Essay: Corporate Social Responsibility

Question:

Write an essay on "Corporate Social Responsibility".

Answer:

Part 1:

Corporate Social Responsibility is a business practice that has caught everyone’s attention over the last ten to fifteen years. An increasing number of big enterprises are adopting various green policies and various sustainable techniques are being implemented in their companies. It is a common practice in large firms to help various communities all over the world, who are facing various challenges due to violation and exploitation of human rights, poverty, hunger, poor health care system, poor education system, etc. For the purpose of the analysis of this case study, corporate social responsibility can be defined as an intention in business, which is beyond the legal as well as economic obligations, to act in right ways that are beneficial to the society (Pedersen 2015).

The case study selected for the research is Google Inc. It is a transnational firm and according to the data provided by the consulting firm, the Reputation Institute Google tops the Global CSR Ranking in the year 2015 for two consecutive years. In the year 2006, Larry Page the co-founder of the firm, promised to allocate a share of 1 % of profits made by Google, equity share of 1% and the worker’s precious time and effort to mitigate the problems and provide innovative solutions to make the world a better place to live (Chandra 2014). Google is 100% dedicated to be a socially responsible enterprise and has one philanthropic arm Google.org. Moreover, Google Green which aims to reduce the impact in the environment of both Google services and make investments into renewable energy to make a green place to live (Google.co.in 2016) and also Google for Educators which aims to support teachers to empower students and provide various tools that will help to expand human knowledge.

The stakeholders of Google have a very strong influence for the company’s strategy. This type of influence is incorporated in the corporate social responsibility policies and various programs applicable in the enterprise. The firm has many stakeholders which comprises of users, the employees, the advertisers, other customers, various investors and different governments (Chandler and Werther 2013).

The most important stakeholders of this organization are the users which include individuals and various enterprises that use the firm’s products and services. Generally, they don’t pay a single penny to the company. For example, the users include people who use the firm’s products like Google’s search engine, Chrome web browser, YouTube for watching and sharing videos. This group of stakeholders is vital for the firm as they determine the popularity of the company. In CSR efforts also, the users are also the first priority. The motto of the firm is “Focus solely on the user and everything else will automatically follow.” Each and every product that is developed is keeping the interest of the user in mind (Finkle 2012). Employees are the next priority for the stakeholders of Google. The workers believe in receiving proper wages and salaries and an enriching experience by working in this organization. Many employees aspire to work and want to stay for long as Google is one of the best organizations in this planet. The firm’s CSR initiatives helps to mitigate the worker’s interests through competitive pay packages , innovation and a workplace which has amazing work environment and it is a fun place to work. The company’s strategy for compensation is very unique which includes flexible work timings, food provided free of cost, have the best work-life balance (Korschun et al. 2014).

The firm also addresses the working environment of supplier’s employees through the organization’s Google Supplier Code of Conduct, which includes best practices related to employment and various occupational health and safety. There are total seven principles of code of conduct that is followed at the workplace. First is to provide excellent service to the users. Next is to respect each staff members. Third one is there should be no conflicts of interest. Forth one is to maintain confidential information. Fifth one is the company’s assets should be protected. Sixth one is every staff must abide by the law. The last one is there should be a sense of responsibility and integrity related to financial matters .So the firm’s CSR initiatives satisfy the interests of the workers (Sridhar 2013).

The organization’s success is also based on the satisfaction of the advertiser’s needs and other customers. The main source for earning revenue by the firm is through advertisement. The stakeholders are very much interested in receiving efficient services like conducting advertising campaigns through online which are effective where they can grab a lot of customers to use the firm’s products. These stakeholders are an asset as the help to determine the financial status of the company. The CSR effort which is based on the organization’s reputation helps to increase the income of the advertisers. As the firm’s important priority is to look after the interests of the advertisers and other customers and they get benefited through the company’s services (Watters 2014).

Part 2:

As the organization went public in the year 2004, investors play an active role for the success of CSR initiatives. As the investors are one of the core elements of the firm as they provide capital for running the business in a successful way. The company’s primary focus is creating excellent products. The utility of the products makes the company successful which in turn also generate a handsome return for the investors. The firm’s strategy related to research and development is a very noble approach which is incorporated in the CSR activities. The investors spend a huge amount of capital in the research and development centers where world class products can be built (Boulouta and Pitelis 2014). The firm needs to follow the government’s policies to do business in different parts of the world and needs to deal with different governments. The governments help to ensure the regulatory compliance of the firm. They are vital as they can accept or reject the company’s business operations in their jurisdictions. The organization’s business philosophy is “Without making any offence you can earn money”. To follow this rule, the company believes in ensuring all their business activities must follow all the regulations (Dahan et al. 2015).

Communities are one of the important stakeholders as they can affect the perception of the customers and their behavior about the organization’s products. The efforts made by Google for CSR activities are through various charity programs through their philanthropic arm known as Google.org which donates $100,000,000 in grants, 200,000 hours and $1 billion in various products to tackle poverty, improve the health of the people all over the world. Another arm is Google Green that uses the company’s resources in an efficient and effective way and support renewable sources of energy. The firm has been carbon neutral since 2007 and they are the largest buyer of the renewable energies of the earth. The firm follows strict international environmental and safety regulations and ethics that are written in the Supplier Code of Conduct.

The company is helping to provide power the globe through clean energy. The firm’s aim is to access renewable power upto 100% and till date they have purchased over 2.2 gigawatts of renewable energy which is equal to removing 1 million cars from the road and makes the company the largest non-utility buyer of clean energy in the world. They will invest more than $2.5 billion in projects related to renewable energy (Finkle 2012).

They use various strategies to test the technologies used to access renewable energies. The technologies must be good for business, should create a long lasting impact and the industry can be transformed. In the year 2007, they have installed the largest solar panel of 1.7 MW at their Mountain View campus. They have increased the size to 1.9 MW which produces electricity to power 30% of the buildings on the campus (Beloglazov et al. 2012).

The company purchases electricity from a developer who deals with renewable energy in the form of a power purchase agreement or PPA. It is a type of contract to purchase power with negotiable price rates over a long period from a particular power facility. A project gets selected where a same power grid is used to provide power to the data centers so that the power could be equally distributed. For example, the firm’s first power purchase agreement with NextEra, where we have made a contract to purchase 114 MW of wind energy for a period of 20 years for a project in Ames, Iowa where they need to provide electricity to their data centers. Another contract was made where 100.8 MW of energy was bought to power the data centers at Mayes County, Oklahoma (Edelman 2015). The latest agreement is the purchasing of 240 MW of wind energy that will run the data centers in Texas. Next we sell the grid power at a wholesale rate. As generic grid energy is cheap whereas renewable energy is costly which can be too costly for Google to bear the cost but they expect that contract they have made will be profitable to them in the near future as the cost of power will increase in the near future. By selling, we remove renewable energy credits (RECs) and keep the energy at their data centers so that no one charge the firm for claiming credit for the green aspect of their buying. Lastly the renewable energy credits are applied to the energy that are used at their data centers. As the RECs were produced in the same grid itself, one REC means one MWh of renewable energy used at their respective data centers replacing 1 MWh of local power. After applying the REC, the electricity power that is consumed at their data centers can be treated as free from carbon (Bullen and Sattler 2015). The PPA is a very good option to buy renewable energy at a large scale and it will create a huge impact on the market. By having a long term contract for various energies and RECs, they are providing the project developers the access to invest more on new projects that will enhance the clean energy on the power grid. By making each and every detail about purchasing of the renewable sources of energy available to the public, they are providing a data sheet and a blueprint to the other firms to power their data centers and the grid without searching for information at various places. The firm has focused on the impact of their actions which leads to a higher contribution in the reduction of the emission of the greenhouse gases and increase in the production of clean energy. The flexibility of the power grid is a very handy tool. It allows load and electricity generation in different places. There is a lot of areas for improvement in the America’s power grid so that it can be more effective and efficient way to source clean energy from sun and wind to the place where people resides (Cullen 2013).

Part 3:

The drawbacks of the power purchase agreements are the firm has to manage the purchases of the renewable power and the selling of the power in the wholesale markets which can be a very complex process. First the firms need to accept the energy mix which is provided by the local electric provider. In few places the energy mix contains high intensity carbon content. Secondly the organization cannot request or persuade the renewable energies from the local provider with a straight talk as they have an idea how much they are receiving the renewable energy and from which location (Mer et al. 2015).

To address various issues for buying renewable energies, a tariff for renewable energy is introduced. Here firms like Google who are interested in buying renewable energy have to buy a service. This is a voluntarily service provided to those companies who want to avail the service but the service is open to the public to purchase and fulfill the eligibility criteria (Dong 2012). The tariff approach has many benefits. It lets the power providers to build power plants, obtain power, managing the power grid and provide electric supply to the customers. It allows providing energy from various power sources as sun and wind will not be available minute throughout the year. It helps to reduce the transaction cost by providing a service to a large group of consumers who are interested in using renewable sources but don’t have the power to act in an independent way. The tariffs will help to boost economic growth as the enterprises choose to expand their data centers in various locations that more options more renewable energy. Tariffs will help in creating jobs in a service area as purchasing of solar power will lead to more investment in the local and regional power projects and finally the power cost will be decreased that will be beneficial for everyone (Kalkuhl et al. 2013).

There should be proper guidelines for the stakeholders who include the energy providers, state utility commissions and the customers. The stakeholders must create new rates with proper framework and incentives. Some parameters must be followed to create a proper tariff structure. First, it indicates the eligibility. Next is the integration of various services. Third point is that the various resources from where the energies are generated. Fourth indicates the attributes related to green energy like the RECs and last are the rates of the renewable energies.

The tariff for renewable energy will work best with Google as it provides a transparent and reliable framework for the both the power utilities as well as other customers who are interested in procuring renewable energies.

Google Inc has earned a lot of fame in becoming a socially responsible organization. The founders are committed to do philanthropic activities with the help of Google Foundation and Google.org. . There is Google Green that uses the company’s resources in an efficient and effective way and support renewable sources of energy. The firm has been carbon neutral since 2007 and they are the largest buyer of the renewable energies of the earth. The results through Google Foundation and Google .org include monetary support and various services to address various problems like poverty, health care, education system, sanitation, safe drinking water, support for the flood and the earthquake victims, etc. Google for Educators is another area where the firm’s aim is to help the teachers for the empowerment of the students and provide various tools that will help to increase knowledge.

Google has also adopted various measures such as installation of solar panels in their campuses, electric powered buses and utilization of food in a sustainable way. The organization has protected its ethical values by removing the censorship and human rights violation. The CSR at Google Inc becomes a part and parcel of their lives and the CSR has become aligned with the company’s mission, beliefs of the founders, organizational culture and development of various products (Flammer 2015).

References

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Boulouta, I. and Pitelis, C.N., 2014. Who needs CSR? The impact of corporate social responsibility on national competitiveness. Journal of Business Ethics, 119(3), pp.349-364.

Bullen, M.J. and Sattler, C.W., Solar Components Llc, 2015. Generation of renewable energy certificates from distributed producers. U.S. Patent 9,111,321.

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Chandra, A.A., 2014. An investigation of cross-generational perceptions of corporate social responsibility (Doctoral dissertation, ADLER SCHOOL OF PROFESSIONAL PSYCHOLOGY).

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Kalkuhl, M., Edenhofer, O. and Lessmann, K., 2013. Renewable energy subsidies: Second-best policy or fatal aberration for mitigation?. Resource and Energy Economics, 35(3), pp.217-234.

Korschun, D., Bhattacharya, C.B. and Swain, S.D., 2014. Corporate social responsibility, customer orientation, and the job performance of frontline employees. Journal of Marketing, 78(3), pp.20-37.

Mer, S., Dudhe, S. and Suryawanshi, S., 2015. Future trends in distributed renewable systems. Int J Eng Res Electron Commun Eng, 2(6), pp.7-10.

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Sridhar, K., 2013. Employment branding at Google: a challenge to attract and/or build talent. International Journal of Sustainable Society, 5(4), pp.350-356.

Watters, P.A., 2014, January. A systematic approach to measuring advertising transparency online: An Australian case study. In Proceedings of the Second Australasian Web Conference-Volume 155 (pp. 59-67). Australian Computer Society, Inc..

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