procter & gamble csr

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  1. 1. RUNNING HEAD: CSR - PROCTOR AND GAMBLE 1 University of Maryland University College Corporate Social Responsibility (CSR) Highlight: Proctor and Gamble For Dr. Barnard DMBA 610 Asad Zaman Submitted: April 26, 2015 Table of Contents Introduction....................................................................................................................3-3 Corporate Social Responsibility: Definition...............4-Error! Bookmark not defined.
  2. 2. RUNNING HEAD: CSR - PROCTOR AND GAMBLE 2 Proctor & Gamble: A Global Player ............................................................................... 5 Proctor and Gamble: Beginnings .................................................................................5-6 Proctor and Gamble: Brands........................................................................................6-7 Proctor and Gamble: Leadership and Business Units ..................................................... 7 Purpose: Mission Statement............................................................................................ 7 Sustainability: CSR Beginnings...................................................................................7-8 Establishing CSR .........................................................................................................8-12 Initiatives..................................................................................................................12-13 Successes..................................................................................................................13-16 P&G Corporate Social Responsibility ...........................Error! Bookmark not defined. Environment Issues...................................................18-Error! Bookmark not defined. P&G Suite alleges discrimination................................................................................. 19 Global law and regulations ........................................................................................... 19 Global Outreach............................................................................................................ 20 Conclusion ....................................................................................................................... 21 References...................................................................................................................22-24
  3. 3. RUNNING HEAD: CSR - PROCTOR AND GAMBLE 3 Introduction Todays global business enterprises are vastly different from the businesses formed prior to the beginning of the 21st century. Compared to humankinds beginnings of conducting trade and business transactions previously, todays methods of conducting business and the way that business relationships are formed require strategies and that serve to satisfy many stakeholders. These strategies include methods to lower costs and increase market share. Businesses have begun to orchestrate cost effective means in order to buy, sell, or transfer goods and services in this global realm with profitability as the primary goal. The business climate of today includes many businesses spread across the globe. Globalization, a word that has taken the business world by storm has caused a dramatic shift in business strategies compared to the simplistic and humble beginnings of business trade many years ago. Businesses are conducting more trade on a global scale that is helping to fuel extreme competiveness in the business market (McConnell & Brue, 2008, p. 99). With globalization, businesses are invoking a global and collaborative method of conducting business, which includes industry, commerce, communication, travel, and culture with other nations, and by virtue of globalizations competitive nature, has also created a panacea for itself (McConnell & Brue, 2008, p. 99). This globalization panacea has created a desire for global businesses to achieve profitability while at the same time attempting to cut costs. Sometimes, the results of these competitive business strategies can be disastrous. This new and modern marketplace, a product of globalization, has caused some companies to outsource and manufacture products offshore to increase profits, despite unsafe and poor work conditions of the employees working in the outsourced country. Some companies fail to see or ignore the hazardous work conditions those employees are subjected to.
  4. 4. RUNNING HEAD: CSR - PROCTOR AND GAMBLE 4 This paper will evaluate how one company, Proctor and Gamble, created a Corporate Social Responsibility (CSR) program in the midst of thriving and ever expanding globalization co-ops, and evaluate its successes and failures related to its CSR attempts. Furthermore, an exploration of how P&G applies ethical and moral reasoning behind its CSR policies. How they positively or negatively affect stakeholders, including those employees in the outsourced locations. Additionally, this paper will explore Proctor and Gamble beginnings, its CSR failures and successes, and where they stand in todays society today and where they appear to be heading in the future. Corporate Social Responsibility: A Definition Corporate Social Responsibility otherwise known as CSRis a common term, which embodies the ethical and moral values and standards of an organization and how those aspects are applied by the business in the context of executing their business operations. There are many factors which can influence a business to adopt practical CSR standards for itself while at the same time demonstrating an ethical appearance which could positively affect or influence its stakeholders; from customers to the shareholders. However, how does that business deal with the co-ops; those other businesses that are responsible for actually manufacturing its products or the assembly of components which support the businesses in terms of employee working conditions, health care, employee rights, and a slew of other factors which can add to or detract from an employees well-being? Due to globalization, the answer to this question is mostly applicable to businesses in other countries that are providing a product or service for the main business in another country. According to Werther and Chandler (2006, p. 7) CSR can be defined as a broad concept that businesses are more than just profit-seeking entities and, therefore, also have an obligation to benefit society (Werther & Chandler, 2006, p. 7). When a business embraces CSR as an aspect of its identity, it is also creating atmospherics in terms of how society perceives that business. The
  5. 5. RUNNING HEAD: CSR - PROCTOR AND GAMBLE 5 perception is weighted against the companys values in terms of how it achieves profitability and success. Further, according to Daft (2008, p. 150) CSR can also be defined as a means to determine right from wrong and doing right in order to contribute to the welfare and interests of society as well as the organization (Daft, 2008, p. 150). There are various levels of the interpretation of CSR; however, when a business lacks CSR or does not adhere to societal norms concerning ethics and values, then all stakeholders may be negatively affected. According to Chernev and Blair (2015) research conducted on the subject of corporate socially responsible businesses revealed socially responsible firms are likely to deliver superior financial performance and indicates that there is a positive correlation between good corporate social responsibility acts and the businesses profitability (Cherney & Blair, 2015). Furthermore, Green and Peloza (2011) indicated in previous surveys that a companys reputation for social responsibility tends to decrease consumers price sensitivity and increase their brand loyalty (Green and Peloza 2011; Marin, Ruiz, and Rubio 2009). Proctor and Gamble: A Global Player Proctor and Gamble: Beginnings The story of how Proctor and Gamble began is an interesting one. According to the Proctor and Gamble corporate history web site (2012) Procter Meets Gamble In 1837, William Procter and James Gamble signed a partnership agreement formalizing The Procter & Gamble Company, with combined total assets of $7,192.24 (Proctor & Gamble, 2012). The beginnings are actually more in depth compared to the history indicated on the Proctor and Gamble website. William Bell was a soap manufacturer who mentored James Gamble, the son of Irish immigrants who settled in America because of financial hardships in Ireland. After James
  6. 6. RUNNING HEAD: CSR - PROCTOR AND GAMBLE 6 became ill, the family stopped in Cincinnati, Ohio and made that their home after Jamess recovery and the great hospitality experienced by them from the town (Proctor and Gamble, 2015). After eight years of mentoring by William Bell to James Gamble, James went into business for himself in 1828 with Hiriam Knowlton. Thus, a formal soap manufacturing business was created in Cincinnati; however, just down the road, another soap manufacturer, managed by William Proctor was in direct competition with James Gamble business model (Proctor & Gamble, 2015). Interestingly, James married Elizabeth Ann Norris and William Proctor married Olivia Norris , Elizabeths sister, thus creating an indirect family competitive business model. Alexander Norris, William Proctor and James Gambles father in-law, suggested that they both go into business together and in 1837 the official partnership of Proctor and Gamble began (Proctor & Gamble, 2015). Today, Proctor and Gamble is a multibillion-dollar global corporation with presence in many countries. Proctor and Gamble is a publicly traded Fortune 500 company with approximately $83 billion dollars in fiscal year 2014 sales (Proctor & Gamble, 2015). Proctor and Gamble: Brands Proctor and Gamble has 23 $1 billion dollar brands with annual sales exceeding $1 billion to $10 billion and above in several of