MNEs, CSR and Management Systems

Transcription

1 MNEs, CSR and Management Systems

2 Corporate Social Responsibility Environment Globalization of disaggregated supply chains Emergence of global brands Developing countries labour problems linked to developed country products

3 Questions for Companies What is the situation we as a company face and could face in the future? Who is responsible for our suppliers? What is best for the workers and their communities? What is the role of workers, govts, NGOs? What should the world community govts, business, trade unions, NGOs, IGOs do?

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5 U.S. court nails company that used forced prison labor in China Deutsche Presse-Agentur (3/1/01) November 27, 2000

6 Increasingly violent protests against globalization at world trade and other international meetings from Seattle to Genoa have put big business on guard. The San Francisco Chronicle November 21, 2001

7 Codes of Conduct Parallels growth of global supply chains Driven by exposés, protests, and damage to reputations Have a relatively short history Many things to many people Typically environment and labour focused

8 Labour Issues Most common Code Provisions address: Forced Labour Child Labour Discrimination Harassment Freedom of Association Working Hours / Overtime Occupational health, safety and environment

9 Labour Issues Most common Code Provisions address: Forced Labour Child Labour Discrimination Harassment Freedom of Association Working Hours / Overtime Occupational health, safety and environment

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12 Research Questions What are the management systems that enterprises use at MNE and supplier levels to set, communicate, implement, and evaluate progress in attaining social objectives? How are management systems relating to social performance linked between MNE and supplier levels, and how do they interact?

13 roject methodology ulti-phased Approach Sector 1 Sports Footwear Sector 2 Apparel Sector 3 Retail Sector Final Report

14 Headquarters Functional Areas in HQ MFRG LOGISTICS PROCUREMEN T MARKETING Buyer Country and Regional- Level Operations Field Operations / Suppliers Suppliers Factory FINANCE HRM COMPLIANCE (CSR) GROUP CROSS-ORG PROCESSES Employees, Workers Reps and Unions Operating Environment: Governments, Workers and Employers Representative Organizations, ILO, Civil Society, Others

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17 The Framework Interrelation and Integration of Elements Creating a Shared Vision Developing Understanding and Ability Integrating Code in the Organization Feedback, Improvement and Remediation Dialogue with Employees, Unions and Workers Reps Dialogue with other Stakeholders

18 Creation of a vision Commitment at all levels (especially top management) Vision is company-specific and unique to competitive situation Values based on international standards and company core ideology Based on a business case Input and feedback from stakeholders

19 Developing understanding and ability Need to build understanding at all levels Training: - Who? Consider those that have power to make decisions and requisite change Topics? Consider culture, education levels and skills Cost? Consider your entire supply chain

20 Integration into operations R&D Planning Marketing Order Management Sales Inbound Logistics Physical Distribution Outbound Logistics Procurement / Sourcing Supplier Finance Customer

21 Integration into strategies and practices Provide the tools Guidelines, training materials Convert field personnel They are the front line Link rewards and responsibility goals Share best practice Within company Among suppliers

22 Integration into strategies and practices Make it a clear priority with all components of the supply chain Communicate, communicate, communicate Training for everybody No Rome in a Day strategy

23 Feedback, improvement and remediation systems Improvement: remediation, innovation, and learning Measurement systems Transparency and accountability for results and impacts Results: Performance, Stakeholder, and Ecological Outcomes and Responsibility

24 Remediation and learning systems Indicators: Measurement system Monitoring and transparency Provide feedback Zero tolerance versus improvement Responsibility improvement

25 Is it a matter of geography?

26 Retail sector lags behind others in code implementation Percent MNEs requiring code % 81% 15% 0 Footwear Apparel Retail -

27 Training is limited % MNEs that provide training 100% % MNEs train internal MNE staff on code MNEs train Supplier Management on code MNEs train workers on Code 25% 10 0 Footwear Apparel Retail - hard goods

28 CSR group not a separate department 100% 100% 100% Individual or group responsible for Code Code group separate from manufacturing function Percent with code groups 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% 66% 57% Footwear Apparel Retail 90% 10%

29 Structures of CSR field staffing MNE headquarters management Regional Compliance Manager: Amercias Regional Compliance Manager: Europe Regional Compliance Manager: Asia Local compliance rep Local compliance rep Local compliance rep Local compliance rep Local compliance rep

30 Key learnings Sector 1 Footwear sector Market concentration Leverage (size) Systematic approach rep in facility Top management commitment vital Training Role of quality

31 Key learnings Sector 2 Apparel sector Diversity/multiplicity of approaches Diluted leverage smaller production Cost of monitoring Lean production Export vs. domestic production

32 Key learnings Sector 3 Retail sector Diversified product Brand importance Soft goods vs. hard goods Lean retailing

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34 What is needed? Sharing of knowledge and experience Increased capacity at the factory level Training of both workers and managers Greater integration at the factory level

35 What is the ILO doing? Factory Improvement Programme / Worker-Manager Factory Improvement Programme Cambodia Garment Sector Project - Monitoring and remediation Global Compact Other enterprise level projects Research

36 The Japanese context What does CSR mean? Providing excellent products % Respect for human rights % Based on a 2002 survey of the Japan Association of Corporate Executives More research, education needed Wakon Yosai Western knowledge with Japanese spirit

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