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About Me >>   MBA Finance >>   MBA-635 Ethics, Corporate Culture & Social Responsibility

SNHU - MBA-635 Ethics, Corporate Culture & Social Responsibility
Written by: Chris Bell - March, 2018

Corporate Social Responsibility Decision Making & Impact in Business Environment

Decision Making

Decisions

Based on the employee salaries and benefits, and their work environment, a clear business decision will be made by WesBell to be sure they follow through with a minimum wage of $15 per hour plus $2 in addition for working the third shift from 11:30pm to 8am. It will benefit WesBell to offer fair starting wages with a process that pays the employees more for each station or process they understand, and putting someone in charge to stock the kitchen area with snacks and beverages. Next, appoint the same team that certified the company to the ISO 9001 standard to prepare to certify them to the medical ISO 13485 standard by the end of 2018. According to ISO.org, "ISO 13485:2016 specifies requirements for a quality management system where an organization needs to demonstrate its ability to provide medical devices and related services that consistently meet customer and applicable regulatory requirements." Externally, their medical customer is requesting it and internally they can prepare the documentation and to aware the employees about the changes to come. By adhering to multiple quality standardization's their customers will more quickly understand their commitments to quality with a certification that meets the criteria of third party audits.

WesBell Employee Appreciation CSR

In the wire industry Underwriter's Laboratories (UL) approves almost all insulated wire to meet certain voltages and temperatures in its electrical environment. According to UL.com, their mission statement includes but is not limited to, "To promote safe living and working environments for people by the application of safety science and hazard-based safety engineering - To be a good example of corporate citizenship and social responsibility." Without their approval stamped on the wire or cable, UL1007 for instance, the manufacturer is simply claiming that the wire meets those attributes, but with the stamp it's instant gratification. Likewise, the ISO certifications instantly approve WesBell as a vendor to many large Original Equipment Manufacturers (OEMs) that need wire harnesses for regular monthly shipments. There are also medical customers that need cut pieces of tubing for medicine to travel through, and the internal measurements are critical to be sure the correct amount of liquid travels at the correct speed. The ISO medical standard follows a quality process that's audited and approved by the customer as the best way to cut and inspect medical grade tubing products. A team of 2-3 people will be able to work on it throughout the year. Rushing is not possible when employees need to be trained to adhere to new processes and for a philosophy to be built with the team that quality is to always be improved because perfection is expected by customers.

The process used to gauge the employee's salaries will be to hire all new employees at $15 per hour with a bonus of $2 for the third shift. All current employees will be raised to at least $15 and receive up to three raises of $0.50 per year for proving that they can operate in at least three main stations or understand how to run different equipment, all of which will be on a master list and assessed during annual evaluations. Each subsequent year the employees will be more valued and paid accordingly, and even though it costs the company more money there's a priceless asset hidden in companies that have happy employees. Health care will have free monthly premiums for individuals after 3 months of employment due to the level of controversy in the news lately.

WesBell Employee Minimum Wage CSR

The quality management team will need to create a plan with a timeline, laid out to go through each of the current ISO 9001 documents, read the ISO 13485 medical standard, and note each of the changed or additional processes and procedures. It appears to be good news that ISO.org mentions this in their 13485 documentation because WesBell is already approved for ISO9001:2015, "While this is a stand-alone standard, it is based on ISO 9001:2008, which has been superseded by ISO 9001:2015. For the convenience of users, Annex B shows the correspondence between this International Standard and ISO 9001:2015." Once the paperwork is completed and the team agrees to a plan, it needs to be implemented through the next level of management and embedded into each of the individual staff members. There also needs to be an incoming training process for new employees to make sure that they always adhere to the processes. At the manufacturing level the employees can sometimes lose sight of the customer, so WesBell discusses the fun assemblies with their employees, such as when they're being used in McDonald's fryers, branded car control panels or hanging off the ears of news casters. It should subconsciously help the employees keep quality at the tip of their mind, and it will force them to think of their employer, WesBell, every time they buy French fries in the future.


Culture

WesBell's decisions to change the structure of their employee's salaries and to certify themselves to the medical quality standardization impacts their business sustainability in a positive way for the long term. The design and implementation of an organization's quality management system is influenced by the organizational environment, changes in that environment, and the influence that the organizational environment has on the conformity of the medical devices (ISO.org, n.d.). When happy employees work hard and meet difficult quality standards WesBell will secure long term relationships with customers and open the door to potential customers that need a vendor with a medical certification. Hopefully the word of mouth from the happy employees will have new candidates knocking on their doors looking for employment rather than the other way around.

The elements of corporate culture and corporate citizenship will be improved with a path of growth for each employee. WesBell has been turning distribution customers into contract assembly customers which creates more work through services, production scheduling and quality control. WesBell has a clear path to management by getting the employee excited for raises through cross training. Once an employee understands the stations and processes in WesBell's production line capabilities, the employee automatically promotes themselves into the position of management since they will in turn be expected to train the next employees that decide to work for WesBell in the future. WesBell's corporate social and ethical responsibility to its employees is clear, to train them into more valuable employees so that they soon become managers, increase their salary and improve their way of life outside of the company.

Corporate Culture and Social Responsibility

Philanthropy, community involvement and the environment haven't been at the forefront of WesBell's business plan, mission or values as a small company with less than 30 employees, however they donate quarterly to the Nashua, NH soup kitchen and annually to a breast cancer awareness event. According to Janet Topolsky in 2008, the director of the Aspen Institute Community Strategies Group, "Exactly what distinguishes philanthropy as community based? It includes any philanthropic fund created through giving and investment from local or outside sources that is dedicated to benefit a specific rural place and its people (p. 17)." Perhaps, instead of sending a check to both locations, WesBell can start to involve their employees by offering their time to volunteer at the soup kitchen or the annual breast cancer event. Giving time rather than money makes people feel good about their contribution to their community, so WesBell can post a signup sheet once a month for anyone that wants to volunteer within the local community at different events. And as a philanthropic initiative WesBell could also donate a percentage of the monthly profits to the event. As WesBell involves themselves into the community they also has a way of getting paid back in terms of marketing and advertisement because numerous people will attend these events and possibly see, hear or speak to the employees.


Stakeholders

Certain stakeholders of WesBell's will be directly affected by their business decisions such as their vendors, customers and employees. Most positively, their customers will experience a vendor that has quality at the top of their list, they'll receive products that rarely fail incoming inspections and constantly meet the tightest tolerances. Customers that previously required the ISO 13485 medical certification of their vendors will now be able to purchase from WesBell. However, it's possible that customers might experience delays during the preliminary stages while WesBell implements new processes, trains their staff and fits the new quality checks and balances into their procedures. WesBell should warn their customers of the upcoming challenges of getting certified and let them know that their goal is to continuously improve every aspect of their company, and there might be some delays during the process.

WesBell's vendors will be held to tighter tolerances as well, to meet the consistency demands of their customers. Incoming product verification processes will be put in place to assure that their customers end up with a quality product every time. Vendors that struggle to meet those demands will be cut and new vendors will be found. History has shown that while some companies don't have a problem adjusting to changes, some fear it and avoid it until they lose the sales completely. There's a saying, "Better before cheaper", that says the lowest price isn't usually the best product, but a higher price doesn't necessarily mean that a certain product is that much better either. However, with due diligence in place and an incoming product verification process in place, WesBell will carefully select their vendors based on their new quality objectives to further meet the demands of their customers and to be a step ahead of the competition.

The employees will be affected by the business decisions because they will need to adapt to the new processes and overall philosophy of increased quality control. Fortunately, WesBell's staff is already accustomed to the nature of an ISO standardization, so hopefully some additional requirements will be adapted to smoothly, such as following through with corrective action reports that occur during audits and through the collection of nonconforming reports. Errors that occur more frequently will need a change of process, and systemic issues occur when multiple corrective action plans have also failed. ISO more urgently requires companies to prevent and manage risks associated with potential errors, such as completing a checklist before sending an order to the shipping department. Documentation is necessary for proof during the audit that the company is doing what they say they're doing. Many things about a company are unique but ISO standards are proven to be effective across multiple industries of numerous years. Furthermore, required ISO documentation can prompt difficult interactions with employees when they make mistakes and management needs to take disciplinary action.


IMPACT

Community

The community will be affected by WesBell's business decisions because, according to Weiss (2014), "Each year, thousands of people die and millions are injured from the effects of smoking cigarettes, and using diet drugs, silicone breast implants, and consumer products such as toys, lawn mowers, appliances, power tools, and 5 Consumer Stakeholders and the Environment 291 house hold chemicals, according to the Consumer Product Safety Commission (CPSC)." WesBell sells wire, cable and harnesses directly to end users within the community, so they need to be sure that their products are safe and free of harmful toxins and chemicals. For example, upon request, WesBell adds a spiral stripe of paint to some wires such as ground wires that are typically colored green with a yellow stripe. They also commonly use solder and tin when manufacturing wire harnesses which was a big initiative in the RoHS compliance standard due to the level of lead used in solder. According to RoHSGuide.com here are the first two banned substances listed on their website, "The substances banned under RoHS are lead (Pb), mercury (Hg)…" which forces WesBell to be careful when using solder and tin for their assemblies. The two basic types of solder are 99.9% lead free and 40% lead. The solder with lead adheres to copper strands better which pushes customers to request the lead version for those particular requests.

Community Affected by WesBell CSR

WesBell also serves their community through their customers by supplying wire harnesses that go into appliances and electronic devices which will soon end up in the hands of individuals. According to Rowe in 2017, "The notion of creating shared value is that the competitiveness of a company and the health of the communities around it are mutually dependent, it could be argued that economic development practitioners have understood this concept of strategic development for some time especially those at the front line of regional or community economic development. (p. 153)" WesBell needs to be committed to manufacturing electronically safe products because a faulty wire harness deep inside of a washing machine or dryer could be harmful to the person using it when it fails. Of course, it's on WesBell and the washing machine manufacturer to have quality processes in place to catch a failing part, however, sometimes it's much later when two wires connect with each other and short, once the appliance or device is in the customer's hands.


Global Environment

WesBell RoHS Compliant Global Environment

There was a time when corporations used the environment as a free and unlimited resource. That time is ending, in terms of international public awareness and increasing legislative control. (Weiss, 2014) WesBell is noticing a clear path towards long term sustainability of the global environment through initiatives such as WEEE, RoHS, REACH and most recently, the Securities and Exchange Commission (SEC) has released a Conflict Minerals Reporting mandate for public companies. According to SEC.gov, "In 2010, Congress passed the Dodd-Frank Act, which directs the Commission to issue rules requiring certain companies to disclose their use of conflict minerals if those minerals are "necessary to the functionality or production of a product" manufactured by those companies. Under the Act, those minerals include tantalum, tin, gold or tungsten." Tin is the most concerning metal on the list for WesBell since most of their bare copper strands are coated with tin (tinned copper) and since they use solder and tin within their wire harnesses. While WesBell doesn't directly respond to the SEC, many of their customers need to which trickles down the line and forces WesBell to supply the country of origin for items that include tin, "Under the final rule, a company that uses any of the designated minerals is required to conduct a reasonable ‘country of origin' inquiry that must be performed in good faith and be reasonably designed to determine whether any of its minerals originated in the covered countries or are from scrap or recycled sources. (SEC.gov)"

Waste Electrical & Electronic Equipment (WEEE) regulates how companies dispose of electrical and electronic equipment because it's shown to be harmful to the environment. According to the European Commission website, "WEEE is a complex mixture of materials and components that because of their hazardous content, and if not properly managed, can cause major environmental and health problems." WesBell doesn't manufacture electrical or electronic equipment, but they consistently scrap wire and cable products with copper and heavy insulation. They make sure to use reputable metal scrap companies that dispose and recycle the copper and insulation properly. Technically, WesBell isn't responsible for how the metal scrap company disposes of their materials, however, to support the environment, WesBell chooses to use more reputable companies that also care about the environment.


References:

European Commission (n.d.). Waste Electrical & Electronic Equipment (WEEE). Retrieved from: http://ec.europa.eu/environment/waste/weee/index_en.htm

International Organization for Standardization (n.d.). ISO 13485:2016 Medical Devices. Retrieved from:
https://www.iso.org/standard/59752.html

RoHS Guide (n.d.). RoHS Compliance FAQ. Retrieved from: http://www.rohsguide.com/rohs-faq.htm

Rowe, J. E., & McLaren, D. (2017). EXPLORING COMPETITIVE ADVANTAGE IN A REGIONAL COMMUNITY CONTEXT. Australasian Journal Of Regional Studies, 23(2), 153.

SEC.gov. (n.d.). U.S. Securities and Exchange Commission. Disclosing the use of conflict minerals. Retrieved from:
https://www.sec.gov/opa/Article/2012-2012-163htm---related-materials.html

Topolsky, J. (2008). Growing Local Giving and Living: Community Philanthropy in rural Places. Retrieved from:
https://assets.aspeninstitute.org/content/uploads/...pdf

UL.com. (n.d.). About UL. Our Mission: Working for a safer world since 1894. Retrieved from:
https://www.ul.com/aboutul/our-mission/

Weiss, J. W. (2014). Business ethics: a stakeholder and issues management approach. San Francisco: Berrett-Koehler Publishers, Inc.