Case study of Nissan
In this report, the importance of Corporate Social Responsibility (CSR) has been highlighted by considering the case study of Nissan. The Sustainability Report 2017 of Nissan was analysed to provide a detailed overview about what the company does for executing its social responsibility and contributing towards the society and economy. The discussion about the core characteristics of CSR provides an overview about how vast the concept or model of CSR is. The mention about various theoretical concepts and avenues provides an insight about how important it is for global organisations like Nissan to understand its relation with its various stakeholders. The current CSR strategies of the organisation have been described based on which recommendations have been given at the end of this report.
In today's world of business, each organisation plays an important role towards the economy and the society as well and has essential responsibilities to carry out. The operations and business process of the organisations have a significant impact on the society for which a framework or model is vital to be followed. CSR (Corporate Social Responsibility) is a model which is selfregulating in nature and helps the businesses to become socially accountable. When an organisation becomes socially responsible, it focuses on operating in a manner that can enhance the environment and society in which they operate. In this report, a discussion of CSR practices of Nissan has been conducted. Nissan's approaches and management practices has been highlighted along with the theoretical concepts and avenues that provide an understanding about how different organisations across the globe carry out their CSR responsibilities.
Corporate social responsibility in different organizational and national contexts focusing on the six core characteristics of CSR
The concept of CSR has transformed over the years on the basis of different dimensions, parameters and issues. Considering the most visible features of CSR, six core characteristics were formed which includes the manifestation of the CSR practices.
Figure 1: Six Core Characteristics of CSR
(Source: Created by the learner)
These practices are carried out by all types of organisations across the globe. The discussion about the six core characteristics along with examples of different organisations has been done below- Voluntary
With the need of focus on the growing issues of the environment and society, there are many organisations which set their own corporate initiatives that extend beyond the prescribed law and are discretionary. Not only do the companies try to comply with the social moral norms, but they also try to carry out their social responsibilities even beyond the minimum legal requirements. Nissan being one of the leading automobile companies in the world, developed its very own voluntary standard of reducing and reviewing the use of materials and adhesives in floor, door, seats and other parts of a car. This voluntary standard of Nissan goes beyond the international laws of regulations and restrictions of "Restricted Use of Substances" NES (Lu et al., 2014).
The issues and degradation of the environment are considered as the externalities. The production process of any organisation affects the general public. To internalise the externalities cost, regulations are formed and most of the firms are forced to follow them (Hamidu et al., 2015). However, business organisations take necessary managerial decisions and discretionary approach by discarding harmful production process, reducing pollution and taking safety measures. One of the major environmental issues is CO2 emissions, which in case of automobile companies generate from the consumption of fossil fuels. In order to reduce this emission, Nissan has introduced its own approach of three-wet paint process. As 30% of emission comes from painting process, this process of Nissan eliminates the need of baking the paint and this helps Nissan to reduce the CO2 emission from its painting process (NISSAN MOTOR, 2019).
Multiple Stakeholder Orientation
The orientation of the stakeholders is identified on the basis of three attributes which include power, urgency and legitimacy of claim. This stakeholder management approach helps in prioritising the stakeholders through certain steps like internal preparations; appointment of teams for communications, marketing, human resource, government or environment affairs, investor relations and operational unit; creating realistic expectations; providing communication training and industrial relations training; managing multiples orientation of stakeholders; accommodating for probable unavoidable mistakes and comparing the expectations of the stakeholders with the actual organisational performance (Tantalo and Priem, 2016). Maximum businesses rely on their stakeholders like employees, suppliers, customers and communities other than the shareholders only. Nissan is known for its CSR management and the company has been able to develop strategies to keep all the stakeholders engaged and satisfied.
Figure 2: Stakeholders and Engagement Opportunities of Nissan
(Source: NISSAN MOTOR, 2017)
Social and Economic Alignment
Even though maximum people believe that the major focus of the organisations should be beyond the narrow limit, many disagree to this and believe that social responsibilities should never conflict with the target of profitability. This characteristic is to balance the interest of all the stakeholders and align both economic and social responsibilities. This characteristic helps in understanding how business organisations can benefit themselves economically by just being socially responsible (Özerol et al., 2012). It has been researched that before the philanthropic and legal responsibilities, comes the ethical and economic responsibilities. However, this though varies from country to country, based on the social and economic requirements and culture of the people. In case Nissan, its management approach is so comprehensive that it looks forward to take feedback from its stakeholders and they try to reflect these on their operational process.
Practices and Values
Corporate Social Responsibility is all about the business strategies and practices related to the social issues. However, there are many people who believe that these practices and strategies also relate to certain set of values and philosophies. The culture and traditions of the local communities are valued by the business organisations these days as this helps them to send out a positive message of valuing the cultural diversity and difference (Ting-Toomey and Dorjee, 2018). Personal values have a great influence on the work environment and entire workforce. Hence, it is vital for the organisations to formulate proper CSR policies for the organisation and its people. The way the employees of an organisation are treated and taught to work, defines the value and attitude of the management and the owner. Nissan considers diversity as its main source of strength to succeed and develops essential business strategies to meet the needs of the global customers in a better manner.
Figure 3: Diversity Initiatives of Nissan
(Source: NISSAN MOTOR, 2017)
CSR is sometimes considered just as voluntarism or corporate discretionary responsibility of the organisations in some parts of the world. Currently, CSR has become a mandatory practice as per the international standards and regulations which have evolved from being altruistic to more strategic (Brammer et al., 2012). This evolution took place as the CSR activities have a significant impact on the marketing, profitability, logistics and human resource functions of the organisation. Hence, this model extends beyond philanthropy for its viability and potentiality of achieving organisational objectives and satisfying the stakeholders. It is essential to integrate CSR with the core business activities for adding more value to the business. Nissan has three core strategies which have been devised to pursue all actions while their Assignment of business. These strategies include philanthropy, environment and safety.
Variety of theoretical avenues and the diversity of theoretical concepts in CSR and its relation with Nissan
There are several theories on CSR that have been developed on the basis of different thoughts perspectives and judgements. All the theories underpin how different stakeholders interpret and observe CSR based on different perspectives. Given below are a few theories on CSR-
This theory has been developed on the relation between an individual or group of individuals who are involved in the organisational process and business organisations. This theory is an extension of the profit objectives which includes the claims and rights of non-shareholders. This theory has been categorised into three segments- normative, instrumental and descriptive (Hamidu et al., 2015). Normative is about how organisations should treat stakeholders, instrumental is about the relation between corporate performance and stakeholders and descriptive is about how organisations can manage communicating with the stakeholders. The managers of Nissan are given the responsibility of specifying their stakeholders and target them in a manner to make sure their responsibilities and roles are settled. Implementing CSR initiatives helps the organisations in the long run through the achievement of specific goals. In case of Nissan, it applies all the three segments while developing its CSR strategies. The management of the organisation discuss about the key societal issues and themes at regular intervals to address them as a global automobile manufacturer and corporation. All the issues are categorised and handled by different departments. Relevant solutions are designed and implemented to satisfy all the stakeholders and meet the organisational objectives as well.
Figure 4: Framework of Nissan for Global Environment Management
(Source: NISSAN MOTOR, 2017)
This theory considers CSR as an indispensible opportunity which can be used to exploit and get more benefits for the organisation. This theory states how business organisations can link their CSR practices with their profit goals to benefit all the stakeholders. Although this theory does not support the idea of extreme profit maximisation at the cost of the society, it focuses on how organisations can adopt CSR commitments to reach a strategic point and then move onto wealth maximisation and brand recalling (Seele and Lock, 2015). This theory is supported positively by most of the people as it has a positive relation between financial performance and CSR practices. Nissan aims at strategising in a manner in which it can maximise the value of its stakeholders and strategise for target areas. At the same time, Nissan aims at gaining the loyalty of the customers by running their business in an eco-friendly manner and providing them the right product with the right solution.
The agency theory refers to the process where the business owner (principal) conducts the business in a manner to utilise appointed agent's expertise (manager's expertise). The relation between the agent and the principal is essential to run a business and devise strategies at the same time. It is believed that the agents or the managers of the organisations have more idea about the entire corporation than the principal or the owner (Hamidu et al., 2015). This is because of the amount of time and work the agent does with the other staffs of the organisation. The closer relation and constant work relation make the agent well aware about the organisation and its people. Hence, they are given the right to use their discretion in different situation to achieve organisational goals. Most of the organisations give the managers the right to act upon on behalf of the owner or the principal as they trust their decision making ability and sense of responsibility. This not makes the agent or manager more responsible but also motivates them to work more cautiously. Nissan truly believes that the managers have the ability to lead the organisation. The company runs various programs, seminars and training sessions for its employees and managers to make them the future leaders. The "Nissan Way Leadership Academy" program is designed for the managers to elevate and enhance their overall management quality.
Strategic approaches used currently by Nissan in fulfilling their community responsibilities
There are total eight sustainability strategies that have been defined by Nissan for its very own CSR approach (NISSAN MOTOR Co, 2019). Nissan being a leading automaker is positioned uniquely in the market. It has a different way of pursuing actions and they are mostly based on three strategies, namely, Philanthropy, Safety and Environment. Nissan not only finds solutions for the sustainability issues related to the automotive sector, but it also focuses on being the engine for all the CSR activities being carried out in the corporate sector. The CSR Vision of Nissan being is "to be one of the leading sustainable companies in the industry" is based on the thought of enriching people's lives and developing a sustainable society. The following are the eight sustainability strategies of Nissan-
- Environment Safety-
- Value Chain
- Economic Contribution
- Corporate Governance and Internal Control
Figure 5: Nissan's Eight Sustainability Strategies
(Source: NISSAN MOTOR, 2017)
The following approaches and strategies are being adopted by Nissan-
- Nissan currently operates across 20 countries with its automotive production with which it has been able to economy of all these countries through its sales, employment and CSR activities (History, 2019).
- Through programs like Alliance Production Way, Shift Career System, Nissan Way Leadership Academy and its focus on workplace diversity and women empowerment has made it one of the finest employers in the world.
- With the respect to the growing complexities of the environmental issues and climate changes, the automotive industry struggles more to tackle and find right solutions. Nissan believes in the "Symbiosis of People, Vehicle and Nature" philosophy. Nissan is trying to advance the technological development to reduce the CO2 emission by increasing the adoption of vehicles with zero emissions- Fuel-cell electric and battery electric vehicles. It aims at reducing emission by 80% by 2050 with 2005 levels. Along with this, it has been trying to reduce the harmful materials usage in production.
- Nissan is constantly working on passenger safety and is trying to develop automation to reduce the chance of human error accidents
- Nissan achieved 18% reduction in the emission caused due to business trips by reducing the paperwork, meeting time, distance and mode of transportation and meeting used.
- It opened the most advanced paint plant in 2013 across the globe which is capable of reducing CO2 emission by 30%.
- Nissan is known for its business transparency and for its 95% rate of global participation in Anti-Bribery and Export Control Training Policy
[Note: All the above data have been extracted from the Sustainability Report 2017 of Nissan (NISSAN MOTOR Co, 2017).]
Recommendations for a more sustainable CSR strategy for Nissan
Based on the current activities, the following recommendations can be considered-
- Total automation option for vehicles should be reconsidered by the company as it might be affordable for all citizens and technical glitch might turn out to be worse than human error
- By reducing the wastage of material in the production process even more, the company would be able to enhance the environment in a better manner.
- The hiring process should be made more effective in order to avoid the time wasted in providing the option of Shift Career System and Open Career System. Describing the job description to the potential candidates and providing proper overview can help them understand if the job role interests them or not.
The above recommendations will help the company to grow more strategically and carry out its CSR responsibilities in a better manner.
In this report, the discussion about the six core characteristics of corporate social responsibility has been discussed with relation to the chosen organisation Nissan. The current strategic approach and CSR activities carried out by Nissan reflects its capability of satisfying the needs of all the stakeholders and running a business in a more responsible manner. The theories and concepts provide an understanding about how an organisation should proceed with developing their CSR strategies and carry them out in a manner to achieve both business and social objectives. Appropriate recommendations have been provided for Nissan that will help it to operate in a more sustainable manner and contribute towards the society, economy and environment.
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