Business Responsibility And Sustainability Essay

Question:

Discuss about the Business Responsibility and Sustainability.

Answer:

Introduction:

Founded in the year of 1917, Union Carbide Corporation, has been gradually growing as an organization, producing a variety of products, starting with polymers and chemicals, to paints, packaging materials, products of personal care, and many more. The organization had been enjoying an unprecedented success over the last few years, and in fact the earnings of the organization per share rose as much as to 100 per cent, during the years of 1973 to 1982 (Unioncarbide.com 2016). However, as a result of the mishap in Bhopal, which was caused by the organization’s pesticide plant, the profit making capacity of the organization was remarkably reduced. Charges were being brought against the management authority of the organization, accusing them of mismanagement, and lack of organized control. As a result, Union Carbide, in order to regain public faith in the organization, had to expand itself to other parts of the world. However, for the successful operation of the business activities in a global environment, the organization must be able to adopt the suitable marketing strategies.

Discussion:

Role of Cross Cultural Relationship in Stakeholder Relationship

In the global environment, despite the convergence of diverse cultures, there are prominent cultural differences, that can be found among the people of different countries. Hence, Union Carbide, if willing to expand itself globally, must adopt a different business strategy, so as to influence the purchasing decision of the foreign consumers. The importance of cross cultural communication in case of global expansion cannot be overstated. Halpert, the President of Private Label Select, who has adequate experience of selling his products abroad, claims that offending a consumer’s cultural preference can prove to be extremely detrimental to organizational success. In case of global trade, the organization must not only sell innovative products, but should also aim at building good relation with the consumers. When the employees of an organization are aware of the cultural differences, they show respect towards the cultural distinctions. This helps in developing a sense of value and trust among the consumers. It should be remembered, that in case of global trade, an organization not only requires to conduct business with consumers of different cultural backgrounds, but also with employees, from various ethnic backgrounds. Hence, each employee going to work abroad, for Union Carbide, must conduct a genuine research and should undergo rigorous training on the cultural traits of the foreign country. Different countries have distinct corporate cultures. Hence, Union Carbide, in order to conduct a business meeting in another country, must be aware of the business ethics of that country. For example, in German business culture, adherence to strict business rules and a strong sense of punctuality is needed. On the other hand, Asian countries like China and India have a more informal and personal approach to any business meeting. Again, the CEO of Menchie’s Frozen Yoghurt, Kleinberg attributes his success in international trade, to his adequate knowledge of cultural differences of different countries. According to him, one very important consideration every business organization must be aware of is that consumers of each country have a different attitude to the promotion strategy, and hence the organization must be well aware of the suitable method of promoting its product and service in a foreign country (Hofer 2015). Cross cultural relationship is needed to conduct successful business meetings abroad whereby the expatriates of Union Carbide must be equipped to deal with different business customs. Apart from the acquisition of the foreign language, it is very important to deal with non-verbal differences as well. The management authority must have sufficient knowledge about the preferences and needs of the consumers abroad, depending upon which the promotion strategy should be chosen.

Union Carbide as an Indian organization, before expanding to the rest of the world, must understand the cultural differences that exist between the people of various countries. The management authority must be aware of the difference in cultural traits and attitudes, of the people of Europe, as compared to those living in the Asian countries. The future market expansion in countries like America can be a highly favourable idea, provided Union Carbide makes sufficient research for developing cross cultural communication, in the foreign environment of the country (Rallapalli et al. 2015).


Hofstede had proposed the theory of cultural dimensions, which provides a framework of cross cultural communication, needed in order to conduct business in a foreign region. The management authority of Union Carbide must be well-aware of the basic cultural traits of the inhabitants of the US, so that they can get a fuller and more comprehensive look at the market condition of the rival organizations in America, and the consumer perceptions of an organization.

Figure 1: Hofstede’s Cultural Dimensions of USA

(Moran 2014)

America scores very high on individualism index, and hence just like most of the European countries, the country will be open to the innovative business idea. As America enjoys a high rate of individualism, the consumers are more willing to adopt new products and to try out new services made available in the country. Union Carbide, as a result, will face less obstacles in opening up the market in America, as far as the question of brand acceptability in a foreign land is concerned. Further, since America scores considerably high on Masculinity index as well, the consumers are extremely venturesome, highly enthusiastic about anything new hitting the market, and absolutely prepared to embrace the product, provided it is a good one. America scores relatively much lower on the scale of Uncertainty Avoidance, and as such the Americans are more tolerant of new business ideas. However, the Americans are very conscientious people, and as such they are driven by the consideration of what is right and what is wrong. Keeping this in mind, inclusion of major Corporate Social Responsibility strategy in the business plan as well as the market promotion of the organization can largely benefit Union Carbide, in influencing the consumers’ purchasing decisions (Bishop et al. 2016).

In European countries, the authority of the Union Carbide, can prosper a lot from the introduction of novel and innovative business ideas. Not only the consumers will welcome such innovation in business plans, but even the entrepreneurs are more likely to invest more enthusiastically in new business plans. However, since the Americans are mostly competitive, a highly energetic and positive attitude to business can be very impressive (Verbeke 2013).

Unlike US, in India, the organization has a limited opportunity of introducing novel business ideas, as the Indians do not have a very high tolerance for change or risk (Piaget 2013). Failure in a particular project can have an adverse effect on the mindset of the Indians, and so it is highly recommended that before the introduction of a business plan, adequate time is being devoted for conducting the research on the same. While conducting business meetings, the issue of inter-cultural sensitivity is required, as the Indian employees will always prefer a group oriented approach to the business problem, while the Americans will tend to approach a problem from a more individualistic and analytical perspective (Ramesh et al. 2014).

Culture in ethics and corporate social responsibility (CSR)

Although any organization works with an ulterior motive of making profit, if any organization declares its desire to devote a part of its revenue to the promotion of a cause, the brand value of the organization increases by many folds (Zaharia et al. 2013). A large number of consumers claim that they are willing to pay higher price for a product if the particular organization is donating its revenue for a grand cause. Thus, the CSR of an organization can largely help in the development of a powerful public image of the organization. The Bhopal Gas Tragedy was an unforgettable incident in the history of mankind, whereby the MIC gas from the pesticide plant of Union Carbide, led to a huge, massive destruction of lives and properties (Singh et al. 2013). More than 10,000 lives were lost, and hence the stakeholders of the organization could not save themselves from being accused of negligence shown toward the community as well as the environment. Much of the reputation of the organization got tarnished because of the notorious event, and hence it is highly important for the management authority of the organization, to incorporate the idea of CSR strategy in the business plan of the organization (Costa and Menichini 2013).

Figure 2: CSR Activities of an Organization

(Haynes et al. 2012)

If Union Carbide introduces a set of CSR activities, it will be able to develop its image as a brand that believes in doing business more responsibly. Keeping this in consideration, the company can introduce CSR initiatives in different spheres of its activities. The Bhopal Gas Tragedy has caused excessive environmental degradation, and hence it will be a discreet act if the authority of Union Carbide chooses to invest in some eco-friendly projects. For instance, Google Green was an eco friendly project that was being adopted by Google with the purpose of supporting renewable energy. Similarly, Union Carbide may also invest in initiatives that support fresh and healthy living, water conservation and the use of energy efficient methods of production. The cultivation of a green approach to the business activities, can attract a huge number of consumers, who are instantly fascinated with the thought of buying products from an organization, that produces least impact on the environment. The adoption of this strategy has effectively helped large international organizations, such as Wal-Mart and Woolworths in developing the company’s brand image and in drawing the attention of a greater number of consumers. Studies suggest that usually the consumers desire to bring about change in the environment or the community, but 61% of the consumers claim that they want the companies to take the lead (Feldman et al. 2013).

Apart from investing in eco friendly projects, the authority of Union Carbide, must also invest in social initiatives that promote community well being and social harmony. Union Carbide, while expanding its market in foreign locations, can easily attract the attention of the consumers, if the company promises to pay a percent of its total revenue obtained from the sale of a product, for some charitable activities. To create a remarkably positive impression of the brand, in the minds of the foreign consumers, the organization may open up a free school, provide irrigational facilities or provide financial assistance for the cause of female empowerment (Raub et al. 2013).

The management authority of Union Carbide has decided to expand its market in the foreign locations as well, and hence the adoption of the CSR initiatives shall prove to be highly beneficial. CSR strategies help in the development of the brand value of an organization, and thereby assist in doubling the profit making capacity of the organization. However, it should be remembered that each nation with its distinct cultural trait, has a distinct approach and preference for the CSR initiatives to be undertaken. If Union Carbide is deciding to expand in Canada, it must remember that the Canadians have a deep concern for the issue of environmental conservation. Hence, in Canada, the CSR initiatives should revolve around projects and initiatives that support the cause of water conservation or the control of the emission of harmful gases. On the other hand in India, if the organization decides to devote a considerable amount of its earnings for the promotion of greater social cause, such as providing educational opportunities to impoverished children or investing for water conservation programs, the organization can enjoy a positive brand image much easily (Lee et al. 2012). The appropriate CSR strategies can largely benefit an organization, as the effective adoption and application of the strategies can help Union Carbide, in the retention of its existent employees, the creation of new customers and in the development of the corporate reputation of the organization. At the same time, if the CSR strategies of the organization can contribute to the well-being of the community members, the improvement in their condition can raise their income, which in turn can provide the organization, in enjoying a secure supply chain (?berseder et al. 2013).

Brand as a Means of International Communication:

Cultural diplomacy and international communication are intertwined with the concept of branding. When it comes to international market, the company needs to conduct the marketing communication with great care. Brand definitely puts great impact in international or domestic market. For example, BMW, Louis Vuitton are some brand names that originate in a particular country but are enthusiastically accepted by consumers of other countries. It is due to the increasing impact of globalization that international communication is gaining greater importance. The importance of an effective communication cannot be neglected and thus, it is advisable that Union Carbide will also undertake certain instances that will help the company to develop an international brand image.

There are certain factors that might create negative impact or hindrance for a company that has plans for global expansion. The, symbols, design and aesthetics do not transcend international boundaries. For instance, language of the country can be really challenging for the company but a brand can be easily recognized by the people if it holds that level of impact in its respective industrial field. People who are more aware of the origin of the product have greater trust on the product. On one hand, it has a positive impact on the product or company that has intended to go global but at the same time it becomes a challenge for the company to maintain that level of expectation from the consumers (Nyadzayo et al. 2015).

The brand creates trust mark on consumers. Brand creates a relationship with the consumers because relationships are built on experiences. A product or a company is able to make good relationship with its consumers only by satisfying their needs and expectations. When the consumers are completely satisfied with the product, it earns the name of a brand. When a positive perception is created on a particular brand, consumers’ behaviour is bound to produce a positive impact on the sale of the product (Singh 2013). Favourable experiences will produce strong emotion among the consumers and there will be a stage when the consumers will no longer scrutinize the product before making any kind of purchase and will do it in the name of the brand. Advertising and promotion definitely holds great importance in shaping and creating a good image of the brand. There are certain strategies that need to be followed by different companies to product their product as a brand. These strategies vary from product to product to product. In case of Union Carbide, it is expected that the management team would come up with certain planning and try to make a greater impact in creating a brand image for their product (Urde et al. 2013).

Globalization has created both opportunities and challenges for many brands. Due to globalization, consumers are now open to many options because similar products have been introduced by many companies. Moreover, consumers make thorough decision at the time of making purchase decision. In such situations, brand names always hold a greater impact in consumer selection decision (Singh 2013).

An organization must be able to decide who are its target clients. The target clients are decided by researching on the regular consumers of the organization, based on their demographic details and personal needs and preferences (Buil et al. 2013). Again, the introduction of some unique, breakthrough features can help in the creation of a brand image that can help in providing a distinct identity to the brand. Further, the improvement in the service being provided to the consumers can also remarkably help in the development of the brand image. Most importantly, the organization should adopt strong punch lines that communicate the purpose of the organization in the international market. Whatever tagline be chosen, Union Carbide must ensure that the tagline can appeal to the respective consumers of each of its products. The taglines chosen should reinforce the idea of innovation and uniqueness which the company intends to introduce through each of its products. Further, the company can promote some kinds of positive attributes, such as strength, energy, joy, happiness or confidence through the taglines of its product, which will result in greater acceptability of the product among the masses (Kapferer et al. 2012). While creating brand awareness of the product, some known faces can do wonders for an organization. Hence, Union Carbide can take help of some celebrities, from the field of sports or entertainment industry of the particular country, to represent the brand. This can also help in increasing the brand recognition of the product among the masses (Iglesias et al. 2013) . . Consistent interaction with the consumers, listening to their inquiries, complaints or feedbacks, offering them attractive discounts and vouchers, can help in the swift development of the brand image of Union Carbide. Further, the organization must form a separate social media marketing team that will keep the consumers updated about the CSR activities undertaken by the company, through its various social sites, and official business page. The idea of CSR is based on a concept of shared benefits, and hence this way of publicity of CSR initiatives, will help Union Carbide build a sense of trust in the minds of the consumers towards the brand of the new organization (Blomback and Scandelius 2013).

Conclusion:

In the present world of competitive market, every organization in order to succeed, must aim at expanding itself beyond the horizons of the local market. However, for the successful expansion of the market the management authority of an organization must be well aware of the cultural differences that become a serious issue, in case of global trade. Hence, the authority of the organization must conduct enough research into the cultural traits of the inhabitants of a particular country, before extending the market to that country. In absence of sufficient knowledge of the cultural traits of a foreign country, there may be several cultural issues or conflicts cropping up, that may spoil the relation of the organization, with its potential stakeholders. Hence, it is important that the employees of the organization are well trained to adjust with the linguistic as well as cultural difference of a foreign country. In addition, the company must adopt meaningful CSR initiatives, whereby it can draw a large number of potential consumers, by convincing them of the good business motives.

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