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Final Project Milestone Two Societal and Global Trends Justine Wheeler Southern New Hampshire University Milestone Two Societal and Global Trends Global and Societal Trends There are several societal and global trends that impact a company CSR Policy. One of the biggest factors is ISO 26000. ISO 26000 is the international standard developed to help organizations effectively assess and address thosesocial responsibilitiesthat are relevant and significant to their mission and vision operations and processes customers, employees, communities, and other stakeholders and environmental impact (American Society for Quality, 2017). Business and organizations do not operate in a vacuum (97.170 – Body Care Equipment, 2017). Their relationship to the society and environment in which they operate is a critical factor in their ability to continue to operate effectively and it is increasingly being used as a measure of their overall performance (American Society for Quality, 2017). ISO26000 provides guidance on how businesses and organizations can operate in a socially responsible way. This means acting in an ethical and transparent way that contributes to the health and welfare of society (Bohlin, 2017). ISO26000 provides guidance rather than requirements,so it cannot be certified to unlike some other well-known ISO standards. Instead, it helps clarify what social responsibility is, helps businesses and organizations translate principles into effective actions and shares best practices relating to social responsibility, globally (Bohlin, 2017). It is aimed at all types of organizations regardless of their activity, size, or location (Bohlin, 2017). When looking at ISO 26000 guidelines, there are seven key underlying principles of social responsibility (Pareto Chart Analysis (Pareto Diagram) ASQ, n.d.). They are accountability, transparency, ethical behavior, respect for stakeholder interests, respect for the rule of law, respect for international norms of behavior, and respect for human rights (Pareto Chart Analysis (Pareto Diagram) ASQ, n.d.). The seven core subjects and issues pertaining to social responsibility are organizational governance, human rights, labor practices, the environment, fair operating practices, consumer issues, and community involvement and development (American Society for Quality, 2017). All these elements effect the policies of a business and have impacted Nike CSR Policy. Another common trend, related to the ISO 26000 core subjects, that has impacted Nike is the triple bottom line. This is a way of measuring an organizations impact on people, and the environment as well as their finances (Mind Tools, n.d.). It is also a way of expressing a companys impact and sustainability on both a local and a global scale (Mind Tools, n.d.). This triple bottom line is comprised of 3 elements, people, planet, and profit. All three are critical elements that impact a companys CSR policy. The concept behind the triple bottom line is thatcompanies are responsible first and foremost to all their stakeholders, and these include everyone that is involved with the company whether directly or indirectly, as well as the planet were all living on. Companies that follow the triple bottom line way of doing business think about the impact their actions have on all the people involved with them, this can include everybody from farmers supplying raw materials, on up to the CEO of the company (Mind Tools, n.d.). They take everyones wellbeing into consideration. The company offers health care, good working hours, a healthy, safe place to work, opportunities for advancement and education, and does not exploit their labor force (by using child laboror offering sweatshop wages). In some cases, the people bottom line can also include the community where the company does business (Mind Tools, n.d). How a company impacts the planet is also important. According to Mind Tools (n.d.), Triple bottom line companies take efforts to reduce or eliminate their ecological footprint. They strive for sustainability, recognizing the fact that going green may be more profitable in the long run. But its not just about the money. Triple bottom line companies look at the entire life cycle of their actions and try to determine the true cost of what theyre doing in regard to the environment. They take efforts to reduce their energy usage, they dispose of any toxic waste in a safe way, they try to use renewable energy sources and they dont produce products that are unsafe or unhealthy for people, and the planet (Mind Tools, n.d.). Companies are also concerned with profit. The financial bottom line is the one that all companies share, whether theyre using triple bottom line or not (The Triple Bottom LineMeasuring Your Organizations Wider Impact, n.d.). When looking at profit from a triple bottom line standpoint, the idea is that profits will help empower and sustain the community as a whole, and not just flow to the CEO and shareholders (Mind Tools, n.d). Every organization should be aware of all three elements and how the choices they make directly affects them. Organizations face many challenges when they try to address the expectations related to people, the planet, and profits. The challenges revolve around the company trying to be sustainable. According to Dr. Kathleen Miller Perkins (2011), sustainability requires companies to take bold steps to move beyond efficiency, beyond compliance beyond just green to a higher level of performance. To be sure, the benefits of energy efficiency and compliance are substantial. Energy-savings programs affect the bottom line directly. Likewise, strategies such as the investment in renewable energy sources alleviate the risk of potential fluctuations in energy availability. And companies that extend their focus beyond energy consumption and generation report that often sustainability initiatives become a springboard for learning and innovation. There is a substantial gap between companies statements and their actions regarding the triple bottom line and their CSR policy. Corporations seem to be falling short in execution of plans for sustainability (Miller-Perkins, 2011). Sustainability requires greater trust, transparency and cross-functional collaboration within an organization (Sustainability Can Leaders Meet the Challenge, 2011).Leaders are challenged to shift from seeking short-term return on investments to longer-term gains and this change can be a hard-sell to high-level decision-makers (Sustainability Can Leaders Meet the Challenge, 2011). Another challenge is that many companies lack a common definition of what it means to be sustainable (Sustainability Can Leaders Meet the Challenge, 2011). Some companies define it in terms of compliance with environmental regulations while others, on the opposite end of the spectrum see it as creating products and processes with a primary focus on efficiency of environmental management and effects on social welfare (Sustainability Can Leaders Meet the Challenge, 2011). Without alignment around the definition of sustainability, leaders cannot craft realistic goals and plans which can actually be implemented (Sustainability Can Leaders Meet the Challenge, 2011). To overcome these challenges, it is essential for leaders/organizations to create a clear vision of where they are headed, create a culture of sustainability, and to develop collaborative relationships (Miller-Perkins, 2011). All of these elements impact a companys CSR policy and have impacted Nike. Evolution of Global and Societal Trends Throughout history global and societal trends are constantly changing and that can affect many aspects of a company. It can affect the laws they have to follow as well as the policies and guidelines they develop. One of the biggest concerns that has a large impact on both trends is our environment. The environment is an essential part of our lives. All the things we do has a big impact on the environment, it can be in either a negative or positive way. That is why it is key for us to think about our actions, and the impact it can have. When it comes to trying to protect and preserve our environment it is essential to take a look at all the businesses around the world and evaluate their impact. Even the smallest of community groups or organizations will, to some extent, undertake activities and practices that may cause harm to the environment (Write an Environmental Policy, n.d.). That is why it is important for every group to be aware of the impact they have on the environment and to develop a policy that reflects their specific activities and practices (Brighter Futures Together, n.d). According to Brighter Futures Together, an environment policy is a way of a group or organization acknowledging their environmentally harmful actions or practices and agreeing to address them in the future. It demonstrates to the rest of the group and the wider community a commitment to protect the environment in a responsible manner. An environment policy can identify and rectify wasteful and harmful current practices, and in some cases, can also highlight cost savings/more efficient environmentally friendly ways of working. Making communities environmentally sensitive plays a vital role in making them sustainable. One function of a sustainable community is to provide places for people to live that are considerate of the environment. An environmental policy is a great starting point for any group serious about creating sustainable communities and doing their duty to protect the environment (Brighter Futures Together, n.d.). Nike has had many challenges when it comes to their business and the relationship with global and societal trends, but how they chose to handle the situations is key. Changing Attitudes The Nike company has faced many challenges, but they have kept a positive attitude and that has helped them push through and succeed. One factor that impacted the attitude of Nike as they were impacted by global and societal trends was the hiring of new employees. As new employees came into the company that had a lot of offer. According to Paine et al., (2016), Parker had established the product testing team and was the designer behind some of Nikes most successful innovations, including the Nike Air Max technology, which was credited with relaunching the Nike brand in 1987 after several years of sluggish sales. This shows that everyone has something to offer and bringing new employees on board gives the opportunity for new ideas. It can motivate others and improve on performance of not just the individual employees, but the company as a whole. The executive team members at Nike were particularly optimistic on the potential for innovations tolerated of environmental and social concerns to drive future growth and profitability (Paine et al., 2016). They were concerned with putting down investments around long-term growth and innovation and not just focused on risk management (Urwritings, n.d.). The leadership team at Nike had a vision for the company, and they made a plan to reach their goal. The most important factor was staying positive and findings ways to overcome their challenges. They improved on being more organized throughout the company by forming committees and delegating responsibilities. They got better at communicating and as new leaders came on board with the company, they were able to get everyone to understand the vision for the company and all the potential it had. They envisioned a day when every product would represent a closed-loop system that generated no waste, and sustainability would be synonymous with performance (Paine, et al., 2016). The leaders of the company realized that Nike is a successful brand that can create change and it can be done in a way that not only improves athletic performance and creates products that are more sustainable, but that also contributes to a better world (Paine et al., 2016). Parker stated, One of the things I want to leave as a legacy in my role at Nike is to make sure that were innovating in every aspect of our business, where it really matters, where we use our brand strength and success to create positive change on a larger scale (Paine, et al., 2016). Nikes goal was to implement sustainability principles into innovation and decision making throughout the organization. They were keeping a positive attitude and looking at the big picture. This is what has helped them improve the internal operations of their company and improve on their corporate social responsibility. Changing Policy Three factors that have influenced the development of Nikes CSR policy is the working conditions in their suppliers factories, the materials being used to make their products and their customers and employees (Newell, 2015). In 2013 there were over a million workers in 785 contract factories and a total of 2.5 million people across Nikes value chain (Newell, 2015). The company has implemented policies supporting workers, demanded their contractors and suppliers meet them, and conducted third-party audits (Newell, 2015). The intentional moves toward change proved successful In 2013, auditors found violations in 16 percent of factories (down from 29 percent in 2012). Incidences of excessive overtime went down to 55 (from 116 in 2012), and 93 percent of factories reported no incidences (up from 87 percent in 2012), (Newell, 2015). According to Newell (2015), After the tragicRana Plaza factory collapse, thepoor working conditions still found in the garment industry were brought under international scrutiny. By then, Nike CSR lead Hannah Jones was alreadyadvocating against manufacturing in Bangladesh and had been doing so for years. But the tug-of-war over mandating good working conditions and the need to cut costs drove Jones and her colleagues to visit Lyric, a 10-year Nike supplier. The working conditions Jonesdescribed to the Wall Street Journalwere so appalling, Nike cut ties with the company afterward, shortly before the Rana Plaza disaster. Nikealso worked with its contract facilities to improve its human resources and implement lean practices. Far from its exploitative practices in the 1990s. The company nowsays they believe that a valued contract factory workforce means better business for the factories and for Nike, and better well-being for individual workers. Factories that value their workerscan build a skilled, productive and engaged workforce (Newell, 2015). In addition to continuing to work on improving conditions for workers, Nike is transforming its materials development and management to address the impact of climate change on the supply chain and reduce its environmental impact. One area of concentration is water conservation. According to Newell (2015), Nike states We are making progress in assessing and understanding our overall water footprint, which helps us identify opportunities for conservation across our value chain. Though we have targeted water efficiency improvements for manufacturing and materials processing, we recognize that efficiency is not the only relevant measure. Water quality, water security and access to water and sanitation also impact our supply chain and our business, affecting everything from the availability of raw materials to the healthand well-being of workers and their communities (Newell, 2015). In 2012, Nike partnered with DyeCoo Textile Systems, a Dutch startup, and adopted their newcarbon-based dyeing processthat dyes garments without using water or chemicals (Newell, 2015). Without water, the process also reduces its energy use by 60 percent since the garment doesnt have to be dried, and it also dyes 40 percent faster (Newell, 2015). The savings are significant. The previous process required25 to 40 gallons of water for every 2 pounds of textiles dyed (Newell, 2015). Until this process, Nikes contracted textile plants usedapproximately 3 billion gallons of water a year, and Nike itself used 325 million gallons (Newell, 2015). In 2013, Nike announced the first water-free dyeing facility in its supply chain at a Taiwanesecontract manufacturer, Far Eastern New Century Corp., and unveiled the name of the sustainable innovation ColorDry to highlight the environmental benefits and intense coloring achieved with the technology (Newell, 2015). In addition, Nike has pledgedthatit willeliminate hazardous chemicals from its global supply chainby 2020 (Newell, 2015). Nike Inc. also recognizes the significance of employees and customers as a stakeholder group that influences the company (Kissinger, 2017). Employees performance directly translates to business performance (Kissinger, Nike Inc. Stakeholders A CSR Analysis, 2017). The interests of these stakeholders include fair compensation, career development opportunities, and a sense of purpose. Nike has addressed these interests through corporate social responsibility policies and programs that focus on internal leadership development, talent management through coaching and mentoring, and team building (Kissinger, 2017). These CSR efforts are expected to maximize Nikes ability to produce more popular and advanced athletic footwear, apparel, and equipment. Nikes corporate social responsibility strategy also gives top priority to customers as a stakeholder group. Customers are significant because they affect the companys revenues from the sports shoes, apparel, and equipment market. About Nike Inc., these stakeholders interests include high quality products and reasonable prices, so the company addresses these interests through significant investments, and they continue to provide products with high quality and advanced technology (Kissinger, 2017). Considering high profitability and growing sales revenues, Nikes corporate social responsibility effectively satisfies the interests of customers as a top-priority stakeholder group. With the policy changes at Nike and the impact of global and societal trends, the company has encountered many opportunities. Opportunities As global and societal trends changed, Nike was presented with several opportunities. One of the biggest opportunities was learning about the internal aspects of the company and the impact it was having on external factors. Due to the poor working conditions and treatment of employees in several of Nikes international factories, Nike representatives met with factory management and demanded compensation for the workers (Case Analysis for Strategic Management for a Sustainable Society, n.d.). This included mandatory reimbursement of withheld wages and transfer to new housing within 30 days (Paine et al., 2016). Along with finding compensation for the workers and introducing a global policy on migrant workers, Nike started an effort to uncover the main causes of the issue (Case Analysis for Strategic Management for a Sustainable Society, n.d.). This became an opportunity for the company because they not only reviewed all 34 of its contract factories in Malaysia, but also their own internal business practices (Paine et al., 2016). Nike discovered that some of the biggest problems were from societal factors such as weak law enforcement and poor education, and some lay in the industry (Paine et al., 2016). Nike also discovered its own systems were a contributing factor (Case Analysis for Strategic Management for a Sustainable Society, n.d.). This resulted in the company re-evaluating their business practices. The leadership team decided that it was time to build greater accountability for adherence to Nikes manufacturing and sourcing standards into the companys core business processes (Paine et al., 2016). This is when the project Rewire was developed and it caused the CR group to rethink its approach to embedding corporate responsibility in the business (Case Analysis for Strategic Management for a Sustainable Society, n.d.). The vision for the project was to tie the impact of the decision making with the decision makers so that we werent faced with compliance versus business (Case Analysis for Strategic Management for a Sustainable Society, n.d.). They would just have a business support doing the best thing for their profits, shareholders, consumers, and the world (Paine et al., 2016). When this project was developed it brought about the opportunity for a much larger business review. This resulted in a 195 million restructuring intended to get closer to the consumer, drive innovation quicker to market, capitalize on expected growth in emerging markets, and establish a more scalable cost structure (Paine et al., 2016). Although this lead to Nike reducing management layers, cutting its workforce by 5, consolidating the supply chain, and reorganizing from a matrix defined by product type and geographic regions to one defined by sports categories and revised geographies, the new structure allowed a much closer relationship with key consumer groups and recognized emerging markets and greater China as their own regions (Pain et al., 2016). The restructuring provided an opportunity to wire sustainability into the business in a new way (Case Analysis for Strategic Management for a Sustainable Society, n.d.). The restructuring also established an internal audit program to provide independent oversight of the system of contract factory audits against Nikes health, safety, and environmental standards (Paine et al., 2016). According to Paine et al. (2016), This allowed the group to focus more on forward-looking activities, such as planning, driving improved sustainability performance, and spurring innovation. It also brought the rigor of traditional auditing and control to bear on sustainability auditing and put the audit and finance teams more in touch with the sustainability discussion. For the first time private equity and venture capital expertise was brought inside the company (Paine et al., 2016). The organization was starting to focus on some longer-term opportunities that might not have hit the priority list in the past (Case Analysis for Strategic Management for a Sustainable Society, n.d.). Challenges Nike has faced many challenges as the company has been impacted by global and societal trends. They have been impacted by the economy, they had to develop new policies to keep up with new laws and regulations, they had to develop committees to oversee the new policies and different aspects of the company, and they had to improve on their communication. Communication is a key factor in any company and can greatly impact their success. Nike had to get all the leaders to effectively communicate with internal and external stakeholders. Everyone within the company had to understand what the new policies were and why they were being implemented. They had to listen to and understand the changing trends and make sure they had satisfied customers as well as employees. They also needed to be able to communicate with their suppliers and all of the factories located throughout different countries. One of the biggest challenges was authenticity. The company needed to stay true to who they are, making sure that even though they are constantly being impacted by the changes in global and societal trends they dont forget what their mission and vision is. Nike also dealt with the challenge of their international factories working conditions. Even though the company implemented extensive monitoring and oversight, labor issues, particularly excessive overtime and code of conduct violations at contract factories, continued to arise (Paine et al., 2016). Through news reports out of Australia, Nike learned that one of its long-time contract factories in Malaysia was housing its workers, mostly migrants from several surrounding countries, in deplorable facilities, garnishing their wages to pay for work permits and recruitment fees, and withholding their passports to prevent them from leaving (Paine et al., 2016). Another challenge Nike faced was the economy. This not only effects the company by what they could afford and how profitable they were, but it impacted their customers. In 2008, the world was hit by a financial crisis and consumers clamped down on spending (Case Analysis for Strategic Management for a Sustainable Society, n.d.). This resulted in Nikes revenues, profits, and futures orders all slowing in early 2009 (Paine, et al., 2016). References American Society for Quality. (2017). What is ISO 26000-Guidance on Social Responsibility. Retrieved from http//asq.org/learn-about-quality/learn-about-standards/iso-26000/ Bohlin, T. (2017, April 11). ISO 26000 – Social responsibility. Retrieved from https//www.iso.org/iso- 26000-social-responsibility.html Brighter Futures Together. (n.d.). Write an environmental policy. Retrieved from http//www.brighterfuturestogether.co.uk/brighter-futures-together-toolkit/write-an- environmental-policy/ Kissinger, D. (2017, February 07). Nike inc. stakeholders a CSR analysis. Retrieved from http//panmore.com/nike-inc-stakeholders-csr-analysis Miller Perkins, K., Dr. (2011, March 15). Sustainability can leaders meet the challenge Retrieved from https//www.environmentalleader.com/2011/03/sustainability-can-leaders-meet-the- challenge/ Mind Tools. (n.d.). The triple bottom line measuring your organizations wider impact. Retrieved from https//www.mindtools.com/pages/article/newSTR_79.htm Newell, A. (2015, July 19). How nike embraced CSR and went from villain to hero. Retrieved from https//www.triplepundit.com/special/roi-of-sustainability/how-nike-embraced-csr-and-went- from-villain-to-hero/ Paine, L. S., Hsieh, N.-H., Adamsons, L. (2016).Governance and sustainabilityat Nike. HBS no. 9-313-146. Boston, MA Harvard Business SchoolPublishing. PAGE PAGE 2 MILESTONE TWO PAGE 1 Running head MILESTONE TWO Y, B8L 1(IzZYrH9pd4n(KgVB,lDAeX)Ly5otebW3gpj/gQjZTae9i5j5fE514g7vnO( ,[email protected] /[email protected] 6Q

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