Critique of Bp Australia's CSR Disclosures and Initiatives

Posted: August 11, 2016

The CSR Initiatives and Reporting Formats of BP Australia

Corporate social responsibility is a concept that is discussed and supported by businesses, government and the nongovernmental organizations to ensure that all the abovementioned are good commercial citizens. It is all about how corporate institutions protect the environment and how they serve the society. It involves how they are managed and how they balance social, environmental and economic effects of the corporate activities (Carol 731 – 757). The core objective of every company is to make profit but this cannot be achieved without the social support and that is why many companies are adopting CSR in Australia. The legislation in it has imposed obligations on how corporate organizations should pay minimum wages to employees. It is required that they comply with health and safety standards of their employees and giving equal treatment and opportunities to them. The corporate institution should report CSR according to Corporations Act (Carol 731 – 757). The main stakeholders of companies that uses CSR include the state communities in which the company operates, the local communities in which the company operates and the international community.

The BP Australia shows clearly how the corpora are motivated by CSR to have good reputation in the society so as to increase their profits and to comply with the government set rules and regulations. They have many initiatives that they use to increase their reputation in the society, such as undertaking programs of giving grants to the needy in the society, motivating the employees by improving their working conditions and giving better pay, this also help to stay away from CSR regulations (Coombs and Sherry, 124).

The organizations might get involved in the social activities to attract customers and get favors from the government but forget about their creditors and stakeholders. Some of them do not consider the cost they incur in these activities and do not account for some of activities that they carry out thus making their financial statement not to indicate what they use most as cash outflows. The expectations of the stakeholders end up not being met when the corporate organization gets involved much with the social, economical responsibilities (Coombs and Sherry, 124). The different people of Australia make it difficult for corporate institutions in the continent in implementing CSR because of their diversities.

The BP mostly uses sustainability reporting. The report looks at effects of the organization on the economies, environment and the societies it operates in. It also determines the ability of a corporate institution to continue to perform at a higher level in a competitive market, to contribute economically and socially in Australia in a meaningful and constructive manner. It is used also mostly to determine the future of the latter.

CSR Theories

Stakeholders’ theory: stakeholders of a company are the people that may affect a company or may be affected by the company directly and they include the employees, creditors, managers, local community, owners, suppliers, government, global community and the customers. The different stakeholders play different roles in the company and the company should balance them ensuring that no stakeholder takes precedence over others (Friedman and Miles, 1-21). Local community and employees play an important role since they are necessary for the long term growth of the company and are involved in its day to day activities. The theory advocate for a company to support the community as the stakeholders by building infrastructures such as schools and social amenities, the employees to be given safety at workplace and fair compensation, creditors to be paid their capital and interest as agreed, owners to receive their dividends, customers to be sold goods of quality, the global community to have fair trading conditions and the company should not evade taxes and should comply with the government set rules and regulations (Friedman and Miles, 1-21).

Legitimacy theory: this is a theory about a company and society relationship. A company always needs some inputs from the society so it has to have good and positive relationship with latter so that it has access to resources. It has to meet the social expectations by all means and if it does not, it is seen to be not legitimate, thus, endangering continued survival due to withdrawal of support and limiting of resources by stakeholders (Friedman and Miles, 1-21). This leads to limited access of resources that causes a decreased demand for its products by customers, increased regulations by the government, investors and shareholders stopping to invest in the company. The employees also may quit their jobs leading to bad reputation of the company.

The institutional theory: CSR in this theory is influenced mostly by the organizations businesses or the activities that are carried out. It explains the relationship between the environment that the firm operates in, competitors, regulators and its outcomes. The main aim of the theory is to explain how a company can show its operations and how they align with social and cultural values (Brammer and Matten, 3-28). CSR has isomorphism which is influenced by ambiguity of CSR goals, dependence of CSR functions to other units and uncertainty of means and ends relationship. This isomorphism is characterized by copying activities carried out by other institutions, pressure from a group’s cultural norm, and pressure from informal or formal societal expectations. All this leads to institutionalization of industries due to social reporting.

The firms deals with products that are need by the society as a whole and so the theories are all about them. In the case of stakeholders’ theory, these are the people who need to be informed of the day to day activities of a company. They also provide resources to the company and are the major consumers of its inputs so the company needs to disclose to them all its activities no matter the class of a stakeholder. The disclosure should include both positive and negative news and stakeholders should be left to make a decision based on this news without being intimidated by anyone. The institutional theory disclosure will inform the stakeholders on what industry does the organization fall in and the expected legislation regulations policies they are likely to face (Brammer and Matten, 3-28). Legitimacy disclosure will enable the society to understand why the institution needs a positive relationship with them, and make a decision on whether to help them access resources or to limit resources on them.

Human Resources Recommendation to CEO

The CEO should ensure that he is responsible for all the stakeholders’ welfare in the firm, see that all the set rules and regulations set by the government are adhered to because the failure in that may cause the firm to be restricted in carrying out some activities by the state. The employees should be given fair compensation and healthy and safe workplace. This will motivate them to produce more and stay for a longer period in the company (Grünewälde, 98). The global community should be offered fair prices and be encouraged to trade with the company. All the persons in the organization should be respected and treated fairly. This will bring confidence and loyalty towards the firm. The director should ensure that the culture of the community in which it operates accepts their activities and that it is able to cope with their living standards. This will lead to good relationship between them and the community thus much consumption of their products.

The Environment Recommendation

Environment is the physical surrounding in which a company exists and should be protected. The CEO should ensure that all the activities are aimed at conserving the environment. He should ensure that the culture of the society that the organization is based in is not affected by its activities negatively because it can lead to customers not buying their products or even limiting it from accessing resources (Campbell, 946–967).

Emissions are chemical products that can be released during production period of a company. The CEO should ensure that final products do not emit harmful gases because this may endanger human life and that of animals. The environment is used for acquiring raw materials needed by a company, for livelihood of people in the society and also for feeding some animals. The CEO should ensure that it is protected from degrading (for example, dumping harmful wasted materials) (Campbell, 946–967).

Water is termed as life by many people because it is used in all the activities that are carried out by humans. It is also a living place for aquatic animals. The CSR director should ensure that the water is not left to flow and should adopt methods of conserving it (Campbell, 946–967). He should also ensure that waste materials are not released to water bodies because this can kill Aquatic animals. The company should embrace methods of recycling water for further uses.

Conclusion

CSR is a concept that is bringing about social, economical and environmental growth in Australia. It is proving competition among companisies leading to quality and sufficient production of products that a need by people in their daily lives. It is providing social and environmental information as well as voluntarily activities to the community. Stakeholders’ theory, legitimacy theory and institutional theories are motivating corporate factors that make them to have good relationships within themselves and the society (Leonard and McAdam, 27-32).

The reporting is helping organizations to disclose important information to the society, thus, increasing their awareness of most general things, such as the current prices of certain commodities. The government is also setting rules that limit some of the activities that organizations are involved in (Leonard and McAdam, 27-32). CSR in general is an important tool for an organization that is aiming at achieving much profit from customer satisfaction.

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