Global Corporate Governance and Social Responsibility (Using Toyota)

Although equated to philanthropic activities, today’s investment by corporations such as Toyota in pro-social programs seek to create a social impact beyond building customer loyalty. With the society experiencing a myriad of issues, among them environmental sustainability and health issues, assuming an active role in activities of social contribution help enrich the host society. The focus of investing in corporate social responsibility traces to the pursuit of generating corporate value through increased business opportunities while enhancing the quality of social life. Channeling increased corporate commitment and resources to environmental and social responsibility yields strategic advantages upon which the organization can expand their business scope (Lawrence & Weber, 2011). For that reason, it is evident that emphasizing a larger market presence and higher profits while disregarding the social value of the consumers, compromises the reputation of the corporation and thus denying its global competitiveness. However, accumulating corporate power of multinational corporations emerges from ethical conduct of their businesses to enhance the well-being of their host societies.

Toyota Corporate Philosophy

With the emergence of globalization, has come the multinational power arising from their large resources under their control. Similarly, their improved capacity to shift resources to locations where they are most profitably utilized leaves them as important political factors, which mandates them to bear social responsibility beyond compliance with the provisions of the law. CSR involves all voluntary operations undertaken by companies to integrate social contribution and their core business activities (Jaakson, Reino, & Mo˜tsmees, 2012). Alike other companies desirous of fulfilling their social contributions to their global community, Toyota pursue a balanced business portfolio comprising Mobility, Life and Community, and Earth and Resources domains.

Besides enriching the society through its auto-mobile manufacturing supply chains, Toyota has embraced a global policy to back up its mind-set of building an auto-mobile society. This construes with Lawrence& Weber (2011) perspective, that attaining brand loyalty and winning global consumers from their rivals, requires embracing positioning strategies that does not translate into excessive profits at the expense of the well-being of their stakeholders. The focus of the corporation in social contribution operations aligns with its corporate philosophy stating, “Living and prospering together with people, society and the earth.” From it, Toyota derives three themes for its CSR policy, including the education, environment and welfare, which guide its consolidated subsidiaries to contribute towards creating a prosperous society. Converse with other companies terming CSR as special initiatives, the Toyota Tsusho Group regards it as a standalone business management through which it governs its activities in implementing environmental and social contribution program (Shimizu, 2010).

In an effort to ensure all businesses of the corporation uphold their positive contribution to the society; its CSR policy recognizes the impact of their operations to trigger environmental problems. The policy seeks to harmonize all operations of Toyota industries into a single platform that minimize harmful environmental impact from both their direct manufacturing facilities and their final products. Specifically, Toyota collaboratively examines environmental issues by involving people living in the host communities to help it accomplish sustainable growth of the immediate society. This ensues from the increasing awareness of the costs attributed to harmful environmental issues and the call for integrating environmental efforts into the corporate strategies(Sindhi & Kumar, 2012). This implies that despite experiencing pressure from external factors, including regulation, market pressure and increased stakeholder pressure, alongside self-regulation, organizations should utilize internal factors to attain responsible environmentalism. In view of that, Toyota sustains its environmental program by building cooperative relationships through a broader spectrum of parties gearing towards environmental preservation (Toyota, 2014).

Corporate environmentalism emerges when the organization embraces sustainability to create a positive impact on the immediate environment. Accomplishing this environmental responsibility involves engaging stakeholders in environmentally friendly actions beyond the legal requirements and voluntarily internalizes externalities (Lyon & Maxwell, 2008). It makes sense in conducting environmental initiatives owing to multifarious benefits including social legitimation, improved public image, efficient utilization of natural resources and reduced pollution fines and sanctions (Sindhi & Kumar, 2012). With this realization, Toyota initiated a comprehensive program to sustain environmentalism. The company basis this to its guiding principle seeking to reduce harmful effect resulting from their vehicles and working with operations that reduce adverse climate changes and promotes biodiversity. However, the group attains this by developing and promoting the use of technologies that facilitate harmonious coexistence of environmentalism and its economic prosperity (Toyota, 2014).

While embracing corporate commitment to environmental responsibility, it is vital to acknowledge the presence of driving forces towards global environmentalism and green consumerism. Sindhi & Kumar (2012) recognizes that though organizations may not respond to pressure forcing environmentalism institutional forces and organizational dynamics tightly link together. This manifests itself in the Toyota environmental action plans. Firstly, this involves establishing low-carbon societies attained through reduced CO2 emissions, eco-driving initiatives, environmental technology, utilization of renewable energy and developing low-carbon production solutions. Besides a commitment to establish a recycling society, the environmental protection plan seeks to generate manufacturing facilities in harmony with the immediate nature. This takes the forms of afforestation at manufacturing sites, biodiversity guidelines and expanding the environmental grant program. Lastly, Toyota environmental framework involves eco-vehicle assessment systems, green-purchasing guidelines and incorporating environmental awareness framework in the central management of its businesses (Toyota, 2014).

Toyota emphasizes corporate citizenship in all its operations spanning across programs on improving social lives, rebuilding impoverished areas of host communities and promoting intimate activities to inspire the society.This seeks to avert unethical tendencies perpetrated against the social well-being. Ultimately, committing to initiatives deriving social contribution underscores the foundation of corporate citizenship, essential to retain the success amidst aggressive competition (Okoro, 2012). In tandem with that rationale, Toyota aspires to help the wider community by pursuing initiatives where their employees execute its CSR policy. Here, it incorporates customer views and opinion provided by members of the local community in pursuing their business. This enables the corporation attain social contribution by actively promoting and collaborating with both organizations and individuals, strengthening communities (Toyota, 2014).

The corporation retains a global vision based upon its entrepreneurial spirit, embraced since its inception, prioritizing its desire of attaining positive contributions to the host communities rather than a prime pursuit for its financial objectives. As a result, all businesses streamline their objectives of providing better products to engage actively with community development initiatives. This serves a vital foundation assisting all business activities get local acceptance from the community members. With most of its family of businesses facing mounting public awareness and pressure to convert social interests to corporate behaviour, its visionary management aims to eliminate contradiction between Toyota’s sustainability and the health of local community development programs (Toyota, 2014). This necessitates pegging first line results of making better cars to the corporation founding principle requiring all auto-mobiles to contribute to the society.

Sustaining social contribution by a corporation involves executing initiatives yielding social gain beyond what the communities obtain from the core operations of the organization.Parallel to the struggle to accomplish sustainable growth of its businesses, Toyota performs the role of good citizenship by assisting the immediate community realize a healthy society. Toyota industries contribute proactively through expertise, funds and volunteer activities. The corporation development of the local communities to ensure society members attain active lives is attained through social welfare programs. These include engaging with persons with disability and conducting joint fund-raising through its consolidated subsidiaries (Toyota, 2014). Okoro (2012) asserts that global corporations operating through foreign businesses and joint ventures need to conduct their businesses through ethical mechanisms and promote the well-being of host societies.

All Toyota industries demonstrate their commitment to social contribution through their CSR policy structure ingrained in the corporate administration framework. Specifically, Toyota promotes social contribution programs through its CSR committee mandated to generate activities while its Social Contribution Group initiatives of executing such activities (Toyota, 2014). Toyota supports this framework through a three-pillar structure comprising youth development, nature conservation and social welfare. In addition to its global environmentalism project in conserving forest cover at Kaisho forest, employees voluntarily contribute to social well-being by undertaking activities promoting healthy growth for community members residing in children’s homes. As the global social structures undergo profound transformations, Toyota blends its social contributions with its main businesses to generate both corporate value from increased investment opportunities and creation of prosperous communities. This arises through activities such as sponsoring youth activities near Kirloskar Textile plant, engaging its employees in local sports activities, plant tour at its European headquarters in Sweden and charity events to fund-raise cancer research (Toyota, 2014).

Conclusion

Embracing corporate social responsibility in its organizational culture enables, the corporate framework integrate its core business operations with initiatives promoting social values of the local communities. This arises from providing voluntary interactions with stakeholders living in the immediate environs, which link to its business objectives and sustain its leadership ahead of the external pressure to promote social values. Such is illustrated by Toyota corporate responsibility to make a positive contribution through environmentalism initiatives, green consumerism and social welfare programs. Considering the extensive list of issues affecting the contemporary society, among them environmental sustainability and health issues, assuming an active role in activities of social contribution help enrich the host society.

References

  • Jaakson, K., Reino, A., & Mo˜tsmees, P. (2012). Is there a Coherence between Organizational Culture and Changes in Corporate Social Responsibility in an Economic Downturn? Baltic Journal of Management, 7(2), 202-216.
  • Lawrence, A., & Weber, J. (2011). Business and Society: Stakeholders, Ethics, Public Policy (13 ed.). New York: McGraw-Hill Irwin.
  • Lyon, T., & Maxwell, J. (2008). Corporate Social Responsibility and the Environment: a Theoretical Perspective. Review of Environmental Economics and Policy, 2(2), 240-60.
  • Okoro, E. (2012, August). Ethical And Social Responsibility In Global Marketing: An Evaluation of Corporate Commitment to Stakeholders. International Business & Economics Research Journal , 11(8).
  • Shimizu, J. (2010, December). CSR Report 2010: Create New Value and Contribute to the Creation of a Sustainable Society Even in Times of Great Change. Retrieved February 03, 2014, from www.toyota-tsusho.com
  • Sindhi, S., & Kumar, N. (2012). Corporate Environmental Responsibility- Transitional and Evolving. Management of Environmental Quality, 23(6), 640-657.
  • Toyota. (2014). Toyota’s CSR Concepts: Contribution Towards Sustainable Development. Retrieved February 03, 2014, from http://www.toyota-global.com/sustainability/csr_initiatives/csr_concepts/policy.html
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