Societies, governments and corporate leadership are tasked with holding the corporation responsible for any actions that may affect community, environment and people in a negative way (Lawrence and Weber, 2011 Home Improvement X is a home improvement chain that provides home improvement product in the United States, and in select global locations. When it comes to social responsibility, Home Improvement X believes that their company is built on creating stockholder value, while balancing profitability, social responsibility, and community needs.
The following is proposed strategy on how Home Improvement X can fulfill its commitment to both its stakeholders and the communities in which the company conducts business. A. Environmental Considerations and Recommendations Home Improvement X realizes the importance of conserving the environment ND the negative effect their business can have on the environment without an environmental responsibility strategy in place.
Currently, the company has some basic environmental goals in place, but we are looking to expand on those goals. There is not current timeline for these goals to be implemented and these goals seem to be a low priority for the company. It is recommended that for the company to fulfill their commitment to environmental conservation they implement the following environmental goals (The Home Depot, 2014).
The first goal recommended for the company s to commit to sell products that are manufactured, packaged and labeled in an environmentally friendly way that eliminates waste and preserves raw resources. To accomplish this, the company should focus on main areas of sustainability, including energy and water use, carbon emissions, and raw resource purchasing, especially wood purchasing. The company needs to set specific goals with timeliness to accomplish a more environmentally friendly business model in order to meet its goal of CARS.
Suggestion of possible goals for Home Improvement X are discussed below: A 20% reduction in store energy usage within five years upgrade energy management systems, including high efficiency HAVE systems and lighting controls Upgrade irrigation systems that reduce water usage by up to 40% Installation of low flow toilets and faucets to reduce water usage by 50% Replacement of traditional fluorescent lighting with high efficiency TO fluorescent bulbs A reduction in carbon emissions within 5 years using the GOGH Protocol’s Corporate Accounting and Reporting Standard (2004) 20% reduction in skew used in stores by the use of natural lighting and updated lighting control and HAVE systems reduction in domestic supply Hahn emissions by the use of blissful and fuel efficient transportation options Using and selling only sustainable harvested wood products within 5 years Know where wood purchased is sourced from and eliminate purchasing from “endangered regions” such as the Amazon Rain Forest Give preferential treatment to suppliers who have their wood certified by Forest Stewardship Council (FCC), an independent group that certifies wood is obtained from sustainable sources, often following timber from stump to final product. These suggested goals are just a small sampling of what the company can kook at in a broader discussion on environment responsibility. It is recommended that a committee be organized to research and make recommendations for all areas where the Company may impact the environment. B. Ethical Leadership Considerations and Recommendations According to Lawrence and Weber (2011 business ethics is applying general ethical ideas and models to business behavior. Leadership in business must decide what ethical ideas and models apply to their business based on the societies in which they conduct business.
There are five reasons that business should be ethical in their business practices. These include meeting emends of stakeholders, enhancement of business performance, compliance with laws in locations where business is conducted, prevention and minimization of harm, and the promotion of personal morality of employees (Lawrence and Weber, 201 1). Leadership at Home Improvement X should evaluate the business practices Of the company based on the ethical model the company chooses to employ. One ethical issue that Home Improvement X encounters regularly is the possible purchase of “conflict minerals” that may be used in the production of products. Conflict minerals” are minerals that contribute to violence and human rights violations that are indeed and sold in areas of Africa (The Home Depot, 2014). Company leadership has used ethical decision making to create a policy that states the company will not purchase any of these “conflict minerals” directly or indirectly through vendors. Not only does this policy protect the company from breaking a law, it also creates trust with the consumer and value for the stakeholders. Creating and maintaining an ethical workplace environment should be a top priority for Home Improvement X. Having a strong ethical working environment will add value to stakeholder, customers and employees.
The following actions are recommended to create such an environment within Home Improvement X: Create a Culture of Compliance One of the most important ethical decisions that leadership makes is to make sure that company policies comply with laws, statutes, regulations and directives in communities where business is conducted by the company. Failure to comply by employees and leadership can result in damage to the company in many ways. The employees or the company may face legal action such as criminal prosecution with the possibility of fines or imprisonment. In addition, shareholders lose value as the communities in which business takes place loses respect for the company, resulting in a loss of sales and profit.
Finally, failure to comply may result in the company unknowing supporting terrorists or the torture and deaths of people around the globe (as in the case of “conflict minerals”), which again results in a loss of respect and faith in the company by the consumers who purchase from the company. Currently, the company does not have a policy in place that would allow an independent investigation into its legal and regulatory compliance. It is suggested that the company hire a third party to perform an ethics audit. This will allow the company to see where they are lacking in ethical behavior or decision-making. It will also let the company verify that they comply with the laws and regulations for the communities in which they conduct business. An ethics audit will also pinpoint areas where additional training for employees needs to be developed and implemented.
Create a Culture of Accountability As part of ethical leadership, Home Improvement X must hold employees and company leadership accountable for their business actions and decisions. If employees and leadership are not held accountable for making ethical sections and following regulations, the company will acquire a poor reputation within the communities in which business is conducted. In addition, not holding employees and leadership accountable fosters an atmosphere where people do not believe their actions will result in any personal repercussions. Holding employees and leadership accountable allows Home Improvement X attract and retain specialized talent who believe in the importance of ethics in business.
Currently the company has few policies and procedures in place regarding ethical behavior in the workplace. The company relies on the integrity of their employees and does not monitor employees’ behavior or provide training on what types of employee behavior is acceptable (The Home Depot, 2014). It is recommended that top leadership make a commitment to making ethical decisions and promoting ethical actions. The example of ethical decisions and actions by top leadership will encourage other employees to consider ethics in their decisions and actions. The company should also develop a training program on ethical decision- making and actions for all employees to develop the skills needed for making the ethical decisions in difficult situations.
This training should also coincide tit the development of an ethics code of conduct that all employees would be held accountable for following. It is also recommended that a process of reporting ethics violations be developed and implemented. This should include a no retaliation clause so that employees who report non-ethical behavior or decisions are not afraid that they will lose their job or be punished for reporting the incidents. Create a Culture of Affordability Ethical leadership creates a benefit for company and product value. Ethical decision-making allows the company to develop products in a cost effective manner that is passed on to the consumer.
For example, if the company chooses to use a vendor who uses less energy to produce a product based on environmental concerns, the company passes those savings onto the consumer. This type of cost reduction for ethical reasons results in greater value for both the consumer and the stakeholders. C. Organizational Viability Considerations and Recommendations Business viability is measured in a business’s likeliness of long-term survival and maintain sustainable profit. A socially responsible business needs to consider future profitability while also consider the business’s effects on human and environmental factors. There are many ways the company can be socially responsible and still maintain its viability in the marketplace and hold value for shareholders.
The following are recommendations for cost savings and community good will through acts of social responsibility. Home Improvement X currently uses large amounts of water from local water sources to maintain the plants in their garden centers during the summer. The use of water from the current source is adding to the depletion of water resources for communities. It is recommended that Home Improvement X install rain tanks in all its garden centers. The tanks would catch and store he rainwater, which could be used to water the plants in the garden centers. Research shows that using rainwater to water the plants in the garden center could save over 500,000 gallons of water per store per year.
This recommendation also saves the company money due to a much lower water bill. This recommendation is also good for the communities since it lessens the depletion of water resources by Home Improvement X. Home Improvement X currently uses a paper system to track and inventory tool rentals. Each customer must sign a paper contract that outlines the details of the tool rental agreement. With current technologies, using a paper contract and paper to record data is outdated, costs the company unnecessary money, and uses paper when paper is not needed. It is recommended that Home Improvement X change their tool rental procedures to be electronic based.
A computer program can be used to track and record inventory. The company could develop and paperless contract that can be signed and stored electronically on a computer or in a database. The contract could even be emailed to the customer so that they have a copy for their personal records. Research shows that changing to an electronic tool rental contract could save ever 1 2,000,000 pieces of paper a year. Although there may be some upfront costs to implement the electronic contracts, the cost savings in paper over the years would be a huge benefit to the company along profitability lines. In addition, saving paper reduces the amount of trees cut down to produce the paper and helps the environment.
Home Improvement X currently uses toilets and faucets that use more water than is necessary with new technology. The use of the outdated toilets and faucets causes a large, unnecessary water bill for the company and removes vital water from communities. It is recommended that these outdated toilets and faucets be replaced with low flow toilets and faucets. Research shows that changing to low flow toilets and faucets would create a 40%+ reduction in water usage and waste. The reduction in water use would save the company money in terms of the water bill. The reduction of water use would also leave more water for the communities in which the company does business, helping reduce the use of a finite resource that is necessary for all life. D.
Legal and Regulatory Considerations and Recommendations It is an important part of an ethical company that it follow all laws and isolations in regards to the business it practices. Home Improvement X must consider how such laws and regulations impact business and how the business complies with these laws and regulations. Below are three laws that Home Improvement X with which the business is required to comply, as well as recommendations on how to best make sure compliance is met. Section 1 502 of the Dodd-Frank Wall Street Reform and Consumer Protection Act relating to trade in conflict minerals. This law was enacted to address the exploitation and trade of minerals that contribute to violence and human rights violations in parts of east Africa.
The law requires public companies to the US Securities and Exchange Commission annually on whether conflict minerals (gold, columbine-tentative (tantalum), catteries (tin), and wolfram (tungsten)) are necessary for production of product or functionality of the business. It also must be reported if any of the conflict minerals were obtained from conflict mines in covered countries (US Securities and Exchange Commission, 2014). Currently, Home Improvement X expects all suppliers to provide information on sourcing of any conflict minerals. Home Improvement X currently has supplier alert line that can be called to report NY violations of company policy in regards to conflict minerals. It is recommended that Home Improvement X improve its compliance by implementing third party ethics audits on all suppliers and vendors.
This would allow an unbiased source to verify that the suppliers and vendors are indeed in compliance with company policy and with the law. Such an audit would protect Home Improvement X from unknowingly sourcing conflict minerals from conflict mines in covered countries. Age Discrimination in Employment Act of 1967 This law was enacted to eliminate employment discrimination based on age. The law requires that companies not make a hiring, promotional or firing decisions based on the age of the employee. The company also cannot reduce the pay of the employee to remain in compliance with this law. This law protects people who are 40 and over (US Equal Employment Opportunity Commission,2014).
Home Improvement X currently encourages people of all ages to apply for positions within the company. The company also provides special accommodations if needed for older workers. It is recommended that Home Improvement X actively recruit older employees. This can be a infinite for the company, since the company can take advantage of the years of experience of older workers. It is also recommended that when the company performs the previously recommended ethics audit, that age statistics be looked at. It is important to make sure that there is a strong representation of older workers within the company. If there is not, the company may be unintentionally discriminating against older workers.
A final recommendation is that an ethics officer be hired to review hiring, promotions, and firings to verify compliance with the Age Discrimination of Employment Act. The Family and Medical Leave Act Of 1993 (FEM.) This law allows employees of covered employers to take up to 12 weeks of unpaid leave in a 12-month period and have their job protected. This leave applies to an employee who is ill and unable to perform their job function, they have a sick family member, or they have given birth or adopted a child (US Dept. Of Labor,2014). Home Improvement X currently has no corporate system in place to determine whether they comply with FEM.. It is up to the manager or supervisor to determine whether the leave falls under FEM. guidelines and the employee’s job and position are protected.