BHP Billiton’s Case study for Corporate Citizenship Essay Example for Free

BHP Billitons Case study for Corporate Citizenship EssayCorporate citizenship focuses on the kind of responsibility companies apply toward the community they argon operating in. The bea of focus could be how customers and the community could be impacted by what a assumption companionship or corporation is doing. The argona of concern could include the communities much(prenominal) companies argon operating in, stakeholders that include shareholders, employees, and other argumentationes much(prenominal) as suppliers that are interacting or working with such entities.What is involved in corporate citizenship is more than statuary obligation where companies are prayd to go through certain basisards and requirements by law. Corporate citizenship evaluates what business entities with various forms are doing to add to the quality of life of their employees and their dependants, as well as the community they are operating in, including the larger edict that their community is billet of.Corporate citizenship, as well known as corporate social responsibility (Catalyst Consortium, 2002) has opponents and proponents where the opponents argue that think on corporate citizenship impart derail businesses from focusing on their principal(prenominal) concern, which is the usual role businesses are playing in the community. Others are saying, in reality the whole concept is not more than a window-dressing. in that location are opponents who insist that focusing on corporate citizenship provide enable businesses to divert the attention governmental watchdogs are directing at them.What the proponents highlight is if corporations and mistakable businesses are sensitive to social responsibilities, it en dedicate directly benefit them by enabling them to avoid focusing on their short-term drive to maximize salary (Fields, 2002). What is involved in all this is the ethics of doing responsible business in communities where these numerous big businesses that could be corporation are involved, whereby being soundly in what they are doing will benefit them more, by enabling them to avoid pitfalls that could come to haunt them.At the same eon, the numerous communities that are accommodating numerous businesses will be free of harm by their wrongdoing. It is difficult to quantify and to come up with some kind measurement technique concerning what should be the standard honourable conformity required from each business entity because of the varied involvement each one of them has in what they are doing (Thillmany, 2007). It is doable to mention Demngss Fourteen Points, equilibrate Scorecards (Leadership Institute) as an effort to introduce some kind of a standard, although it is difficult to see how successfully it will do the job.Furthermore, Orilizty, Schmidt, and Rynes (2003) had demonstrated that there is a coefficient of correlation between social performance that takes into consideration the environment and financial performance . The problem with such outlook had been since businesses are aware of their social responsibility they would avoid focusing on the short-term gain they would garner from their conducting business. Some of the key components of corporate responsibilities might involve charitable activities or volunteering to activities that require the input of bigger entities.It is besides possible divisions such as human resources or public relations could look after corporate responsibility, while using other divisions in an disposal if they are suitable cannot rule them out. It is also possible that it could involve the CEOs or the Boards. at that place are key areas in an organization where corporation responsibility more vivid. hotshot of them is human resources where the kind of hiring and retaining practice that pertaining to a given firm will enable it to get good employees and having such practice in gear up would enable to portray a good image in the community it is operating in.Ano ther area that needs attention is the kind of risk of exposure caution applied in a given firm, where if anything goes wrong it will be difficult to repair a damaged corporation image. Incidents such as decadency and environmental accidents could exacerbate the erosion of a corporations image and requires handling with the utmost care. Overall, the kinds of advantages a corporate that has a good image and is good citizen could reap could a long way and could avail a vast advantage for those that could score high marks.There is also a case where corporations would want to minimize outside interference directed at them, especially by governmental bodies that could levy heavier taxes or introduce strict regulations. Such measures could impeded the betterment corporations can make and one way to avoid that is to engage in various activities such as a concern for the safety and health of their workers, introducing diversity, qualification the environment their priority, and getting engaged in the community they are operating using the available various channels.In all this, it is possible that corporations will pass off themselves in a dilemma, because their primary finis is to maximize profit for the stakeholders and if they do not fulfill that obligation, they will not generate enough interest to attract investors. There are economists such as Milton Friedman (NYT) who had openly advocated that since the main drive of corporations is to make profit, they do not have to be worried about the society around them. Such strong-held views had been defied simply because if e rattling corporation strives to constitute a good citizen, whatever it incurs for doing so will be part of doing normal business.The investors who are members of society will reward those that are good corporate citizens, while they shun away from those that are not, and that obviously affects corporations that fall behind in brush their good citizenship role. It is also possible that some of the operation of some corporations might have a veto impact on society, on their employees, on the environments and the like, further they could engage in a public relation campaign to distract critics, observers, or regulators.A few examples to cite are tobacco or petroleum companies whose operations cause damages and no amount of public relation could hide that. In a situation like this, those who can control such operators such as governments, investors, as well as suppliers could exert pressure on them to meet certain good citizenship requirements. Overall, it is possible for corporations to be good citizens and become legal business operators. At the same time, even if some corporations try to become good citizens, because of what they are involved in, it will take them longer time to meet the requirements.The outcome validates that if corporations are not responsible and accountable for what they are doing and have more inputs into the communities they are operating, an d unless they oversee the welfare of their workers, as well as numerous partners and stakeholders, in todays market place where information travels fast, it could cost them a lot. The high price to pay could be worse for those that are public companies, simply because they could be deprived valuable resources such as capital, expertise, manpower, and the like to make them conform.In light of that, this paper will analyze how BHP Billiton, an Australian based resource company is meeting its requirements of a good corporate citizenship. BHP Billiton The company claims that it is distinguished from the other resource companies because it has quality assets, a lineup of projects that the other companies do not have, it is claiming to be customer focused in its marketing effort, it is diversified across many countries, the commodities it deals with are also diversified and that includes the markets it is operating in. nonpareil final exception the company has is it is into petroleum busi ness too. With its 39,000 worldwide workers, it is industry leader or near industry leader in commodity business, such as aluminum, energy, mostly coal petroleum and natural gas, copper, manganese, iron, uranium, nickel, silver, and titanium minerals. All this information and more, such as the $15. 6 cardinal net profit it make for the year 2007 is on the companys website. It market capitalization from the same source is $140. 5 billion for August of 2007.The company came into existence when two treble listed companies, BHP limited and Billiton Plc merged in 2001. One other important information is the two merged companies continue to exists as separate entities, but they operate as a combined company under one board of directors (BHP Billiton, About Us). Stakeholders BHP Billiton clearly identifies its stakeholders and they start from its employees and contractors, the communities around them that use the products the company is coming up with.There are also those it claims to ha ve influence on what it is doing and that group starts from the investment community as a whole, not only its shareholders, its business partners, organizations in the communities it is hardened in, unions, non-government organizations, suppliers, various governmental bodies, media, and industry associations. The company believes accord to its own statement that accountability and transparency go together.Because of that, it claims that the companys charter, its sustainable development policy, HSEC focusing standards, and the guide to proper business conduct is honest and done with integrity and fairness. The company claims that it is an avid believer in dialogue with its stakeholders, as it had witnessed the feedback it gets from them had enabled the management to improve their decision making accordingly, where all prevalent relation information is shared among staff that had resulted in strengthening the relationship with stakeholders.Furthermore, there had been a mechanism t o encompass any grievance that originates from stakeholders. Company Approach to Sustainability The company claims that its sustainable development focuses on how its contributions will have a lasting effect on social, environmental, ethical and economic aspects of the company, as well of the communities it is operating in. Because of that, the companys priority is to get it right the first time and claims that it has a holistic approach to what it is doing.One of its priorities, which is zero-harm is a requirement to all those involved in the company and they are accountable for their actions. The zero-harm drive focuses in creating a harm free work environment, as well considering the impact what it is doing would have on the environment. The reward it is seeking for accomplishing that is it wants to attract investors, by demonstrating their investment will not only be valued, but it will be made in a company that meets all its social obligations that goes beyond the mandated one s.The same applies to employees that it wants them to be attracted to it because of what it offers and because of the stand it had taken in the community. There is also getting preference from communities and stakeholders for being adherent to what the good corporate citizenship consensus requires. As far as the companies strategies are concerned, it take into account that it is a diversified company that will have to look after its cash flows, where some kind of stability is required in order to be in a stupefy to meet financial, social, and environmental needs, while at the same time it delivers value to its stakeholders.The company admits that it also had a business dimension that it has to take into consideration because, without doing that it will find it difficult to meet its sustainability goal. However, it is with dedication to achieve that goal by making its priority the zero-harm policy that focuses on the well being of workers, communities, and the environment. Furthermo re, it makes its priority an effective governance and risk management that will be part of how it operates, so that any wrongdoing will not backfire and affect its progress (BHP Billiton).Sustainability writingage The company has a policy where it has to review its performance regularly and make its findings public. It believes that doing that will enable it to demonstrate that it is accountable and transparent. It further believes that doing so is an effective stakeholder participation and the reporting process would become a management tool to measure performance, key company issues, and related management concerns and approaches. It claims that it uses two forms of reporting one online reporting and the other in print.To demonstrate there is a convergence between the companys risk management and sustainability programs, the sustainability summary report is included as a chapter in the annual reports of the company. Because of the size of the company and what it is involved in, it will result in making the size of the stakeholders large, necessitating that each operation produces its own sustainability report in the locale and region that it operates (BHP Billiton, Our Business). There is a sustainability committee of the Board whose job is to oversee health, safety, environment, and community (HSEC).There are also line managers who are responsible to oversee HSEC performance. This function called HSEC function has the responsibility of providing guidance directly or through networks. It is also open for outside inputs that could originate form experts and it is possible to channel them through a forum on Corporate Responsibility. The diagram illustrates the prevalent structure for sustainable development. Accordingly, the structure demonstrates that it is possible to direct feedbacks to the highest governance organic structure at the company.At the top of the structure there is BHP Billiton Board appointed by the shareholders to look after their interes t. Then there is a subcommittee called Sustainability Committee and it main job focuses on HSEC risks, compliance with legal and regulatory requirements concerning HSEC, performance concerning HSEC matters. It is also responsible for preparing annual sustainability summary report. The members have the academic qualification that is pertinent to HSEC so that they can carry out their duty effectively.There is also a forum focusing on corporate responsibility that brings various stakeholders together to debate and debate on social and environmental issues that are relevant to the company. The audit committee of the board has a job to make sure the financial reporting, inhering control structure, risk management, and all required audit functions are in sound condition. The sustainability committee of the board and the audit committee work together, so that the boilers suit overseeing of what takes place in the company meets the requirements.There is also a global ethics panel whose m ain job is to assist the CEO and to enable him meet the governance document requirement, whereby honesty, integrity, forwarding respect and dignity to others would be part of the CEOs job. In addition, it deals with employees facing ethical issues, it reviews business conduct issues that came into existence, and it assesses young policy issues and recommendations. Healthy People The company claims that the well being of people is key to the success of what it does.Because of that, its zero harm policy is very important for the company. uninjured Workplace The company here also claims the safety of those who work for the company, the contractors of various stripes, and the communities the company divisions are located in are all important for attaining its goal as a good corporate citizen. There are a host of measures that the company is introducing on an on passing game basis to safeguard the health of its employees and the communities that are hosting it wherever it operates.Envi ronmental Commitment The company states that it operates in numerous countries operating a wide variety of business in locations that have different ecosystems. It recognizes that the businesses it is in could affect the environments. Key areas it is focusing on are emissions of gases and particulates, impact of what the company is doing on water quality, land disturbance, land-use change and habitat removal and the like that require more attention be paid on how some of the works are carried out.To deal with such problems the company has a charter that states that the company has an overrule priority to health, safety, environmental responsibility, and sustainable development. Some of the methods it is applying to attain this goal is to strive to be the leader in introducing sound industry practices, to set goals to achieve targets, and enhancing biodiversity trade protection by taking into consideration ecological values and the use of land. Social Responsibility The company rec ognizes that what it owns and what it does in various communities could affect cultures and living conditions.It strives to avoid negative social impacts as much as possible, and strives to maximize the benefits and opportunities the involved communities would get from what it is doing. Some measures it is taking to oversee the social responsibility issues are building trust and dialogue with those it believes will be affected by what it is doing, promoting human rights among its stakeholders where it would incorporate in what it does issues such as freedom of association, exclusion of child labor, prohibition of coerce labor, proper and ethical use of security personnel.Building social and human capital by introducing community development, it proposes to recognize and respect indigenous people culture, belief, and conventional rights, and come up with facilities that will contribute enhancing and reserving of indigenous cultures. It also proposes to control all economic impacts it will create on others by creating economic opportunities such as employment, education in a form of training, and what it calls business spin-off, and all other impacts such as displacements, impacts on food and water supplies (CSR Network).Strength and helplessness The company strength starts from its size and its diversified asset base. As it had been the case if it plans to take advantage acquisition, it has what it takes to allure stakeholders of the targeted companies that had been true when it tried to acquire Rio Tinto for 75 billion pounds (Guardian CO. UK). As well as it could withstand market ups and downs since all its assets could not be subject to price change at the same time.It weakness stems from field risk where it has to go to many localities in order to procure what it wants and that will include undeveloped regions where the requirements could be much higher. As well as the risk of losing its investments without compensation is always because of political in stability. The other areas is some of its products that it relies such as uranium and oil are hazardous for the environment and it does what it does amid pressure and opposition resulting making extracting and bringing those commodities expensive.Especially the company is under pressure to bring to a halt all its activities concerning mining uranium and there is a movement going some of it originating from some of its stakeholders who are asking to stop everything it has to do with uranium (Guardian Co. UK). External Corporate Citizenship Rating Sources When it comes to rating companies most of them had given it a very high mark. Among others, Ethics World had highlighted what BHP Billiton is doing as far as sustainability is concerned and accordingly this particular agency had approved the fact that it had a good stand in that area.(Ethics World). Another source SMH Australia had stated that according to Australias Responsibilities index had put Westpack a bank in Australia at the top of the index with a score for corporate responsibility of 99. 53, while BHP had come second with 93. 21 and the company it tried to acquire Rio Tinto came third at 91. 54 percent (Sydney dawning Herald). In accountability rating conducted in South Africa where BHP Billiton has interest and operation it had scored first according to Mineweb publication.It was UNISA Center for Corporate Citizenship that conducted the research, the sponsors being Barloworld and the Unisa College of Economic and Management Sciences according to the publication (Mineweb). REFERENCE BHP Billiton, About Us, www. bhpbillition. com-bbccontentrepositary/docs/aboutus/BGF. pdf BHP Billiton, Our Business, www. bhpbillition. com-bbccontentrepositary/docs/ourbusiness/metallurgicalcoal/Illawarracoal/publications/ICsustainReport. pdf