Chapter 3 - Socially responsible operations strategy
In the last few years, most firms have greatly increased their efforts and the resources they have devoted to corporate social
responsibility (CSR). It is clearly an issue that is (or should be) central to operations generally, and particularly to how operations
strategy is judged.
Panel (a) adalah classical view yg menyatakan semakin “boros” untuk CSR, financial performance bisa menurun, sedang Panel
(b) adalah modern view yang menyatakan ada hubungan linear antara investasi di CSR dengan financial performance.
Operations strategy harus diarahkan ke konsep modern.
Key questions:
1. What is corporate social responsibility (CSR)?
o CSR is about how a business takes account of its economic, social, and environmental impacts in the way it operates
maximizing the benefits and minimizing the downsides.
o It is important to operations strategy because, of all the functions of an organization, it is operations that can have the most
practical impact on its CSR performance.
o Although there are many definitions of CSR, they usually include five dimensions: environmental, social, economic,
stakeholder, and voluntariness.
2. How does the environmental dimension of CSR affect operations strategy?
o Environmental sustainability is generally taken to mean that the overall increase in social and economic capital resulting
from development actions more than compensates for the direct or indirect loss or degradation of the environment.
o One way of demonstrating that operations, in a fundamental way, is at the heart of environmental management is to consider
the total environmental burden (EB) created by the totality of operations activities.
o Most dramatic environmental contamination disasters are caused by operational failure. In a broader sense, all operations
management decisions have an environmental impact.
o There are many ways in which operations strategy is concerned with waste. For example, decisions in product and service
design significantly affect the utilization of materials both in the short term as well as in long-term recyclability.
Increasingly, companies are making formal reports and sintroduction stage
o tatements relating to their environmental practice.
3. How does the social dimension of CSR affect operations strategy?
o The fundamental idea behind the social dimension of CSR is that businesses should accept that they bear some
responsibility for the impact they have on society and balance the external ‘societal’ consequences of their actions with the
more direct economic consequences.
o The social dimension of CSR deals with the human aspects of operations behavior. It involves stakeholders’ perceptions
and feelings.
o Emerging social issues include temporary and often unprotected but flexible employment practices, such as in the so-called
‘gig economy’, and outsourced/globalized sourcing.
4. How does the economic dimension of CSR affect operations strategy?
The economic dimension of CSR involves attempting to understand where extra expenditure may be necessary in order to adopt
ethically responsible practices against the savings and/or other benefits that will accrue from these same practices.
5. How does the stakeholder dimension of CSR affect operations strategy?
o CSR includes understanding the effects of operations management decisions on all stakeholder groups.
o Groups who are affected by ethical management practices include the organization, the customers, staff, suppliers, the
wider community, and the organization’s shareholders.
6. How does the voluntariness dimension of CSR affect operations strategy?
o The voluntariness dimension of CSR is concerned with the extent to which a fully legitimate engagement with CSR requires
an organization to go beyond merely complying with legally established regulations.
o The essence of the voluntary dimension of CSR is ‘corporate philanthropy’, which is the charitable donation of profits and
resources given by corporations to non-profit organizations for the good of society.
7. How can operations managers analyze CSR issues?
o Analyzing CSR issues is difficult in the context of operations management decisions, partly because of the complexity of
those issues.
o Two models can be used to understand how to approach CSR. These are trade-off analysis (including the idea of the efficient
frontier) and risk management.
