Monthly Archives: September 2014

I would like to expand further on Kaylee’s blogpost regarding Nestle’s lack of corporate social responsibility from this article.

While the content of the article that Kaylee has selected is interesting, it is not a surprising news. This is because water is a natural resource that is very difficult and expensive to exclude people from using them. Nestlé ‘taking million litres of fresh water annually from a valley of BC province’ without ‘paying a penny’ is to be expected because water is a common access resource. The main issue of Nestlé‘s actions is the lack of corporate social responsibility that they are displaying to their stakeholders.

Following on, I agree with Kaylee’s point that although Nestlé are supporting the government’s decision to implement new regulations on the usage of the water, this may be mainly an attempt to appeal to their stakeholders. In this case, I would recommend for the government to involve itself and implement new policies. The lack of regulation on the usage of groundwater enables companies such as Nestlé to take advantage of the natural resources for their own benefit. It is unlikely for Nestlé to change their actions because of the affect it would have on their cost of production and profits made. Thus, it is imperative for the government to employ a policy that will protect the groundwater in BC from being taken for free to avoid large external cost to the future generations regarding the sustainability of the water. This would force Nestlé to rethink their actions and change it, which hopefully leads them to improve their corporate social responsibility. 

Image and website source:

http://www.timescolonist.com/news/local/wild-west-of-groundwater-billion-dollar-nestlé-extracting-b-c-s-drinking-water-for-free-1.587568

British Columbia is setting up a new business model aimed at attracting “socially conscious investors” to make it easier for people to make money and give back to the community. The Community Contribution Company (C3) caps a company’s profit at 40% and the remainder goes to social causes such as homeless shelters and recycling programs. Hence, C3 attempts to combine business and social value to create a profitable business. C3 is modelled from a similar program in the United Kingdom called Community Interest Companies (CICs).

Many claim that this new model has “too many restrictions and can create too much red tape”. Red tape creates barriers to entry for companies and investors. Furthermore, some argue that this new business model may only have a small impact and fail to create more jobs. However, through introducing this new business model, it generates local employment in B.C. and more “economic wealth”. Although only three companies have registered to the C3 program, CICs in UK has more than 6000 companies registered. As this program develops in BC, it is likely to attract more companies to register. Through this, BC will be able to effectively move more capital into important social issues such as unemployment and charity.

Article and image source:

http://www.theglobeandmail.com/report-on-business/small-business/sb-growth/going-global/new-business-model-lets-bc-companies-blend-social-values-into-bottom-line/article13631725/

After the Tohoku 2011 incident, “most of the public (were) broadly against restarting nuclear plants”. However, the absence of electricity from power plants increased the electricity cost and caused “a series of trade deficits”. Moreover, Tokyo Electric Power (TEPCO) provides many jobs for the economy and is the main source of electricity in Japan.

According to Friedman, the social responsibility of a business is to make profits while ‘conforming to the basic rules of society’. TEPCO having applied for a “safety check […] to restart two reactors”, follows Friedman’s definition of social responsibility as this would increase TEPCO’s profits. However, should the national economy really be the prime concern? It is unethical for TEPCO to continue using power plants when citizens nearby risk exposure to radiation. While TEPCO’s needs may be satisfied, the citizens’ interests are neglected. This goes against Freeman’s stakeholder theory whereby the needs of all stakeholders must be satisfied for a business to succeed.

Hence, TEPCO needs to provide electricity through sustainable methods. In the short run, TEPCO would face extreme changes to its company as it switches from power plants to green technology. In the long run, TEPCO would be viewed as a more ethical firm with good business practice.

Website and image sources:

http://www.economist.com/news/asia/21589912-riskiest-part-yet-fukushima-clean-up-soon-begin-high-alert

http://www.tutor2u.net/business/strategy/business-ethics-introduction.html

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