fulfilling contractors’ corporate social responsibilities using standards-based management systems

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This article was downloaded by: [University of New Mexico] On: 22 November 2014, At: 13:37 Publisher: Taylor & Francis Informa Ltd Registered in England and Wales Registered Number: 1072954 Registered office: Mortimer House, 37-41 Mortimer Street, London W1T 3JH, UK International Journal of Construction Management Publication details, including instructions for authors and subscription information: http://www.tandfonline.com/loi/tjcm20 Fulfilling Contractors’ Corporate Social Responsibilities using Standards-Based Management Systems Alan Griffith a a Department of the Built Environment, Sheffield Hallam University, Sheffield, S1 1WB, UK Email: Published online: 10 Feb 2014. To cite this article: Alan Griffith (2011) Fulfilling Contractors’ Corporate Social Responsibilities using Standards-Based Management Systems, International Journal of Construction Management, 11:2, 37-47, DOI: 10.1080/15623599.2011.10773167 To link to this article: http://dx.doi.org/10.1080/15623599.2011.10773167 PLEASE SCROLL DOWN FOR ARTICLE Taylor & Francis makes every effort to ensure the accuracy of all the information (the “Content”) contained in the publications on our platform. However, Taylor & Francis, our agents, and our licensors make no representations or warranties whatsoever as to the accuracy, completeness, or suitability for any purpose of the Content. Any opinions and views expressed in this publication are the opinions and views of the authors, and are not the views of or endorsed by Taylor & Francis. The accuracy of the Content should not be relied upon and should be independently verified with primary sources of information. Taylor and Francis shall not be liable for any losses, actions, claims, proceedings, demands, costs, expenses, damages, and other liabilities whatsoever or howsoever caused arising directly or indirectly in connection with, in relation to or arising out of the use of the Content. This article may be used for research, teaching, and private study purposes. Any substantial or systematic reproduction, redistribution, reselling, loan, sub-licensing, systematic supply, or distribution in any form to anyone is expressly forbidden. Terms & Conditions of access and use can be found at http:// www.tandfonline.com/page/terms-and-conditions

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Page 1: Fulfilling Contractors’ Corporate Social Responsibilities using Standards-Based Management Systems

This article was downloaded by: [University of New Mexico]On: 22 November 2014, At: 13:37Publisher: Taylor & FrancisInforma Ltd Registered in England and Wales Registered Number: 1072954 Registered office: MortimerHouse, 37-41 Mortimer Street, London W1T 3JH, UK

International Journal of Construction ManagementPublication details, including instructions for authors and subscription information:http://www.tandfonline.com/loi/tjcm20

Fulfilling Contractors’ Corporate SocialResponsibilities using Standards-Based ManagementSystemsAlan Griffitha

a Department of the Built Environment, Sheffield Hallam University, Sheffield, S1 1WB,UK Email:Published online: 10 Feb 2014.

To cite this article: Alan Griffith (2011) Fulfilling Contractors’ Corporate Social Responsibilities usingStandards-Based Management Systems, International Journal of Construction Management, 11:2, 37-47, DOI:10.1080/15623599.2011.10773167

To link to this article: http://dx.doi.org/10.1080/15623599.2011.10773167

PLEASE SCROLL DOWN FOR ARTICLE

Taylor & Francis makes every effort to ensure the accuracy of all the information (the “Content”) containedin the publications on our platform. However, Taylor & Francis, our agents, and our licensors make norepresentations or warranties whatsoever as to the accuracy, completeness, or suitability for any purpose ofthe Content. Any opinions and views expressed in this publication are the opinions and views of the authors,and are not the views of or endorsed by Taylor & Francis. The accuracy of the Content should not be reliedupon and should be independently verified with primary sources of information. Taylor and Francis shallnot be liable for any losses, actions, claims, proceedings, demands, costs, expenses, damages, and otherliabilities whatsoever or howsoever caused arising directly or indirectly in connection with, in relation to orarising out of the use of the Content.

This article may be used for research, teaching, and private study purposes. Any substantial or systematicreproduction, redistribution, reselling, loan, sub-licensing, systematic supply, or distribution in anyform to anyone is expressly forbidden. Terms & Conditions of access and use can be found at http://www.tandfonline.com/page/terms-and-conditions

Page 2: Fulfilling Contractors’ Corporate Social Responsibilities using Standards-Based Management Systems

The International Journal of Construction Management (2011) Vol. 11 No. 2, 37-47

FULFILLING CONTRACTORS' CORPORATE SOCIAL RESPONSIBILITIES USING STANDARDS-BASED MANAGEMENT SYSTEMS Alan GRIFFITH Department of the Built Environment, Sheffield Hallam University, Sheffield, S1 1WB, UK Email: [email protected] Abstract Construction projects place intrinsic and substantial demands upon contractors to uphold their corporate social responsibilities (CSR). Such responsibilities influence both the strategic corporate management approach of the contracting organisation and the operational management of processes and procedures used to manage the construction projects it undertakes. The implementation of organisational management systems is an obvious and proactive way for a contractor to embrace its CSR. Quality, environment and safety are at the forefront of management systems applications within construction where well conceived systems can respond effectively to the many demands placed on the contractor by CSR. This paper examines how contractors' CSR can be fulfilled using standards-based management systems and looks forward to the innovative use of integrated management systems (IMS) within construction. Keywords Construction contractors, corporate social responsibility, management systems. INTRODUCTION The concept of corporate social responsibility, or CSR, has evolved greatly since its introduction into common business terminology in the 1950s (Bowen, 1953). A proliferation of theories and approaches has followed leading to a good general understanding of CSR as a business theme but with considerable obfuscation of terminology and applications (Garriga and Mele, 2004). CSR has courted controversy due to the different ways in which organisations have approached CSR and moreover in the reasons given for doing so (Campbell, 2007). Notwithstanding, CSR defines and explains an organisation's ethos and commitment to be accountable to its business stakeholders. "CSR demands that businesses manage the financial, social and environmental impacts of their operations to maximise the benefits and minimise the downsides" (CSR Network, 2009). Contracting organisations operating within the construction industry are well aware of their CSR. A clear social understanding, proactive community relations, safe working practices and a high respect for the environment are all part of the normal business operations of contractors. As such, many embrace CSR within closely targeted corporate business policies supported by recognised international standards-based organisational management systems. The three most prominent systems are quality management systems (QMS), environmental management systems (EMS) and health and safety management systems (H&SMS).

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This paper examines how and why contractors use these systems as a basis for structure and vehicle for implementation of their approach to CSR. BACKGROUND AND CONCEPT DEVELOPMENT Corporate Social Responsibility (CSR) As a term to explain the impact of an organisation's activities upon its business stakeholders, corporate social responsibility has become a common business expression (Freeman, 1984). "CSR is the acknowledgement by companies that they should be accountable not only for their financial performance, but for the impact of their activities on society and/or the environment" (CBI, 2010). CSR is a method of company self-regulation configured and applied within the organisation's strategic business approach (Wood, 1991). In an evolving publicly-accountable marketplace, organisations within many industry sectors are placing greater importance on the moral and ethical dimensions of their business activities (BIS, 2009). With a voluntary and market driven focus, CSR embraces the impacts of an organisation's activities on its environment, customers, communities, employees and indeed upon anyone that comes within the organisation's sphere of activity. CSR is particularly pertinent to the construction industry where the business activities of participants and, significantly, contracting organisations have a considerable potential to impact upon stakeholders (Griffith et al, 2000). Contractors embrace many and often diverse organisational activities under the umbrella of CSR including sustainable procurement, environmental safeguards, safety practices, quality and value, and waste management. A well configured organisational approach to CSR is an important aid to a contractor's corporate mission, reflecting an unequivocal standpoint in its business sector and giving a clear statement of how it will support its clients, marketplace and stakeholders. General Approach to Delivering CSR The Confederation of British Industry (CBI) believes that CSR should be voluntary and market driven. "Companies must be allowed to define CSR according to their own activities and context" (CBI, 2010). With that perspective, the approach that a company takes to fulfil its CSR becomes a management tool to be used appropriately and sensibly in delivering all aspects of its business. This is extremely pertinent within the construction industry where contractors must meet a plethora of client requirements and project demands delivered simultaneously through a multitude of management functions. When a contractor delivers its services while taking account of its economic, marketplace, social and environmental impacts it must do so within the context of its own business orientation and situation. So, the general theme of CSR will proliferate throughout the construction sector but the ways in which contractors meet their particular CSR will be individual, possibly even unique. In the context of the wider construction industry, the total construction process imparts a major impact on society (Murray and Dainty, 2008) and as such is of interest to all its participants. Application of Standards-based Management Systems to Fulfil CSR "For construction, a suitable definition {of CSR} would be the commitment to integrate socially responsible values and concerns of stakeholders into {its} operations in a manner that fulfils and exceeds current legal and commercial

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expectations" (Constructing Excellence, 2010). In simple terms, a contractor needs a socially responsible organisational approach which structures both corporate and operational management functions and applies them to the delivery of its business processes. In this way the vision, values, policies and objectives of CSR can be configured and embedded within the routine operations of the business. Contractors use 'soft', or human-reliant, management systems to deliver their management functions both at corporate and project levels. Approaches to CSR can be configured to the specific guidelines of ISO 26000: 2010 - Guidance on social responsibility (ISO, 2010). ISO 26000 is not a management system standard but rather a {currently draft} set of guidelines for organisations seeking to structure their approach to CSR. As ISO 26000 is not yet a working standard and standards-based management systems are already used effectively by contractors, many have chosen to reflect CSR in association with an existing organisational system such as: ISO 9001 - quality (ISO, 2008); ISO 14001 - environment (ISO 2004); and OHSAS 18001 - health and safety (BSI, 2007). RESEARCH METHODS Aim The aim of the research was to examine how contractors within construction may fulfil their CSR using standards-based management systems. Objectives Four objectives underpin the research aim:

1. To identify the common features of CSR and management systems; 2. To examine the propensity of each management system to accommodate the

requirements of CSR; 3. To examine the innovative use of integrated management systems (IMS) to

meet CSR; 4. To suggest a best approach to meeting CSR by using IMS.

Methods Used Information was synthesised from a series of research studies examining the development and implementation of standards-based management systems within construction (Griffith and Bhutto, 2004; 2007; 2008). This was combined with literature and empirical documented approaches to corporate social responsibility by contracting organisations. While the method cannot be said to have quantitative validity, it provides a reliable qualitative base which gives good insight to recent approaches taken to meet CSR within construction. FINDINGS Common Features of CSR and Management Systems It is clear from the literature that while there is a general conceptual definition of CSR, there is a range of understanding among organisations of what CSR means to them. This should not be surprising as it is wholly appropriate that an organisation perceives CSR and develops its approach to CSR within the context of its own business activities and marketplace. What is more clear is that while CSR can involve a great

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number and wide range of characteristics depending upon the situation of the organisation involved, the research has identified that CSR does exhibit five core features. These are: social accountability; associations of stakeholders; compliance with law and regulation; ethically sound operational practices; and business sustainability. These are consistent with the triple bottom line - financial, social, environmental - measures of organisational performance demanded by clients and customers in almost all business sectors including construction (Business Directory, 2010). It is axiomatic within those international standards which guide the establishment of management systems for quality, environment and safety that triple bottom line performance is a key feature. The Deming Plan-Do-Check-Act (PDCA) Process Model of managing business activities (Deming, 1960) is a fundamental tenet of management systems configuration (ISO, 2008). The process model implies that the organisation will develop a continually improving management system taking into account and accommodating as far as practicable the social dimensions of its operations, the requirements of its business stakeholders and the sustainability of the organisation and marketplace while also complying with current industry legislation and regulation using effective and ethically robust business practices. It is clear therefore that there are strong common structural features of the requirements for both CSR and management systems. Propensity of Each Management System to Accommodate the Requirements of CSR

Quality management is a crucially important function within construction projects. Its significance is reflected in the widespread recognition by the industry of the use of formal and independently approved quality management systems (QMS). The drive for better quality of service by contractors has seen the international standard for QMS - ISO 9001 - become the norm within the construction industry as business demands of clients have increased. QMS has been at the heart of the construction industry for well over half a century. The fundamental requirements for quality of service or product and moreover better value for money - time, cost and quality - have positioned QMS as the blueprint for the establishment of virtually all other organisational management systems. The research has identified that QMS is founded usefully on eight principles which are consistent with many of the required features of CSR. These are: client/customer focus; effective business leadership; involvement of people/stakeholders; a process approach to delivering service/product; systems approach to organisation/service/product management; continual improvement to organisational performance; factual approach to decision making; and mutually beneficial supplier relationships.

The quality management system (QMS)

A potential weakness in using a QMS approach to satisfy CSR, identified by the research and consistent with aspects of the literature, is that the management of quality is not driven by statutory legislation or independent regulation but is a voluntary initiative. Quality of service provision by contractors is driven by the need to satisfy client and market needs and depends upon the specific organisational situation. A contractor's performance may meet only a threshold standard with

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considerable variability in provision by different contractors throughout the construction sector. A balanced perspective was presented in the research data as it was suggested that the voluntary drive to meet quality standards may in some situations mean that contractors perform well beyond a threshold standard. Such drive and determination to enhance standards of quality within construction is truly in-keeping with commitment-based CSR. The most prominent issue highlighted was that quality management is principally financially driven with its focus on time, cost and performance, or value for money, and therefore may inherently disregard the wider social and environmental dimensions of CSR. The research suggested that due to its long-standing and traditional position in the evolution of management systems QMS may well be used as a base management system. However, it was felt that CSR might be better served within the principles of environmental management and the implementation of a well conceived EMS.

The environment is perhaps the strongest link between the requirements for CSR, management systems and the organisational performance of contractors. As a result of increasingly stringent legislation and regulation, marketplace demands and contractual requirements, environmental matters have assumed a prominent position in the psyche of all participants of the construction processes. Moreover, safeguard of the environment has become a theme uppermost in the minds of the public and environmental campaigning groups. Contractors have an exacting CSR to the environmental impacts of their activities. Construction projects, in all their forms, impact upon the environment and contractors are at the forefront of mitigating these impacts. For limited construction works, contractors may use project-specific environmental plans. For the larger contracting organisation delivering major projects, an environmental management system (EMS) may be required. The research suggested that perhaps the most appropriate management system within which the core elements of CSR can be reflected is an EMS established to the ISO 14001 standard. It was thought that from the range of management systems used within construction EMS best fits with meeting financial, social and environmental performance indicators.

The environmental management system (EMS)

The research also highlighted that BS 8555:2003 {the guide to phased implementation of an EMS} (BSI 2003) can be more useful than an ISO 14001 compliant approach. This is because BS 8555 is directed explicitly towards small and medium enterprises (SMEs) and this widens considerably the opportunity for contractors within construction to adopt EMS. In addition, BS 8555 allows the gradual implementation of EMS according to strategy and operational needs. Moreover, BS 8555 is closely related to ISO 14031 - guidelines for environmental performance evaluation (ISO 1999) which is very pertinent as this standard focuses on organisational performance within an organisation's wider business responsibilities, again fitting well with meeting CSR.

Health and safety management systems (H&SMS) are guided by OHSAS {occupational health and safety assessment series} 18001. Of the three management systems - quality, environment and safety - the H&SMS, while appropriate to the social dimension of CSR, is least likely to accommodate an organisation's holistic

The health and safety management system (H&SMS)

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response to CSR. This is so because health and safety management focuses on compliance with a plethora of national legislation and chiefly because it is subject to industry-specific health and safety regulation, for example the Construction (Design and Management) Regulations 2007 (HSE, 2007). The research indicated that contractors tend to focus only on compliance with health, welfare and safety orientated requirements and H&SMS reflect this in their structure and operation. Although the OHSAS 18001 standard has structural elements in common with ISO 9001 and 14001, contractors tend to keep their H&SMS separate from other organisational systems. Many contractors will have a strong health and safety culture reinforced by a clear policy statement and measurable objectives. While this might be said to embrace CSR in terms of societal elements - keeping people safe and respecting the community - the total needs of CSR, including financial and environment concerns, are unlikely to feature. Innovative Use of Integrated Management Systems (IMS) to Meet CSR The research indicates that no one management system used by a contractor, be it a QMS, EMS or H&SMS, will be fully commensurate with the requirements of CSR. All of the systems have structural and operational similarities that embrace, in various combinations and to some level, the financial, social and environmental aspects that define, shape and evidence the practice of CSR. The research has shown that the common threads within ISO 9001, ISO 14001 and OHSAS 18001 that provide similarity in system configuration and implementation have in recent years been explored by contractors who have seen the considerable merits and advantages to bringing quality, environment and safety management together. As a result, the most forward thinking UK contractors have developed an integrated management system, or IMS approach. The concept of the IMS is, "The integration of one management system with at least one other management system where both systems operate concurrently, meet national and/or international standards, focus on the core business and its customers and are certificated by an independent external body" (Griffith, 2011). The concept therefore, lends itself appropriately to the fulfilment of CSR. The five core features of CSR: social accountability; associations of stakeholders; compliance with law and regulation; ethically sound operational practices; and business sustainability can be incorporated into the vision, policy and objectives of a contractor's business strategy and when also built in to the organisation's IMS they can guide operational processes and procedures. The bringing together of management systems and CSR is an innovative and challenging solution. It is a solution which can bring many benefits. Conventional and separate management systems have long been criticised, with or without justification, for their wasteful approach, bureaucratic approach, duplication of procedures and unnecessary paperwork (Beckmerhagen et al, 2003). The use of IMS can eliminate or reduce such difficulties, streamline organisational activities and give clarity of purpose, structure and direction to the contractor. When the management functions are structured and organised appropriately it frees up the contractor's site management personnel allowing them to focus upon better delivery of service, in the wider sense, to clients and stakeholders. The challenge is to find the best configuration of IMS to best meet the contractor's CSR.

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Best Approach to Meeting CSR by Using IMS Integrating CSR, triple bottom line measures of organisational performance and IMS requires the establishment of 'one' management system which incorporates the three functions of quality, environment and safety. The system should reflect the normal hierarchy of core system elements: policy; organisation; risk assessment; planning; system implementation; and audit and review (ISO, 2008). However, whereas multiple management systems have separate policies to define and guide the different management functions, the IMS has only one policy. Once this single yet intrinsically multi-faceted policy is put in place it becomes the driver for all core system elements and also links the elements in application to the social, stakeholder, legal, ethical and sustainability requirements of CSR. The key to effective implementation is the generation of a holistic business and organisational perspective. The research suggested that, for this reason, an IMS might be better thought of as an integrated business management system. While the policy is the contractor's pronouncement of its business ethos, values and commitment, the detail lies in description of the contractor's organisation, management leadership and procedures, business processes and working practices and this is achieved through the presentation of system documentation. The standard documents for soft management systems are: a system manual; a set of management procedures; an implementation plan; and a set of work instructions and an IMS can adopt this approach. These documents are essentially a hierarchy of system activities which describe how the contractor goes about delivering its business service - in simple terms how the contractor executes those tasks involved in the construction process. The research highlighted the importance of the policy and the systems manual but emphasised the significance of the implementation plan and work instructions. These were held to be highly important to IMS effectiveness as these documents translate the corporate perspective into the practices of service delivery at the project site. It was recognised that while corporate and senior management clearly understood and supported IMS and CSR requirements, the workforce at project site level were less appreciative. As a result, site level system documentation needed to be inherently inviolable. If CSR is embedded in the contractor's corporate business approach and management configuration then there is the strong likelihood that CSR will be cascaded throughout the whole organisation and demonstrated in the activities of the project workforce. In that sense, the research is consistent with the considerable body of literature which propounds that systems management, across all functional management disciplines, depends unequivocally upon the commitment and drive of corporate management supported by work diligence on site. Although IMS has no applicable international systems standard to guide development, the research highlighted that BSI supports the use of PAS 99 {Publicly Available Specification} (BSI, 2006). PAS 99 is a common framework for systems integration and is therefore well suited to IMS. The specification is based on the six common management systems elements previously stated although alternative terms are used in their system description - policy; planning; implementation and operation; performance assessment; improvement; and management review. In addition, as the specification adheres to the Deming process model outlined earlier, the system intrinsically embraces the financial, social and environmental requirements of CSR, with system effectiveness assessed to triple bottom line measures of organisational

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performance. The research suggested that PAS 99 is an applicable and effective system development guide and one which presents a tremendous opportunity to contractors of all types and size. Figure 1 presents an appropriate framework for IMS based on all of the observations made in the research. An IMS is a management tool and therefore it must be applied sensibly and appropriately by the contractor. IMS is not a panacea for CSR. A contractor, like any other organisation, must consider and approach systems management and CSR in a way that makes sense to their organisation given their particular business activities and marketplace. For this reason, while common structural threads will feature in all approaches to fulfilling CSR using IMS, each approach will be tailored and individual. The research confirmed that contractors do not all need to fulfil CSR in the same way. The approach to CSR is governed to a great extent by the particular characteristics of the contractor - size, organisation, location, marketplace and business activities being significant. Much depends on the business base of the contractor and the requirements and demands placed upon them by their clients and customers. It is worth noting that while there may some variability in the CSR of contractors operating within specific parts of the private sector, the research indicated that for those contractors delivering works for public sector organisations the commitment made to and fulfilment of CSR is prerequisite. CONCLUSIONS Corporate social responsibility (CSR) is concerned with how construction contractors align their vision, values and behaviour with the contractual requirements and needs of their business clients and stakeholders. Moreover, CSR describes the contractor's commitment to be accountable to those parties. In terms of the commercial marketplace and their activities on construction projects, contractors have a multitude of stakeholders with a plethora of stakeholder requirements. Contractors must deliver their projects timely, cost effectively and with good quality while doing so safely and with due regard to the natural and built environment and its inhabitants. This requires that the contractor has effective corporate management and effective project management. Traditionally, contractors have undertaken the management functions which drive the construction processes through the implementation of management systems, the most recognised being those used to manage quality, environment and safety. The research reflected in this paper suggests that the use of an integrated management system (IMS) may be a more effective approach. An IMS - a single management system embracing quality, environment and safety management functions - can be configured with the core elements common to all management systems. Moreover, the system can be specification-based as PAS 99 can be used to guide the establishment of a system with a recognised and robust structure, organisation, procedures and documentation. The IMS approach can easily be aligned with the social accountabilities and the requirements of stakeholders, established by the contractor's business policy, and also address the triple bottom line measures of organisational performance. IMS is not the answer to the organisational and business needs of all contractors. Each will need to consider the implications of CSR within the context of their particular business activities and marketplace. What IMS does do is provide a wide range of contractors within the construction industry

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with a means to address CSR using their existing organisational management systems as a basis for thinking and development. Consistent with the literature and highlighted in the research, IMS clearly has the capability to underpin effective organisational management if IMS is applied sensibly and appropriately by a contractor as an innovative management tool. REFERENCES Beckmerhagen, L.A., Berg, H.P., Karapetrovic, S.V. and Wilborn, W.O. (2003)

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