Tutor Notes

Case: Corporate social responsibility at Parker Chemicals and Waste

Management Ltd

This case can be used to introduce the main general management and HR issues that surround
the issue of corporate social responsibility. It is based in an industry in which CSR is of particular
relevance, but could be applied to many (or even all) other companies, no matter what their
activities.

Keywords: Corporate social responsibility (CSR); Recruitment and Retention;

Sources of staff; Community relations; Managing in an extreme
industry/environment; Pay and Reward levels

CIPD Qualifications: Leading, Managing and Developing People

Ethics and professionalism in people management and
development; moral and practical issues in relation to the
management of people

Further reading: Adams, J., Hamill, S. and Carruthers, P. (1990) Changing Corporate
Values, New York, Warner

Griseri, P. (2000) Managing Values, Basingstoke, Palgrave

Macmillan

Sternberg, E. (1996) Just Business, New York, Warner

Wilkinson, R. (1992) Unequal Societies, London, HarperCollins

Debrief
In general, this case (and others like it) can be used to introduce the main general managerial
issues that surround the area of corporate social responsibility (CSR) as well as the specific HR
commitments. In reality, neither can take place in isolation from the other. The nature of work,
community relations and the attitude that the company takes to its environment all impact on the
ways in which HR accepts and in turn discharges its specific responsibilities. This case has been
produced in relation to an extreme, contentious and controversial industry in order to bring these
points out – but in truth they apply in some shape or form to all companies and organisations in all
sectors and locations.

There are specific questions of absolute standards of safety and security of products and services,
of access, egress, supply, manufacture, process and distribution, which ought to be the concern of
all organisations. As well as being truly ‘corporate social responsibilities’, the attitudes adopted and
exhibited to each reinforces (both positively and negatively) wider general issues and perceptions
of whether or not:

Parker is a ‘good’ or a ‘bad’ company

Parker is a ‘good’ or a ‘bad’ employer
the company provides ‘good’ or ‘bad’ products and services
it is going to be in existence for a long time
 It is going to continue to enjoy the backing of the stock market and other
stakeholders.

Whatever the industry or commercial sector, it is easy to lose wider reputation through insufficient
attention to each of these areas of responsibility. By way of illustration, the loss of reputation – and
profitability – of Marks & Spencer from 1998 onwards can be ascribed in great part to the negatives
of each of the above points:

It shifted from being regarded as a ‘good’ company to a ‘bad’ one as the result of its very high-
handed treatment of its Scottish garment suppliers when they were given 24 hours’ notice of
cancellation of contracts.
It shifted from being regarded as a ‘good’ employer to a ‘bad’ or (at least) an ordinary one when
it reduced its volume and coverage of the staff induction programme, range of staff benefits,
and management training scheme.
Its products came to be regarded as ‘bad’ by the core market of middle-aged people when it
became known or was perceived to be trying to capture a part of the youth market, rather than
continuing to concentrate on the core customers.
There were many questions at the time as to whether or not the company would survive at all –
and in particular, Philip Green made two formal bids to buy the company,
The media started to run adverse stories and negative coverage of the company and its
activities, and there were additional issues surrounding the poor management of its French and
US interests which only added fuel to the perception that this was a company in decline.

It has taken nearly ten years to turn this belief and perception around, and the process is still not
complete by any means. Part of the problem, at least, was the belief and perception that the
company no longer accepted or discharged its responsibilities as it always had done in the past.

So the problems and issues surrounding CSR exist everywhere. The priorities are to ensure that
the following are addressed in all cases:

The standards set for all staff reflect those expected by external stakeholders and the wider
community.
The standards required in identifying, accepting and discharging responsibilities are an
absolute commitment.
Specific issues concerning standards of behaviour, attitudes and performance are seen as
integral to the acceptance and discharge of responsibilities.
Specific issues concerning safety and security are absolute also.

The need is to ensure, therefore, that everything that is being done to the stated and implied high
standards continues to be so, and that this is and remains a corporate and strategic priority and
commitment.

Suggested response:

1 Outline the full range of responsibilities that companies such as Parker – working in
extreme and often controversial industrial and commercial sectors – ought to accept
and discharge.

The full range of responsibilities is as follows. As stated above, many of these apply to all
organisations in all sectors and locations:
 to continue to deliver the same levels of commitment to staff, in relation to levels
of pay and reward, security of tenure, and company facilities, as to maintain the
high levels of loyalty and commitment, as well as high levels of profitability
to ensure that staff job training remains of the highest and most complete order, so as to
ensure in turn that there are no further accidents of the sort that happened ten years ago
to address the issues surrounding the leukaemia clusters openly and completely so as to be
able to ensure either that these are nothing to do with the work of the company, or if they are to
do with the work of the company, to take swift expert advice and institute remedial action and
comprehensive health care
to continue to serve the local community as a key to ensuring continuous and enduring
capability to attract, recruit and retain staff
to ensure that all wider social issues continue to be accepted, tackled and addressed, both
whenever concerns are raised, and also proactively to ensure that those concerns remain as
few as possible.

The company clearly has additional corporate responsibilities to staff and the community, to remain
profitable, viable and in business, so as to be able to continue to provide work and serve the
community. Shareholders are entitled to returns on their investment; and the American parent
company is entitled to conduct what is a legitimate line of business (however dangerous, extreme
or controversial).

There is an additional general point over the pay and reward levels illustrated. Wilkinson (1992)
states that the greater the divide between top and bottom levels of income and prosperity, the
greater the instability of the organisation. The divide here, with the very high basic wage, and the
adequate but not exorbitant top salary, ought to serve as a general illustration of the relationship
between pay and organisational stability. To reinforce this point, in April 2006 a directive was
issued by the HR director at BA, that the top salaries of the company should be no more than 35
times the value of the lowest.

2 From the point of view of what is stated here, how seriously does Parker appear to
identify, accept and discharge its full range of responsibilities to staff and to the wider
community?

Parker’s attitudes to its responsibilities, on the basis of what is stated in the case, appears to be
generally positive. There are one or two caveats, however:

The company has made no stated long-term commitment to existence (although this is clearly
implied in the information about all equipment being state-of-the-art).
That there have been no accidents for the past ten years can lead to complacency if not
guarded against and if standards of staff training and development, and organisational
progress, are allowed to slip.
The company has made no specific commitments in respect of the increased concerns about
terrorism and security, and although this may not in fact be an issue, the public and staff would
want reassurances in each of these areas

3 Identify the issues that Hilary Machin ought to tackle now, and suggest ways in which
these issues might be tackled effectively in the light of the criticisms and operational
issues that the company is presently facing.

Hilary’s priorities should be:

 to make sure that the perception and belief in the community that Parker is a
good employer – particularly in paying and rewarding its staff – is not lost. The company has
many advantages going for it, as stated in the case. It has high standards of safety and
security: any organisation that has had no industrial or occupational accident for ten years
ought to be commended, whether in an extreme and dangerous industry or not
to ensure that she nurtures relationships within the community as part of maintaining the
overall positive relationship that the company has enjoyed over the years. This is certain to
include going into schools and colleges, community associations and other bodies both to
preserve and enhance the reputation, and also to ensure that the community at large continue
to think of Parker as an employer of choice
to ensure that the perception of ‘all illnesses and injuries are now the responsibility of the
company’ as outlined in the case, is fully investigated. There must then be a full briefing as to
the real extent and prevalence of this, reinforced as necessary by a re-statement of standards,
medical treatments, and rehabilitation programmes
to ensure that the standards of training and development, and pay and reward are maintained.

Hilary is also certain to have lesser priorities in contributing at an executive level to the overall
preservation of the company’s general standing and reputation, keeping up the expertise of the
press and PR office, and identifying and addressing the concerns that are beginning to arise in
terms of the newly-developed village and community.

4 What else ought the company to commit itself to, and under what circumstances, to
ensure its continuing operational viability, security and profitability?

Parker’s other commitments are overwhelmingly at corporate and strategic levels. The present
standards require continuous investment – and this is to continue to ensure product and activity
security, staff commitment and community reassurance. On the basis of the case above, the
company has set itself very high standards (notwithstanding the caveats in Question 2 above), and
the worst thing it could do would be to allow these to slip.

There is an additional general point here: that standards fall either when they are no longer
valued or else when the basis and reasons for which they were established in the first place
are lost or forgotten. On the basis of this case, standards were established at least in part to
ensure that people from an isolated and dispersed rural and coastal community would look
upon the company as an employer of choice. If the standards were allowed to fall, this would
eventually cease to be the case. And if this were to happen – as with the Marks & Spencer
example above – it might take many years to repair the damage.