Part 1: A Case Study and Analysis of Honda Corporate Social Responsibility
The case study in this paper is the Honda Company. Honda Company is a multinational automobile company that is based in Japan. Since its incorporation in 1948, Honda expanded to become of the leading multinational companies in the world since 1959, reaching a production level of 400 million products by 2019 (Muniandy et al., 2020). Honda expanded its operations and managed to reach diverse countries such as America, Europe, and China. The success of the company has been influenced by its strong relationship with the large society, which is influenced by its strategic management which influence. One factor of strategic management that influences the interaction that Honda Company has with a wide society is its corporate social responsibility. This section examines how Honda Company uses its corporate social responsibility to uphold good relationships with the employees, customers, and the entire community.
Corporate Social Responsibility
Corporate social responsibility is an important part of the everyday operation of Honda Company, whereby it ensures that its decisions and actions uphold the welfare of its internal and external stakeholders. Rasche et al. (2013) argue that corporate social responsibility helps a company to identify areas of interest to the stakeholder. Honda has established measures to promote its relationship with the customers by targeting the triple bottom factors, social, economic, and environmental.
Relationship with Employees
As part of the internal stakeholders of a company, employees play a critical role in promoting the success of an organization. In this regard, Honda Company has put in place measures to promote the welfare of its employees in a bid to enhance good relations and promote their performance (Miles et al., 2006 p.197). Firstly, Honda Company has a fundamental personnel policy, which is guided by the principle of respecting and promoting the independence of the employees, upholding fairness, and uphold mutual trust. The company ensures that all the employees are treated fairly with regard to function allocation and benefits. Honda Company. (2021a) points out that Honda Company embraces the Egalitarian’ culture, which is characterized by ensuring that all the employees are wearing the same color, share foods in the cafeteria, and having top managerial offices on the production floor.
Honda ensures that its employees have a favorable and safe working environment. The company has strongly embraced diversity whereby it attracts talent from diverse cultural and racial backgrounds, gender, religion, and sexual orientation. Honda Company (2021a) asserts that Honda ensures that employees have a working environment that is conducive regardless of their differentiating parameters. The success of developing good relationships with the employees is based on the fact that the company upholds open and honest communication, in addition to promoting a culture of diversity and inclusivity. Employees are orientated and indoctrinated into the strong values that that enhance good relations with fellow employees. Additionally, Honda Company encourages its employees to join labor unions, with the aim of enhancing good labor relations. Generally, the company has laid strategies of addressing issues raised by the employees, in order to enhance good relationships.
Relation with Society
Honda relates with society by engaging in various social activities that promote uphold the welfare of the society. The activities that are embraced by Honda Company for the benefit of the company are ingrained and guided by its policies. One of the policies that are embraced by the Honda Company is the policy against Human Trafficking. The Honda Policy Against Human Trafficking aims at upholding good relationships with the society upholding moral values with regard to the production process. According to Honda Company (2021a), the policy aims that ensuring that the suppliers of Honda company do not embrace unscrupulous methods in cutting their cost of production such as hugging human slaves, forced labor, or child labor. The company ensures that its stakeholders, such as agents, contractors, suppliers, and vendors, adhere to Federal Acquisition Regulations. For instance, child labor is termed by the International Labor Organization as one of the pressing problems whereby 88 million boys 64 million girls are in child labor (ILO, 2021). By countering the issue of child labor, the company has managed to establish a good relationship with the members of the society and uphold its global image.
In addition to standing against human trafficking, Honda Company has continued to support various activities in society. The company engages in activities that support college students such as supporting Historically Black Colleges and Universities. For instance, in 2020, Honda awarded $200,000 in grants to support the music education program. The company holds a Honda Campus All-Stars College (HCASC) which is aimed at honing new talents in various activities. According to Honda Company. (2021b), Honda holds a Team Honda Week of Service, whereby the company engages in coordinated community services. For instance, in the 2019 Team Honda Week of Service, the company attracted approximately 25,000 volunteers that managed to give meals to 592,000 people, with 65 tons of food, in addition to raising $100,000 for non-profit organizations. With the constant involvement of Honda Company with various issues that affect society, the company has managed to establish a strong brand image in society.
The environment is important to every organization. The measures that an organization uses to conserve and preserve the environment can have a considerable impact on its relationship with society. To establish a good brand image, and enhance its relationship with the stakeholder, Honda has laid out measures’ environment. Firstly, Honda has continued to invest in research and development in order to release vehicles with lower emission rates, as well as turned to the production of electric vehicles. Apart from its production process, Honda has measures that help to reduce waste and recycling of its waste at every level of the production process.
Part 2: Theoretical Analysis
The power relations between Honda and its larger society are influenced by its social corporate responsibility. The power relations in this section focuses on corporate social responsibility and its influence on Porter’s Five Forces. Corporate social responsibility incorporate diverse parties in the operation of an organization in order to safeguard their interests. There are various theories that can be used to explain the power aspect as regards CSR. In this section, the focus is one stakeholder theory, Carroll’s Pyramid of CSR, and institutional theory. The stakeholder theory provides a good explanation of the relationship with regard to power that a company is able to uphold by embrace corporate social responsibility (Rasche et al., 2013). All the three theory provides an understanding of how companies establish their power as they relate with the larger society.
Stakeholder Theory
An organization is influenced by diverse stakeholders either directly or indirectly. The stakeholders of an organization can either be internal or external stakeholders. Miles et al. (2006) define internal stakeholders as the people with direct influence on a company, such as employees, shareholders, and owners (p.196). On the other hand, external stakeholders are the parties that do not have a direct influence on the operation of an organization such as members of the society, customers, and government agencies. According to the argument by Soundararajan et al. (2018), stakeholder theory stipulates that the major role of an organization is to establish good relationships with its stakeholders. The stakeholder theory focuses on enhancing the interest of the stakeholders, by aligning with the concept of CSR. The power relation between a company and its stakeholders is strongly guided by corporate social responsibility.
In the case of Honda Company, CSR is an important part that helps it to maintain a good relationship with its internal stakeholders. As mentioned above, Honda has strong power over its internal stakeholders such as employees and shareholders. Honda has continued to ensure that its employees have a favorable work environment that is characterized by fairness, tolerance, and integrity (Hameed et al., 2016). The power that Honda Company has on its employees is based on how it enhances employee loyalty. The company has continued to establish a conducive environment for the employees in a bid to promote good relations. For instance, Honda ensures that all the employees are treated fairly regardless of their social, racial, or religious backgrounds. The company has a strong communication process that provides employees with an opportunity to participate in the communication process. Because of its strong connection with the employees, Honda has managed to establish a strong power over the employees which is evident through its low employee turnover.
Carroll’s CSR Pyramid
Carroll’s CSR Pyramid provides the basic factors that every organization should fulfill in order to promote its corporate social responsibilities. According to Soundararajan et al. (2018), companies should meet the four levels of corporate social responsibility; economic, ethical, legal, and philanthropic as shown in figure 1 below. The economic level of CSR is aimed at increasing the returns of a company, which can include reducing the overall cost of operation. Ethical measures include the values, behaviors, and norms of the company. The legal level of a CSR, according to Soundararajan et al. (2018), includes adhering to the laws and regulations of the host country. Lastly, the philanthropic level of CSR includes supporting non-profit organizations for humanity course. Aligning with the four levels of CSR as stipulated in Carroll’s CSR Pyramid influences the connection of a company with its stakeholders.
Figure: Carroll’s CSR Pyramid
Source: (Rasche et al., 2013).
The CSR practice embraced by Honda Company aligns with Carroll’s CSR Pyramid, whereby it fulfills all four levels. Honda Company has continued to establish measures to promote its performance. For instance, Honda has turned to the development of electric vehicles in a bid to promote its income and counter the stiff competition from electric companies such as Tesla. Additionally, by turning to recycle, the company has managed to reduce wastage, in addition to enhancing its corporate image. From graph 2 below, Honda has been recording high revenue, from 2012 to 2019, whereby it recorded approximately 3.1 million and 5.3 million respectively (Wagner, 2020). With regard to ethics, the company has established the right measures to exhibits the right moral values. Honda is guided by a code of ethics that is based on “Respect for the Individual”. The aim of the company is to ensure that the employees upholds the right moral values with the aim of promoting its image. It is because of these moral values that Honda has enhanced its image and in the industry and wins more customers.
Figure: Worldwide number of automobiles sold by Honda Group
From FY 2002 to FY 2020 (in 1000 units).
Source: (Wagner, 2020).
Honda has a strong power in society, a position that has hugely been influenced by its engagement with the company. In the argument by Swanson et al. (2020), the power that an organization has in society is influenced by the level of trust that people have against the company (p.91). The social capital theory can play an important role in promoting the success of an organization. Social capital is enhanced by the level of interaction that stakeholders have with an organization (Swanson et al, 2020, p.91). The social capital theory is linked with CSR in the sense that that CSR can enhance the social capital of a brand in the market. A good example is how Honda has continued to engage in various social activities such as supporting young talents, and women’s sports clubs which have to enhance the connection of the company with the members of the society. Honda Company (2021b) notes that Honda constantly ensures it supports the communities through its Honda Foundation by equipping young people with science, technology skills, whereby it managed to give approximately $41 million to organizations across the U.S. The huge power over the society because of its ability to meet its various needs and issues such as addressing the environment, and helping women, and nurturing new talents.
