Lenovo’s global supply chain and corporate social responsibility
Large part of the global trade is conducted through systems of governance. The pressure is exerted on the multinational companies from both internal and external stakeholders such as customers, employees, shareholders which makes it difficult for the company to hide unethical practices such as use of child labor, violation of union rights and dangerous working conditions.(referencing case) The most viable element in the approach of multinational company is the employment of code of conduct. Lenovo is consistently working to improve its business while contributing to the development of society by being socially responsible. The company embraces the values of customer satisfaction, innovation, operational excellence and trustworthiness. Lenovo is focusing on the employee welfare by providing them safety and healthy working environment. They are focusing on the production process and control to prevent work hazards, injury or illnesses. (referencing link)
However despite many efforts of the company in engaging in the corporate social responsibility, there is often a gap between the ethical standards expressed and the actual conditions at the suppliers. The contingency factors can influence the CSR in the supply chain. These factors involves four mechanism; knowledge controlling mechanism, knowledge enhancing mechanism, firm's specific asset and corporate history.(referencing case Elaboration needed)
Vast companies such as Lenovo treat their reputation and image deeds with an utmost importance and delicacy. The company has to make sure that both customers and employees are willing to engage with the company, without stepping out of their comfort zone and that it delivers valuable experience, therefore the organization has to concentrate on aspects of Corporate Social Responsibility. Corporate social responsibility (CSR) can be defined as “…a duty of every corporate body to protect the interest of the society at large. Even though the main motive of business is to earn profit, corporates should take initiative for welfare of the society and should perform its activities within the framework of environmental norms.” ()
Lenovo’s Corporate and social responsibility aspects are encapsulated in the company’s mission statement:
“At Lenovo, our vision is that Lenovo will create personal devices more people are inspired to own, a culture more people aspire to join and an enduring, trusted business that is well respected around the world. This vision guides us in pursuit of our mission to become one of the world's great personal technology companies.” ()
The company has been striving towards the accomplishment of their goals through aspiring people to get engaged with the organization, and one of the brightest examples of that is Lenovo’s campaign, which resulted in over 4 million people in rural areas of China being provided with Lenovo PC’s over the past 5 years. ()
According to one of the prior researches conducted in order to assess pre-requisites for successful CSR, the most important factor of achievement is customer’s awareness of organisation’s initiatives, which can directly influence consumer behaviour. To create that responsiveness the company should focus on communicating its activities to the customers that the organisation wants to target. ()
In addition, as stated by Kasper Ulf Nielsen: “…people’s willingness to buy, recommend, work for, and invest in a company is driven 60% by their perceptions of the company, and only 40% by their perceptions of the products.”( )
The triple bottom line
There are three components of the organizational sustainability: natural environment, society and economic performance. At the interaction of these three components their are activities which will have positive affect on the environment and society and will also result in long term economic benefit and competitive advantage for the firm.
There were some other aspects of sustainability which emerged later in the literature work. Some of them were the risk management, transparency, strategy and culture. Shrivastava (1995) advocates that an organization must manage not only short term financial results, but also risk factors such as harm resulting from its products, environmental waste and workers and public safety.( Gladwin, 1995). Supply chain risk management can occur through contingency planning and by building more agile supply chain. The transparency is driven by the rapid speed of communication via the internet and satellite television ( Elkingston, 1998) as well other factors such as interoperable software and globalization of supply chains which have led to 'flat world' ( Friedman, 2005).So maintaining the secrecy of corporate wrongdoings has become very difficult and extremely risky. (Holliday, 2002) The transparency includes not only reporting to the shareholders but actively engaging stakeholders and using their feedbacks and input to both secure buy-in and supply chain process.( Rivera-camino, 2007) The strategy and culture should be closely interviewed, rather than separate programs that are managed independently (Shrivastava, 1995)
NEW research facility investment 18 nov 2013:
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