CORPORATE SOCIAL RESPONSIBILITY

CORPORATE SOCIAL RESPONSIBILITY

 Abstract

The project provides an understanding of benefits of corporate social responsibilities in business operations. Johnson & Johnson has been selected here to understand the benefits of CSR communication in business. Website and CSR reports of the organization are used as a communication medium to inform people regarding CSR activities of business. In this study, website and CSR reports of the company has been analyzed for understanding corporate responsibilities of the company. It has been observed that the company is following go green initiative and using renewable sources of energy to increase its brand reputation. A case study of baby powder of the company has been considered to understand the business challenges of the company. Profitability of the company has been reduced due to issues in baby products. Lack of dialogue and corporate responsibilities of the company have been discussed in the study along with their impact on brand reputation. The company is using empty boasting to inform about its CSR activities; however, it is not following the actions properly. Renewable sources of energy and technology of the company helps in reducing negative impact of business on society and environment. Ethics and code of business conducts can help in improving brand reputation of the company and increasing business sustainability.

1. Introduction

Organization needs to focus on ethics and code of conducts at the time of running their business. These ethics and code of conducts are included in CSR and it helps in increasing sustainability of business. In this study, corporate social responsibility of Johnson & Johnson has been discussed along with its website evaluation. The company has been improving health of people across the world for 133 years through its products and services. CSR communication is required by the organization for the benefits of society and environment through its products. Impact on reputation of organization through empty boasting has also been explained here.

2. Evaluation and Analyzing CSR activities of Johnson & Johnson

2.1 Evaluation of website of the company

Website of the company provides knowledge regarding its CSR activities. It has been found that the company is focusing to improve the health of people at any age through its services and products. 130,000 employees of the company are focusing to provide better quality of products to people to keep them healthy (Jnj.com, 2019). It is focusing on society and environmental benefits more than profitability of business. Latest technology and renewable sources of energy are used in the business operations to reduce the negative impact of business on the society and environment. These initiatives have helped in increasing brand reputation of the company [Refer to Appendix 1].

2.2 Analyzing CSR activities of Johnson & Johnson

As per CSR reports of the company, it follows the ethical values and codes of conduct at the time of running business across the world. Various business challenges have been found in the CSR report such as issue in product liability and reduction in market rate (Jnj.com, 2019). A case of baby powder has been discussed in the CSR report in which the organization has paid around $4.7 billion to 22 women facing ovarian cancer due to application of the powder of the company (Thesun.co.uk, 2019). It has started focusing on ingredients of products to manage its brand reputation in the market [Refer to Appendix 2].

3. Communication regarding CSR

Introduction

CSR communication is considered as an effective approach to anticipate expectations of stakeholders and articulating policy of CSR. Johnson & Johnson is using communication tools to provide information to nature organization regarding CSR.

3.1 Benefits of CSR communication

Johnson & Johnson is running its business across the world for last 133 years and it has earned a strong brand reputation. Around 130,000 employees of the company are on the process of changing health trajectory for humanity. The company is thinking about the benefits of society at the time of running its business. As stated by Agudelo et al. (2019, p.1), CSR communication helps in understanding the expectation of stakeholders and provides them appropriate products and services. Appropriate CSR communication helps in enabling a company to stay ahead and increase the brand value. In accordance to Belal (2016, p.16), an organization cannot earn a great reputation for the brand if it is thinking only about the benefits of business rather than society and country. The focus of Johnson & Johnson is to keep people healthy at any age through its products and services.

Figure 1: Benefits of CSR communication

(Source: Created by the researcher)

The company uses renewable energy sources for the protection of environmental resources. It provides training to employees to not harm environment through the business activities. Latest technology is used by the organization for manufacturing health products and reduces negative impact of business on the environment. As commented by Dyck et al. (2019, p.700), customers are considered chief stakeholders responsible for increasing brand value of an organization. The high brand value of the company has helped in dealing with business challenges. In this modern era, people want to use the brand is beneficial for society and for the environment as well (Sulphey, 2017, p.300). Johnson & Johnson is using its website, social media and CSR reports for communicating with people about its responsibilities towards society and environment.

Conclusion

Johnson & Johnson is considered among the world’s largest health care company due to its appropriate services to people. Due to its effective services to people, it has successfully expanded its business across the world.

4. Lack of dialogue

Introduction

It has been discussed in the previous section that appropriate CSR communication of Johnson & Johnson helps in increasing brad reputation. In this study impact of lack of dialogue on the company has been discussed.

4.1 Impact on business due to lack of dialogue and CR

Lack of corporate responsibilities in organization can damage the brand reputation and reduce the sustainability of business (Russell et al. 2016, p.770). In case there is lack of communication in the organization, it can face difficulties in managing corporate responsibilities. It has been found that 22 women have claimed that baby powder of the company is causing ovarian cancer (Thesun.co.uk, 2019). This issue has been occurred due to inappropriate communication and corporate responsibilities of the organization. From the case of baby powder, it can be said that customers have the ability to damage the brand reputation of an organization. With the help of social media, customers can post their negative responses against inappropriate products and services (Shaukat et al. 2016, 580). Johnson & Johnson can manage the business consequences by aligning its identity with image.

Figure 2: Impact on business due to lack of dialogue and CR

(Source: Created by the researcher)

The company has built strong brand reputation due to its continuous had work of 133 years. As influenced by Grayson and Hodges (2017, p.16), once the brand value of an organization is destroyed, it is difficult to get it back. Due to the incident of baby powder in the organization, profitability of the company has been reduced. It has paid around $4.7 billion to women due to inappropriate ingredients in the baby powder. In accordance to Leiva et al. (2016, p.300), customers do not want to use the products and services of an organization if the business is damaging environment and not helpful for the society as well. Johnson & Johnson needs to follow the ethics and code of conducts to understand its responsibilities and improve business operations for the benefits of the society and environment.

Conclusion

Communication and corporate responsibilities are required to improve brand reputation of organization. Johnson & Johnson can manage the business challenges if it starts focusing on ethics and codes of conducts required for business.

5. Dangers of CSR and the empty boasting

Introduction

In the previous section, lack of dialogue and corporate responsibilities has been discussed. In this study, empty boasting and its impact on brand reputation have been explained along with corporate scandal of the company.

5.1 Reputation and the empty boasting

Empty boasting is to inform the actions and activities of business in front of stakeholders, rather than actually following the actions in business. As stated by Ramakrishnan et al. (2016, p.17), it has been observed that some organizations only post in their website regarding CSR activities; however, their corporate responsibilities are not up to the mark. According to CSR report of Johnson & Johnson, it has been found that it has started focusing on ingredients of the products after the incident of baby powder. The company needs to implement the ZCSR activities in business rather than using the actions as empty boasting.

5.2 Corporate scandal 1

Johnson & Johnson has faced various challenges in business related to patents, claims and product liability. Due to these issues, the band reputation of the company has been damaged. It has also faced debt securities issues in 2017 and in order to avoid the challenge, it has filled a new shelf registration (Jnj.com, 2019).  It has also faced $69 million loss due to reduction in market rate in 2018 (Jnj.com, 2019).

5.3 Corporate scandal 2

In July 2018, it has been claimed against the organization by 22 women that the ovarian cancer is developing due to the application of baby powder of the company (Thesun.co.uk, 2019). Due to this issue, the sale of the products of the organization has been dropped from 127.45 to 124.65 billion in mid-July (Thesun.co.uk, 2019). The powder is composed of oxygen, magnesium and silicon and these materials have been impacting negatively on the body of women.

Conclusion

Due to the various business challenges faced by the company, brad reputation has been impacted negatively. By focusing on corporate responsibilities, it can regain its brand value again in the market.

6. Conclusion

It can be concluded from the study that corporate responsibilities are helpful for increasing brand reputation of organization. Johnson & Johnson has faced various business challenges due to product challenges, reduction in market rate and product liability issue. As per website of the company, it is focusing to help people in living healthy age at any age. According to CSR report of the company, it is using renewable sources of energy and technology to reduce the negative impact of business operations on society and environment. Empty boasting is impacting negatively on the brand reputation of Johnson & Johnson.

7. Recommendation

It can be recommended to organization to follow the ethics and code of conducts in business. It is necessary for the organization to focus on benefits of environment and society more than business profitability to increase sustainability of business. By improving CSR communication, it can regain its brand value that has been reduced due to the incident of baby powder.

References

Agudelo, M.A.L., Jóhannsdóttir, L. and Davídsdóttir, B., 2019. A literature review of the history and evolution of corporate social responsibility. International Journal of Corporate Social Responsibility4(1), p.1. Available at: https://link.springer.com/article/10.1186/s40991-018-0039-y [Accessed on: 29 June 2019]

Belal, A.R., 2016. Corporate social responsibility reporting in developing countries: The case of Bangladesh. Abingdon: Routledge.

Dyck, A., Lins, K.V., Roth, L. and Wagner, H.F., 2019. Do institutional investors drive corporate social responsibility? International evidence. Journal of Financial Economics131(3), pp.693-714 [Online]. Available at: https://www.sciencedirect.com/science/article/pii/S0304405X18302381 [Accessed on: 29 June 2019]

Grayson, D. and Hodges, A., 2017. Corporate social opportunity!: Seven steps to make corporate social responsibility work for your business. Abingdon: Routledge.

Jnj.com (2018), Annual Report, Available at: http://www.investor.jnj.com/annual-meeting-materials/2018-annual-report [Accessed on: 29 June 2019]

Jnj.com (2019), CSR, Available at:  https://www.jnj.com/caring [Accessed on: 29 June 2019]

Leiva, R., Ferrero, I., and Calderón, R. (2016). Corporate reputation in the business ethics field: Its relation with corporate identity, corporate image, and corporate social responsibility. Corporate Reputation Review, 19(4), 299-315. Available at: http://dx.doi.org/10.1057/s41299-016-0008-x

Ramakrishnan, S., Hishan, S. S., and Kanjanapathy, M. (2016). Corporate social responsibility in malaysian apparel manufacturing industry: A study on corporate social responsibility website reporting. International Review of Management and Marketing, 6(4).  Available at: https://search.proquest.com/docview/1796229908?accountid=188056

Russell, C. A., Russell, D. W., & Honea, H. (2016). Corporate social responsibility failures: How do consumers respond to corporate violations of implied social contracts?. Journal of Business Ethics136(4), 759-773. Available at: https://s3.amazonaws.com/academia.edu.documents/48268500/Implied_Social_Contract_and_Civil_Regulation_of_Corporate_Behavior.pdf?response-content-disposition=inline%3B%20filename%3DCorporate_Social_Responsibility_Failures.pdf&X-Amz-Algorithm=AWS4-HMAC-SHA256&X-Amz-Credential=AKIAIWOWYYGZ2Y53UL3A%2F20191002%2Fus-east-1%2Fs3%2Faws4_request&X-Amz-Date=20191002T045503Z&X-Amz-Expires=3600&X-Amz-SignedHeaders=host&X-Amz-Signature=ab10996fc3a039c8baf79441ad69900fd13d8aca36987ebd39e4f6f2b7b44b5c

Shaukat, A., Qiu, Y., and Trojanowski, G. (2016). Board attributes, corporate social responsibility strategy, and corporate environmental and social performance: JBE JBE. Journal of Business Ethics, 135(3), 569-585. Available at: http://dx.doi.org/10.1007/s10551-014-2460-9

Sulphey, M. M. (2017). Corporate social responsibility or corporate social irresponsibility: Where should be the focus? Problems and Perspectives in Management, 15(4), 293-301. Available at: http://dx.doi.org/10.21511/ppm.15(4-1).2017.13

Thesun.co.uk (2019), Issues, Available at: https://www.thesun.co.uk/news/3506164/talcum-baby-powder-johnson-johnson-cancer-lawsuit/ [Accessed on: 29 June 2019]

Appendices

Appendix 1: Website evaluation

1. Company name:Johnson & Johnson

 

2. Industry type:Medical equipment
Pharmaceutical

 

3. Is there a CSR department?R  Yes£ No

 

4. What is it called?Societal impacts

 

5. Is there a CSR Report for 2018? R  Yes£ No

 

6. Is it available on the website?R  Yes£ No

 

  1. Corporate Social Responsibility in Action. Which social change activities does the company engage in? Identify activities from each relevant category.
CSR activityR OR  QActivity
a.    EnvironmentRUsing renewable sources of energy
b.    Consumer responsibilityRIt is helping customers to access the information easily through online.
c.    CommunityRIt is focusing for the benefits of society by making the information easily accessible.
d.    Employee relationsRIt focuses on improving employees’ relation for the benefits of business.
e.    IndigenousREthical values and codes of conducts are followed by the organisation.
f.     DiversityRIt is providing its products and services across the world.

 

8. How ‘green’ is the website?Green website of the company providing CSR information to people.

 

9. How ‘green’ is the company?The company is focusing on society and environment rather than its profitability.

 

10. CSR indices/rankingsIt is among top 10 positions in the CSR.

 

(Source: Created by researcher)

 Appendix 2: Analysis of CSR report

  1. Describe the form and content of the CSR report:
As per CSR report of Johnson & Johnson, it has been observed that the company is focusing to improve the health of people at any age through its products and services.

 

  1. Who is the report designed for?
ConstituencyR OR  QKey message
a.    InvestorsR
b.    Employee presentR
c.    Employees futureR
d.    AcademicsR
e.    Community activitiesR
f.     Public officialsR
g.    Corporate managersR
h.    OtherR

 

  1. How thorough and credible is the report?

 

Report elementsR OR  Q
a.    Is this a CRS report?R
b.    Does the report provide details on CSR practices as well as policies?R
c.    Does the CSR report provide systematic data?R
d.    Does the company report data in a comparable form?R
e.    Does the report present future goals as well as past practices?R
f.     Does the report include bad news as well as good news?R
g.    Does the report address the company’s greatest CSR challenges?R
h.    Does the company integrate CSR reporting with its traditional business strategy and its financial reporting?R

 

  1. Identify the key elements of the report

 

Healthy life, challenges in business, issue of baby powder.

 

  1. Identify two sustainability initiatives for 2018 (or 2019 if details available)

 

Improving quality of products, using latest technology

 

(Source: Created by researcher)

 

 

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