved, I shall take it upon myself to review and re-assess such goals assure to remain consistent with my vision and mission.

I sweat to look for ways to serve others, to focus outward instead of on my own problems. Keep reminded myself that I am a lawful heir, according to the flesh, and have been hid from the world with Christ in God.

This plan is the beginning of my mission to fulfill ...