You are on page 1of 8

New Balance & Community Social Responsibility


Case Study: New Balance & Community Social Responsibility Matthew Mrnak Southern New Hampshire University

as well as others. Although the company was mainly known to be American made. In fact. 18). To this day New Balance shoes tend to be on the more expensive side than other manufacturers. and Sketchers (Dr. Sports shoes remained to be the main focus for New Balance.New Balance & Community Social Responsibility 2 An American footwear manufacturer. After being convinced of the high potential and trying the New Balance shoes himself James Davis purchased the company together with his wife Anne. para. Massachusetts in 1906 by a 33-year old British emigrant William J. gel inserts. Despite abstaining from expensive advertising campaigns and professional athletic sponsorships. New Balance. "It is believed that Riley came up with the name "New Balance" by observing chickens in his yard and demonstrated the way his arch supports worked by keeping a chicken foot on his office desk. 3). pg. Riley. but much like its history it differentiates themselves with features such as heel counters. . for example wide or narrow feet. New Balance: Developing An Integrated CSR Strategy. Warrior and Brine. He explained to customers that the chicken's three-clawed foot resulted in perfect balance" (New Balance. Vesela Veleva. the company was ranked fourth worldwide in the athletic footwear department below leading competitors such as Nike. The company continued to grow and experience a significant addition in the late 1990's with the aquisitions of branch such as Dunham. and a wider selection of sizes that will cater to a variety of sizes. was founded in Boston. Adidas. operations for apparel and other accessories lead the company to other countries like China and Taiwan. He started to design and build arch supports to ease the pain for consumers who spent a majority of their day on their feet. unlike its' competitors. New Balance has grown to become one of the largest makers of sports footwear in the world.

New Balance continued to encourage employees to make suggestions to improve the company. The Corporate Citizenship Management Framework (CCMF) was used to help assist and analyze New Balance's understanding and ability to implement corporate social responsibility within the organization. and productivity. This is evident in the shift from focusing on profits to where companies are aspire at find a balance between people. Rob DeMartini. The CCMF assisted organizations to manage corporate citizenship as well as create a better understanding. broadly define as “a commitment to improve [societal] well-being through discretionary business practices and contributions of corporate resources (Korschun.) Since its introduction in the 1950s. "green". D. ethical and environmental responsibility. was hired as CEO in hopes to lead the company into a more recognized global brand. CSR has increasingly gained importance and influence within the corporate world and has evolved from revolving mainly around philanthropy of powerful individuals to incorporating corporate social. workers costs. This new outlook demonstrates that stakeholders are demanding organizational communication and expect companies to recognize their impact on their surroundings. the corporate world has experienced a pronounced increase in focus on organizations’ ethical behaviors and responsibilities towards their environments. and profit. In a four year span productivity as improved by 49 percent in reducing wasted materials. It consists of determining and managing corporate practices in four key . These societal expectations pressure companies to act responsible in regards to not only their external but also their internal environments. The terminology for this organizational shift is Corporate Social Responsibility (CSR). Over the past several decades. Then in 2007.New Balance & Community Social Responsibility 3 A lean production system was enabled in all domestic factors in 2009 to improve and reduce waist.

products and services. operations. some understood RL priorities and goals while others thought is consisted of philanthropy and volunteering.New Balance & Community Social Responsibility 4 areas which consist of overall governance. with focus on people and domestic manufacturing" (Veleva. there is no other company like New Balance. Executives thought of CSR a cost instead of a driver that measured relationships. and others it was about compliance. Employees felt a sense of pride in not only their own work but the company's as well. employee support. Employee's were proud to say they worked for New Balance and felt valued largely due to management's quick response and taking situations seriously. pg. Massachusetts ranging from senior executives to supervisors and factory workers. Although RL consisted of key elements of CSR it often lacked in urgent areas like accountability. 8). values and integrity. Amongst those surveys is was uncovered that New Balance's top strengths were its history. For example. and community support. transparency. pg. Overall governance can be described as how a "company's core values. During the interviews it was discovered that although senior management supported the idea for a CSR due to the company commitment to corporate responsibility that was in line with its' values and mission there is not a clear understanding of what it entails. 7). Out of the Lawrence factory one supervisor summed it up with "This is an exceptional company. and fell short of giving guidance to managers . vision and governance structures support or prevent the company from understanding and managing corporate citizenship as an integrated part of business strategy" (Veleva. For over 30 years the company was dedicated to not only its employees but also its communities in which it was located. A research team conducted a 29 surveys from internal and external stakeholders in Lawrence. mission.

products and services or market strategy. However. It was also uncovered with the help of interviewing executives that the company lacked in leadership in development and implementation of a CSR strategy. This area proved to be the strongest in providing leadership for . New Balance. While other competitors aimed on going "green" New Balance took a different approach and started to use recycled material. while maximizing positive outcomes. The company also lacked in its performance of researching new materials that could be used ultimately preventing them from being a leader in the industry. An example would be revolutionizing an existing product or service to become more eco-friendly along with the delivery of marketing. The second element. Externally. the research team revealed that there was a complete lack of understanding on how this coincides to CSR along with the benefits of doing so. Another challenge New Balance seemed to struggle with was its' overall communication. The company lacks in encouraging its associates with recognition of the great things they were accomplishing. The CSR assessment uncovered that New Balance lacked in setting clear goals and responsibilities that were aligned with core business strategy. the environment and society.New Balance & Community Social Responsibility 5 and assisting in identifying opportunities and risks. The third element. Through this they can innovate their products to help create new environmentally friendly gear. stakeholders wanted to see more disclosures of factories and financials. operations. now a truly global business has a great opportunity to bring social an environmental responsibility through its products. analyzes society's needs with solutions that with create a return on profit for the organization. looks at the responsible business practices and engaging them to minimalizing negative outcomes on employees.

Employees believed that the New Balance brand did not get enough recognition. pg. buy in. Waste reduction is also another strong area of the company. Another obstacle the operations faced was the space between CSR management in the domestically and overseas suppliers. New Balance didn't have the same leverage as it did with footwear with its' suppliers. 13). New Balance community involvement strategy did not coincide with the business strategy ultimately lacking overseas. the support strategy was not clearly focused. Although footwear was seeing large improvements and strides in operations the apparel and promotional items proved to have the most impactful risk. All through the company's history it prided itself in its' involvement within its communities.New Balance & Community Social Responsibility 6 the entire industry and integrating the use of a CSR. Employees were very active in volunteering and empowered them to give back to its communities. and communication. A seperate CSR department or team needs to be created . Of all the opportunities or weaknesses that New Balance faces the two things that really stick out the most from preventing a CSR sound corporation is its' overall lack of understanding. In spite of the high community involvement. They replaced much of the lighting and even switched to "green" cleaning products. community support takes corporate social responsibility to a new level from just creating new jobs and paying taxes to utilizing the company's assets to support social well-being. Operations clearly demonstrated clear business values in reducing cost while increasing productivity in terms of impacting the bottom line. which in turn created 96 percent job satisfaction amongst its employees (Veleva. nor did it involve issues that related worldwide. leadership. Lastly.

motives. New Balance posses many key ingredients to become successful in the long run with the assistance of a well thought out and implemented CSR. and impact. . commitment.New Balance & Community Social Responsibility 7 within the company that consists of not only executives in different departments but also even it's factory workers. Implementing a CSR program an important aspect that New Balance needs to implement because businesses are based on trust and integrity. This will assist New Balance in its overall communication and create a more clear understand of what a CSR truly involves. The company can uses various means of internal and external communication such as bulletins and even online media. The content of its CSR messages needs to clarify the companys' activities by accentuating its' involvement. Establishing and maintaining trust with customers and communities is not a simple task in which can be depleted quickly. The main reason for this is to give each person a sense of pride along with bringing new perspectives from various departments.

Wikipedia. ( Veleva. from www. Retrieved July 7.harvard. from https://cb.acrwebsite.d. New Balance: Developing and Integrated CSR Strategy.New Balance & Community Social Responsibility 8 References Korschun. Wikipedia. Using Corporate Social Responsibility to Strengthen Employee and Customer Relationships. Using Corporate Social Responsibility to Strengthen Employee and Customer Relationships. the free encyclopedia. (n.pdf New Balance . 2013. D. V. Retrieved July 2013. the free encyclopedia.). New Balance: Developing and Integrated CSR Strategy. from http://en.wikipedia. 2013.d.hbsp.). (n.d. Retrieved July 7.).edu/cbmp/content/19905934 .