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Corporate Social Responsibility in Supply Bondage

Submitted: July 24th, 2014 Reviewed: Oct 14th, 2014 Published: April 15th, 2015

DOI: 10.5772/59582

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• Eser Kayhan Tekin

  • Turkish Naval Academy, Turkey

• Alper Ertürk*

  • Turkish Naval Academy, Turkey

• Hakan Tozan

  • Turkish Naval Academy, Turkey

*Address all correspondence to: aerturk@dho.edu.tr

1. Introduction

In today's business earth, growing attention is being paid on the business concept; "Corporate Social Responsibility" (hereafter, CSR), generally considering of environmental concerns, regulatory impacts, commercial benefits and reputation in front of the order. Increasing number of companies initiates and implements practices considered equally CSR activities.

Concept of Corporate Social Responsibility (CSR) has been start introduced by Bowen (1952) and states that while implementing strategies and making their decisions, organizations should act taking into consideration club's values [1]. At the end of 1970s, after evolution and inclusion of Stakeholder Theory into the management literature, CSR has been defined every bit covering all the relevant stakeholders. In this respect, Carroll (1979) defined CSR as sensitivity of an organization about the stakeholders' expectations on the management of social, ecology, economic, ethic and legal problems [2].

Towards the terminate of 1980s, concept of sustainable development has been introduced and has focused on economical, social and environmental factors that organizations should consider. Sustainable development emphasizes how today organizations tin can fulfill their needs without jeopardizing the needs of the futurity generations [3]. Concepts of social responsibleness and sustainable development accept been developed separately and social responsibleness mainly focuses on social problems as human rights while sustainable development mainly focuses on ecology problems [4]. Nevertheless, in the recent management literature, those 2 concepts are being used together.

Fifty-fifty though the term "CSR" includes the discussion "corporate", CSR covers the bug related to both social and environmental matters. On the other hand, CSR practices cannot exist considered distinct and even should exist integrated to other organizational strategies or activities. Another important consequence is that CSR practices are mainly based on the principle of volunteering. That is why those practices should be carried out past participation of relevant stakeholders.

During recent years, there have been several factors that force or stimulate organizations concentrate on CSR and particularly environmental applications [v]. Among those, laws and regulations turning CSR applications into mandatory implementations are considered the most important factors. Another of import gene is possible negative financial consequences that might be faced past the organizations ignoring or not complying with social or environmental responsibilities.

Companies take realized the crucial importance of environment, started to adapt several strategies and changed their means of doing business. From the environmental perspective, those companies involve the environmental issues every bit an important part of social responsibility. Especially when it comes to manage supply bondage, it becomes also important to consider whether all suppliers and other companies in the chain implement CSR activities and practices. All companies including suppliers take responsibility to do no harm to the surroundings, to reduce waste and pollution, to control gas emissions, and to comply with governmental regulations whilst at the same fourth dimension to reduce their price and to increase their profit.

Increasing concerns about the surround stimulates governments and international organizations, such equally European Wedlock, European Commission, to promulgate new laws and regulations. Thus all actors, including suppliers and manufacturers, in the product life cycle take their ain responsibilities on environmental issues. Furthermore, companies are obliged to meet the standards and criteria in force to stay competitive in the market and to keep their sustainable growth.

In addition to the ecology problems and regulatory concerns, social issues keep its crucial importance. Although CSR activities require a great amount of investment, companies need to integrate CSR concept to their processes for college customer satisfaction and loyalty, better corporate image and reputation, higher productivity, lower costs and thus college business organisation profitability.

Changes in the behaviors of consumers whose awareness and sensitivity on social and environmental issues increase constitute another reason to implement CSR applications. Enquiry has yielded that consumers prefer the products of companies that attach more than importance to protecting environment and put emphasis on activities related to social responsibility [6]. Inquiry has also revealed that reputation and positive image of companies that initiate CSR activities increment in front of society and enhanced reputation provides reward to those companies.

Equally a result, no matter in which field companies operate, in order to stay in the competition, they should determine their CSR strategies and programme their relevant activities. Next department will explain the different CSR areas which are considered important for supply bondage.

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ii. Areas of social responsibility in supply chains

Supply Chain Direction is a process comprised of several distinct but interconnected functions and activities. Internal and external transportation management, warehousing, inventory management, acquisition management, logistics service providers management, resource management, packaging and assembly, customer services are amid the most of import ones. It is likewise possible to break down the supply concatenation management process into two chief flows; i.e. frontwards flow and reverse period. Taking into consideration those processes, principal areas of social responsibleness in supply chains are [vii, 8]:

• Organizational practices

• Ethical practices

• Ecology practices

• Practices of human rights and working conditions

• Practices of occupational health and safety

• Practices to found relationship with society

Table 1 summarizes activities and practices considered expert examples for the CSR areas listed above.

Relevant CSR Areas	Sample Practices
Organizational Practices	• Determining CSR goals for purchasing function • Determining and defining roles and responsibilities of human resources related to CSR in logistics • Providing relevant training in CSR to the suppliers • Sharing of CSR activities and practices with all relevant stakeholders • Implementing a mechanism to receive feedback from stakeholders regarding CSR practices
Ethical Practices	• Not accepting gifts, complimentary services, etc. from suppliers (especially during supplier choice process) • Not creating illegitimate pressures on suppliers • Not sharing toll and service information about suppliers with other irrelevant stakeholders • Not favoring whatever item supplier but because of managers' preferences and assuring a fair selection process • Assuring all departments meet upstanding standards in independent purchasing procedure • Not creating illegitimate reward in competition past using contract items • Not giving out wrong information on purpose • Not using specific items pointing out specific suppliers in contracts
Environmental Practices	• Purchasing and using recycled materials for packaging • Supporting and encouraging suppliers on reducing waste product (specially hazardous waste) • Putting special accent on producing recyclable and reversible materials in production and blueprint • Meeting standards for protecting environment in the processes of lifecycle management, production, packaging and storing • Supporting suppliers to implement processes that are advisable for sustainable environmental protection
Practices of human rights and working weather condition	• Non keeping some suppliers out of cycle, just because they take managers from different backgrounds • Having procedures and also having mechanisms to monitor providing equal opportunity for each employee working in all supplier companies • Having appropriate procedures in place to assure that all employees tin benefit from all their legal rights, are working in accord with rules, regulations and national/ international standards • Assuring that physical and psychological working conditions comply with all rules and regulations in place
Practices of occupational health and safety	• Having appropriate procedures in place to assure that working weather do not jeopardize human wellness and safety • Assuring that all rubber, security and protection measures are in place for all activities • Having procedures in identify to clinch that sensitive and delicate products are stored under advisable weather
Practices to establish relationship with society	• Developing and carrying out programs for training and development of local suppliers • Actively participating into and organizing non-for-profit social activities, such as volunteer work, charities, public auctions, etc. • Supporting sport activities and public education

Table one.

Examples of CSR Applications in Supply Chain Management (Adapted from [8])

Among those aforementioned activities, ensuring that all activities and functions comply with national / international rules, regulations and standards and working with suppliers that fulfill same requirements constitute the most of import factors for CSR in supply bondage. This issue is also important to stay competitive in market and to accept a sustainable growth in terms of strategic perspective.

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3. Green supply concatenation management

In general terms, Dark-green Supply Chain Management (GSCM) can be defined as reflecting a company's consideration and sensitivity well-nigh ecology issues to all other supply concatenation processes. GSCM also assures that companies consider not jeopardizing the environment in all supply chain functions.

Companies usually perceive the GSCM practices every bit factors that increase the cost in general. However, research has yielded that GSCM practices help companies to reduce general costs, increment productivity, foster innovation, save resources and increase competitive reward [9]. Besides those tangible benefits, GSCM practices also play important roles in increasing employees' job satisfaction and commitment, promoting client loyalty and pleasure, enhancing their reputation in the eyes of the guild.

Master goal of GSCM is to assure that environmental practices are practical in the all phases of the process from procurement of raw fabric to the delivery to the consumer; such every bit purchasing, production, packaging, warehousing, distribution, assembly. Long-term goal of GSCM is to keep under control all the processes, reduce the chemical waste, lessen the gas emissions and eliminate all the activities that may be hazardous to the nature.

In the telescopic of GSCM, companies more often than not use three basic approaches [10]:

• Reactive arroyo

• Proactive arroyo

• Value seeking arroyo

Companies adapting reactive approach, usually apply procedures compliant with rules and regulations in force, such every bit practices of human rights, minimum resource usage, supply recycled products. Hence, reactive companies take a low level of GSCM.

On the other hand, companies adapting proactive approach, apply procedures to foreclose possible problems that may arise in the future, instead of struggling with past problems. Thus, proactive companies develop programs and policies on how to implement and command green supply chain applications.

Companies adapting value seeking approach systematically integrate their environmental policies into their long-term business strategies, reflect those policies to their decisions and share this with all their stakeholders. Likewise, they establish a close communication with their suppliers and stakeholders, and encourage them to integrate environmental policies to their ain business processes.

From the systems management approach, GSCM constitutes of a series of interconnected, not independent, activities through a long process from the suppliers to the customers. Hence, GSCM should exist applied on the whole process in a holistic manner. Thus, to achieve a successful GSCM, all activities and practices through the process should consider GSCM principles.

During the last decade, research on GSCM has focused on the stages of the product life cycle and emphasized the importance of greening approach in fabric choice and purchasing, visitor'southward supplier pick, waste material management, packaging, manufacturing and production, regulatory compliance [11].

In addition, some other important issues in GSCM include selection of environmental performance criteria and indicators, relationship between environmental and economic performance. To mensurate achievement of GSCM, companies ascertain success factors in accordance with their areas of activity [five]. Determining and measuring those success factors aid companies to understand the effectiveness of environmental policies and indicate how well those policies are integrated into the business processes. In this framework, some success factors that can be used to measure out the effectiveness of ecology policies are as follows:

• Amount of free energy and raw textile spent

• Corporeality of waste produced and exposed to the nature

• Amount of hazardous fabric used in the production procedure of appurtenances and products

• Amount of fuel usage and gas emission in the production, storage and transportation

• Corporeality of recycled material through the processes

• Number of partnerships with suppliers on the area of environmental sensation

• Level of reputation of the visitor in terms of environmental sensitivity in front of the public eye

Companies adapting GSCM practices may evaluate the effectiveness of their activities and processes in terms of environmental issues and may alter their plans and strategies if necessary.

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4. Applications of social responsibility in the process of supply chains

Every bit aforementioned in detail, socially responsible applications and practices should be placed in all the phases and steps throughout the supply chain procedure from procurement of the raw materials to the commitment of products to the client. In this respect, this section will give specific examples of socially responsible applications in each phase and function.

four.1. Social and ecology practices in procurement and purchasing

Social responsibility in procurement and purchasing can exist divers as performing all purchasing activities in accordance with the CSR principles and taking into consideration CSR principles in the conclusion-making process [6]. If a company complies with the relevant standards on environmental issues and involves its applications in the processes, procurement and purchasing processes tin can exist important activities to spread the CSR concept to the suppliers.

One of the first CSR practices that can be integrated into the procurement and purchasing is to adopt recycled and/or recyclable materials [12]. In addition to the purchasing of recyclable raw materials, giving precedence to the procurement of technologies that consume less energy and produce less waste is another important exercise [13].

Besides, from a holistic perspective, choosing right suppliers that also apply CSR concepts in their own processes and also comply with relevant rules and regulations plays an important office in procurement process. In this respect, earlier initiating the procurement processes with suppliers, it should be verified that the suppliers also suit CSR applications in their own processes as required.

4.two. Social and environmental practices in production

Social responsibility in production process take place both in forward and opposite supply concatenation management activities. In full general terms, CSR in product includes the design of the product taking into consideration CSR principles and the production without giving any impairment or risk to the environment [13].

Amid the near important long-term goals in the environs-friendly product procedure, to implement the systematic machinery reducing the amount of waste and to dispose the waste without giving any risk to the nature are considered the cardinal practices.

Another important goal of CSR in production is to assess each phases of the product life-wheel in order to make up one's mind the possibilities of re-production, re-usage and re-cycling of the materials used in the production process. If whatever possibility is determined, this should be integrated into the product processes for the do good of gild [5].

4.3. Social and ecology practices in distribution and transportation

Social responsibleness in distribution and transportation means developing required transportation and distribution adequacy while maintaining and enhancing environmental, economic and social sustainability [8].

CSR in transportation has been conceptualized during 1990s and has focused on environmental and economic aspects of a sustainable transportation process [xiv]. Most important effects towards the environment include emission of greenhouse gas, emission of gas which is hazardous for the ozone layer, discharge of hazardous waste produced during transportation.

Socially responsible practices in transportation area include giving opportunities to local transportation companies, carefully monitoring that the traffic rules and regulations are followed all the fourth dimension, implementing mechanisms increasing safety and security performance in transportation.

4.iv. Social and ecology practices in packaging

For more than 20 years, there is already a pressure on the companies to lessen the negative furnishings of the packaging cloth on the environment. Laws and regulations that accept been put in outcome lately increase the importance of CSR in packaging function. Recently, influence of packaging procedure on the environs is considered in the framework of production life-cycle from a more holistic arroyo.

Under the CSR concept in packaging process, there are several activities to be considered, such as storage, warehousing, protection of the production confronting deterioration. Throughout those processes, CSR in packaging requires the usage of recycled and non-hazardous textile, reduction of waste, reduction of free energy consumption and design the process in such a way that does not harm the ecosystem [15].

In packaging, size of the packet is a usually neglected just an important factor, since the size straight determines the corporeality of fabric used. By having well-designed packages, companies may increase the efficiency in resource usage. In addition, small size of a package helps companies to formulate their loadings in the nearly optimum way and reduce their transportation costs.

4.5. Social and environmental practices in warehousing

Social responsibility in warehousing is a relatively new concept. CSR in warehousing starts with choosing the location of warehouses by taking into consideration all relevant environmental and social issues.

In add-on, providing a healthy and safe storage for products is another important activity. Even more than chiefly, warehouses used to store hazardous material without threatening the environment found a vitally of import issue in CSR. Offering spare or extra materials for the benefit of the society is as well an activeness considered under the CSR concept. Finally, every bit in the other supply concatenation functions, taking all safety precautions and safety measures for the workers' wellness and safety in warehousing is besides an important activity [8].

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5. Opposite supply chain management

In general terms, Reverse Supply Chain Management is defined as the series of activities or the process used to retrieve a used product from a consumer and either dispose of it or reuse it [16]. This concept likewise emphasizes activities in functions of transportation, warehousing, inventory management and collaboration with partners [17].

From a business viewpoint, although implementation and controlling the reverse supply bondage crave an important amount of investment, it brings economic and competitive reward, as well every bit strategic importance to the companies adapting them. First of all, companies implementing reverse supply chains can reduce their costs by reducing the amount of raw materials, and reselling products after being scrapped [eighteen, nineteen, 20].

Reverse supply concatenation helps the company to generate its green image and enhance its reputation in front of the society. It also gives the company an opportunity to build stronger relationships with the customers.

Reverse supply chain management deals with all activities from the cease-client to the suppliers. According to Vogt et al. (2002), waste handling activities include contrary distribution of products, return of unsold appurtenances, production returns, product recalls and waste matter management [21]. Dyckhoff et al. (2004) prioritized the reverse supply chain activities as reuse of product, remanufacturing, recycling and disposal of goods [22].

A majority of opposite supply chains start with the action of production acquisition from the customer [16]. During this phase, used products or materials are retrieved from the customer. Product commercial returns and recalls, conquering of defective or damaged goods, waste matter stream are among the activities for product retrieval from the client. Product acquisition is the most important phase for a profitable reverse supply chain [16].

Another of import activity for reverse supply chains is inspection. Since customers return the sold products for several dissimilar reasons, inspection plays an important office earlier going further in the process. Inspection process include activities, such equally disassembling, eye-inspection, testing, sorting and rating of the product [sixteen, 20]. Finally, to increment the value obtained from the returned product, nearly appropriate disposition culling should be selected.

Prahinski and Kocabaşoğlu (2006) proposed four different product recovery strategies which are direct reuse, production upgrade, materials recovery and waste direction [17]. Reconditioning is conducted if information technology is decided to reuse or upgrade the product. Equally the returned product is reconditioned, then the adjacent phases of the process are re-distribution and re-sale of the product. Anderson and Brodin (2005) likewise emphasized the function of the customer in this whole process. Since the customer is the actor who uses and returns the product, he/she determines the quality and the current state and condition of the product [23].

Finally, reverse supply concatenation management is a holistic and integrated approach to managing waste and reduce the amount of hazardous material. In this respect, this process is very effective in CSR concept and is being adapted by a lot of companies.

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six. Discussion and conclusion

Under the strong influence of increasing competition, globalization, advice and data technologies, companies trying to continue their positions in the market and to maintain a sustainable growth are increasingly inclined to apply corporate social responsibility activities and practices.

Corporate Social Responsibility (CSR) can exist defined every bit companies' voluntary integration of social and environmental concerns in their concern processes and in their relationships with other companies and stakeholders [8]. As companies successfully adapt social and environmental practices, they can achieve economic benefits by reducing costs, increasing productivity and profits, enhancing corporate prototype and reputation. However, for supply chains to be successful in terms of CSR, companies, including all suppliers and manufacturers in the concatenation, need to increase their ain sensation and act in a socially and environmentally responsible manner. Moreover, they are obliged to comply with the environmental laws and regulations, to come across national and international standards and to integrate CSR practices in their business processes.

Supply bondage are increasingly put under pressure mainly by customers and stakeholders to implement CSR management systems across the chain. All companies throughout the chain are obliged to implement practices and initiate activities on economic, ecology, and social aspects to maintain their sustainability. To transfer and share the CSR responsibility beyond the chain, companies adjust several practices, such as establishing written supplier requirements, monitoring supplier operation if they meet the requirements and contributing suppliers' awareness on social and environmental issues [8].

Since companies collaborate very closely and the success of the supply chain depends on the inter-company relationships throughout the chain, it becomes more and more than of import that all actors in the chain apply CSR principles in their own processes. Thus, collaboration on the CSR matters amid the members of the chain is a crucial factor.

In their recent study, Seuring and Muller (2008) proposed four key factors to increase the success of CSR implementation beyond the supply chains, namely (1) Determining pressures and incentives for CSR applications across supply chains, (2) Identifying and measuring the impact of those applications, (3) Addressing and managing different bug at the supplier-buyer interface, and (iv) Managing, implementing, and integrating CSR applications into all business concern processes of all actors, taking into consideration whole product life cycle [24].

In terms of frontwards supply chains, from the procurement of raw materials to the delivery of the product to the stop-user, companies systematically integrate CSR principles to their business organisation processes and functions, including purchasing, warehousing, storage, packaging, transportation and distribution. In addition, in terms of opposite supply bondage, companies also integrate relevant practices from retrieving the production from the customer to the reusage, remanufacturing, recycling and disposal.

Equally a reflection of successful CSR applications across the supply bondage, all companies raise their reputations in front end of the public. And thus, they should integrate social responsibility into their business strategies to help their client relationship management. Supply concatenation managers should adapt relevant CSR strategies to manage their supply chains in a more socially responsible manner to exist able to foster their companies' relationship and interactions with the customers and all stakeholders. Adapting CSR focused management strategies volition too assistance companies to develop future markets and customers. However, although the positive financial consequences of CSR applications are proposed in several studies, CSR introduces less quantifiable considerations relating to the natural environment and social bug.

As aforementioned in previous sections, trends towards integration of sustainability concepts into legislations and promulgation of relevant rules, regulations and standards by national and international organizations alter the nature of competition and the business organization environment in which supply bondage operate. These changes forcefulness companies across the chains not only address and adapt new strategies, such as reverse supply chain practices, but likewise conform their existing processes and procedures and generate new design, product, management and monitoring systems. These applications and modification volition assist companies to reduce the uncertainty in the business environment.

In this chapter, we try to summarize and present a framework in a holistic approach for addressing the issues, practices and activities for supply chains under the corporate social responsibleness concept. Nosotros believe that the information presented here will aid supply chain managers to better comprehend the importance of CSR applications and how they can implement those in their own areas of responsibility.

However, there is still a sure limitation nigh the practical uncertainty on the success of CSR applications across the supply chains in different business organisation and cultural contexts. Thus, future enquiry should specifically focus on empirical studies to further contribute on how social responsibility tin can exist more effectively and efficiently integrated into the functions and the processes of the supply bondage.

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Written By

Eser Kayhan Tekin, Alper Ertürk and Hakan Tozan

Submitted: July 24th, 2014 Reviewed: October 14th, 2014 Published: April 15th, 2015

© 2022 The Writer(s). Licensee IntechOpen. This chapter is distributed nether the terms of the Creative Commons Attribution 3.0 License, which permits unrestricted use, distribution, and reproduction in whatever medium, provided the original work is properly cited.

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