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Corporate Social Responsibility (CSR) has become a strong concern and there need to be guidelines for companies, particularly large international companies, many of which are considering CSR initiatives.
This paper examines three CSR dimensions (social, ethical and environmental) and business sustainability through the concept of the triple bottom line: people-planet-profit concepts. It proposes a conceptual framework to classify various factors along the triple bottom line pillars of sustainability in the context of supply chains. The purpose is to find useful CSR activities for developing and implementing sustainable business strategy and policy decisions that affect logistics development in port-related industries
Keywords: Corporate social responsibility, CSR, Supply chain and logistics, Management, Sustainability, CSR, Strategies.
More and more companies have recognised the need for moral and green responsibilities, and focused on the business side of CSR, which can also bring commercial and reputation benefits. This is especially true for companies that have an impact on the environment, e.g. supply chain and logistics. It is expected that CSR creates trust and improve public perception of the firm (Muñoz, 2015). CSR principles need to be embedded in the organisation and become part of its growth pattern.
Many firms have started to practising Green Supply Chain Management (GSCM), which covers logistics, purchasing, design, and production, all parts of the supply chain, as well as warehousing, distribution and transport. It is important for all stakeholders to be mindful of CSR and work together to achieve green and socially responsible objectives. Green innovations in logistics services can help improve efficiency and effectiveness across any sectors of the economy (Zailani et al, 2011). An example of this is the port industry, where improvements in logistics performance are needed to foster the development of the maritime transport supply chain (Myo, 2013). Port-related logistics is one of the core factors to be improved to attain the country economy.
Myanmar was chosen for this study as, after the reform of the political system and the newly elected government took power in 2011, much progress can be seen such as improved international relationships and the banking and financial system has been reformed. Moreover, there have been local and international workshops and seminars about reform and development of various sectors of the economy, especially in the Yangon region.
Myanmar's geographically strategic position between India, China, and Thailand provides it with the opportunity to become a new manufacturing base and logistics hub in Southeast Asia. The former capital of Yangon is the country's commercial centre and is the largest city in Myanmar, with a population of more than five million (Directorate of Investment and Company Administration, DICA).
This paper will attempt to consider the State of CSR activities in Myanmar, particularly in the country’s Supply Chain and Logistics Industry, using a case study of the Yangon Port that is located in the Thilawa region of the country.
The concept of CSR is relatively new in Thilawa Port and its society. Most stakeholders, including government and non-government organisations have low levels of awareness of CSR as an integrated strategy for the business. Challenges include lack of knowledge of the relationship between sustainability and business, and the positive impact on the environment and the lives of individuals. Initial attempts to implement CSR are usually restricted to philanthropy (Welford & Zieger, 2013). Knowledge is also low concerning how sustainable policies positively impact the environment and human lives.
As Thilawa Port is major economic, industrial and logistics centre, it needs to go beyond charitable donations and show more responsibility for the social, economic and environmental matters and sustainability, as part of the business strategy.
The purpose of this study is to explore how CSR initiatives can contribute to business sustainability and responsible business practices for the supply chain and logistics industry, a multi-purpose service industry with an important role in facilitating international trade. It uses a case study of Thilawa Port, which is facing major environmental and social challenges.
To achieve the above general objectives, the specific objectives below were set:
(a) To examine the relationship between CSR initiatives and business sustainability in supply chain and logistics industry in Yangon, Myanmar
(b) To examine the current CSR challenges in port-related logistics industries in Thilawa Port (Yangon), Myanmar
(c) To determine whether CSR will support sustainable business and enhance the operations of Thilawa Port (Yangon), Myanmar.
(a) Do companies in the Thilawa Port area have to consider the implementation of CSR activities as a sustainable business strategy?
(b) What challenges are facing port-related logistics industries in Myanmar, Thilawa Port (Yangon) when initiating CSR activities?
(c) How can CSR activities enhance business performance in Thilawa Port (Yangon)?
This research will focus on the requirement of CSR initiatives in Yangon Port (Thilawa) for business sustainability from 2008 to 2018. Interviews will be conducted with the Myanmar Port Authority (MPA) as MPA is responsible for port administration. The senior management of MPA is willing to share information and use the results of the CSR activates for future decisions. This study will cover only the port logistics-related parts of the CSR process and practices.
The other interviewees are senior management from Myanmar International Freight Forwarders' Association (MIFFA), Union of Myanmar, and Federation of Chamber of Commerce and Industry (UMFCCI). MIFFA is the only organisation with responsibility for the logistics and freight forwarding industry in Myanmar. They have vast experience in both local and regional logistics-related management and operations. UMFCCI is organised with managing directors and chief executive officers and thus have a wide knowledge and skills relating to CSR and business sustainability.
Secondary data will come from Thilawa development reports from the management committee of Myanmar Port Authority, CSR activities news from media, supply chain and logistics networks, and previous literature.
Last but not the least, this study will identify how CSR initiatives can contribute to the organisation sustainability that will meet the expectations of foreign investors.
CSR is part of the business environment and businesses need to acknowledge the pressure exerted by stakeholders to integrate these aspects. If CSR and environmental management standards can be demonstrated as a tool for positively influencing a company’s image and economic profitability in the supply chain and logistics industry, the results of this case could be used as a source of incentive for other logistics industries to implement CSR practices in their area. This could help in attaining sustainable supply chains and logistics activities in economic, social and environmental challenges, not only in Myanmar but also in others developing countries as well.
This research focuses on CSR activities that contribute to optimisation of logistics development of port-related sectors in at Yangon Port. In reality, there is a broad view on logistics development of port-related sectors in general. The literature and data are quite limited for CSR in ASEAN, Myanmar, for port sustainability and for CSR progress among ASEAN countries.
Interviews will be conducted with the senior authorities from MPA, senior management from UMFCCI and other heads of government and non-government logistics associations. The data was collected in 2018 and updates are not included. Since interviewees may have different understandings of CSR, so the primary data could be disputed. Nevertheless, applicability towards other researches could be deliberated.
The external stakeholders’ interests were gathered by interviewing internal stakeholders. This brings a risk of subjectivity. Most of the interviews will be conducted in Myanmar’s official language (Burmese), and quotes may as such be directly translated from Burmese to English.
Senior management prefers to refer their report, research, documents, presentations rather than answering interview questions. Moreover, the investors in Myanmar, especially in the logistics and transport industry requested company privacy. That meant that there were no individual interviews with their staff or suppliers, and neither interviewees or the company were named. Future studies could deal directly with investors after successfully setting up in Thilawa Port and SEZ.
CSR is one of widely talked about in the media as well as corporate and academic circles, yet the definition is not agreed. Some prefer to use the term ‘social responsibility’, omitting ‘corporate’ to clarify that related issues are not restricted to profit-making organisations.
The International Organisation for Standardisation ISO 26000 standards (ISO 26000, gives the definition:
“The responsibility of an organisation for the impacts of its decisions and activities on society and the environment (Qureshi,2017), resulting in ethical behaviour and transparency which contributes to sustainable development, including the health and well-being of society, takes into account the expectations of stakeholders, complies with current laws and is consistent with international standards of behaviour, and is integrated throughout the organisation and implemented in its relations.
ISO 26000 is defined as the international standard developed to help organisations effectively assess and address social responsibilities that are relevant and significant to their mission and vision; operations and processes; customers, employees, communities, and other stakeholders; and environmental impact.) CSR is a company’s responsibility not only for the economic consequences of their activities but also for social and environmental implications.
Generally, CSR is defined as having two main characteristics:
Organisations that aim for an environmentally associated competitive advantage seek to develop their employees to have a unique set of (green) technical, and management skills and abilities that are hard for competitors to replicate. Turker (2008) conducted a study on CSR and organisational commitment and identified that employees prefer to work for socially responsible organisations. CSR has been identified was identified as a factor that shapes a company’s public image.
The level of an employee’s commitment to an organisation was found to be dependent upon the perception and strength of the firm’s CSR policies (Shen & Deng, 2019) that are aimed at supporting society, the environment and employees). (Ellis, 2008) attempted to establish a link between the employees’ social behaviour and how they identify with their organisation. It was suggested that employee values, social bonds and exchanges in the workplace and individual attitudes toward CSR are key predictors of socially related behaviours. Ellis concluded that management should encourage employees to actively participate and contribute to policy development and the execution of green programmes.
Companies are pressured by both external and internal stakeholders to follow CSR requirements. There is the further pressure of scarcity of resources, natural, environmental and human, forces companies to consider CSR in their processes. CSR serves as a competitive strategy as a response to image-based competition and the stakeholders' increasing social and environmental concerns on an international level.
A company’s operations are greatly influenced by CSR. Consumers want to buy products and services from firms they trust; suppliers want to collaborate with reliable partners; employees want to work for companies they admire; investors like to support socially and environmentally responsible companies; non-government organisations want to work in partnership with firms looking for solutions.
Codes of conduct are possibly the most often used way to manage CSR and Ciliberti et al (2009) call it a “tool to manage suppliers”, examples being ISO 9001 and ISO 260006. CSR will probably increase in importance within SMEs, since ethical codes are more often integrated and especially larger customers put pressure on them.
The size of a company plays an important role in terms of setting CSR requirements on suppliers (Schreck & Heimeri, 2015). Schreck & Heimerl, (2015) also mentioned that CSR is recognised as a vital conduit between corporate strategy and social responsibility. It demonstrates to employees, governments, stakeholders, and communities, what are the firm's values and policies and therefore the organisation's strategic agenda).
Scarce resources and strong competition do not facilitate spending money on responsible and sustainable strategies. In family organisations, most social engagement is conducted intuitively and depends on the economic situation.
As sustainability is a critical factor for the success of supply chain management, companies need to implement CSR requirements along their whole supply chain to ensure its competitiveness. Since the majority of suppliers are SMEs, making a supply chain truly sustainable depends on the SMEs' ability to impose CSR practices on their suppliers (Ayuso et al, 2013).
A clear evolution has been made in the adoption of CSR within business practices. Recently, CSR became recognised as a formalised field adopting international standards. The newly developed ISO 26000 provides official, international standards and guidelines. This shows the wide adoption of CSR as a best practice in business nowadays, and the associated standardisation tools (Soares, 2016).
CSR can play a fundamental role in achieving worldwide objectives of competitiveness, growth, better governance, and overall sustainable development, and companies no longer can base their commercial strategies on the traditional “Four Ps” (Price, Product, Promotion, Place). Instead, León & Juan (2014) propose “Four Rs” (Reliability, Responsiveness, Resilience, Relationships) to provide real added value. Logistics play a key role in all of these. As the logistics and transportation sector is global in nature, and it has a great variety of impacts that can affect the economic, environmental, and social dimensions of society both in positive and negative ways (León & Juan, 2014).
3.0 Knowledge Gaps
In ASEAN countries, CSR is often perceived as a western concept (Waagstein, 2011), related to voluntary contributions, cause-related marketing’ and public relations. It is still very limited in Myanmar, and is considered a cost rather than an investment. It focuses on charity because the majority of citizens are Buddhists. There is low awareness of strategic CSR, high expectations of investment, and negative perceptions of CSR. The most vocal force in today’s logistics society which is responsible for “greening” the environment is the port-related logistics sector (Konlaan & Hanson, 2018).
Results from previous studies show that CSR in service industries such as banking can indirectly increase their financial performance and attract customers. Plenty has been written on the topic, but CSR initiatives are limited. This leads to the second research gap. There still exists a challenge due to much of the relevant literature being published in journals not dedicated to port-related logistic business for developing countries like Myanmar. There is also a gap between what is carried out in practice and what is reported. This partly stems from the ambiguity of the sustainability concept (Okland, 2015).
There is a general consensus regarding the three basic dimensions of sustainability:
Economic Social and Environmental.
Economic – sustainability of the economic growth and profitability
Social – socially equitable development
Environmental – issues of natural resource use and preservation, in a way that will not impede those yet to com.
These three dimensions of the concept were dubbed the “Triple P’s” for Profit, People and Planet (Okland, 2015). This is a wide-ranging concept which requires thought throughout value chains. To create shared value through sustainable business practice it is necessary to identify key stakeholders in a triple bottom line. This division is a bit blurred as a large number of stakeholders interests are taken into account (Larsson et al. 2012).The Triple Bottom Line framework can be used to measure business performance and success of the organisation (Alhaddi, 2015). Rogers & Hudson, (2011) mentioned that the term has also been called the practical framework of sustainability.
Sstainable Supply Chain Management was proposed by Linton et al. (2007) followed by many more scholars. Liu et al, (2017) looked at the sustainable supply chain from the viewpoint of management and economic profit. Supply chain management is distinct from sustainable supply chain management which is an integration concept of the economic, social and environmental bottom line (Alhaddi, 2015).
Economic responsibility is considered as the basic level of business. Just as the footings of a building must be strong enough to support the entire structure, so, sustained profitability must be strong to support the society’s other expectations of enterprises.
The economic line ties the growth of the organisation to the growth of the economy and how well it contributes to support it (Carroll , 2016). The focus is on economic value provided by the organisation to the surrounding system, in a way that it prospers and promotes for its capability to support future generations.
The literature on the economic dimension of the TBL was divided into two streams, namely defining economic sustainability and advancing methods to measure the concept. Economic sustainability was considered to account for a wider group of stakeholders than the traditional financial reporting and included customers, suppliers, employees, providers of capital and the public sector, León & Juan (2014).
The social responsibility of TBL refers to conducting beneficial and fair business practices to human capital, and the community of the business environment. The idea is that these practices provide value to society and give back to the community. Alhaddi (2015) states that disregarding social responsibility can affect the performance, sustainability and profitability of the business. Examples of these responsibilities include fair wages and healthcare coverage. Meanwhile, society is reinforcing the message that companies are expected to comply. Meanwhile, society is conveying the message to business that it is expected to obey the law and comply with regulations. Law and regulations are society’s codification of the groundrules for business to operate in civil society (Carroll, 2016), The legal and regulatory framework of a country may affect the decisions of multinationals as to whether to invest there or not.
The environmental responsibility of TBL refers to practices that do not compromise environmental resources for future generations, and includes appropriate and efficient use of energy recourses, reducing greenhouse gas emissions, and minimising the ecological footprint, etc. (Alhaddi, 2015). This research methodology aimed to determine whether organisations with sustainable practices are more likely to withstand economic downturn.
Today, sustainable development is a major discussion point for governmental, private, and public and governmental sectors. Addressing the mounting concerns requires a change in the way we view ourselves and our actions. Sustainable thinking must be applied to all areas in every day the business operations make about the environment. This should become so embedded that we do it automatically without having to be made aware.
Business organisations and stakeholders need to recognise understand the need for CSR, in addition to economic gain, and should consider their actions and be accountable, not just for economic gain, in order to run a sustainable port.
Survival in today’s market may mean sacrificing short-term profits for future gains that satisfy owners and managers (González-Rodríguez et al, 2015). Arsic et al, (2017) say the impact on finances comes from the economic dimension of CSR, and companies should be motivated by profit and put the company's business in the hands of consumers, investors and other stakeholders. The business world and the community can work together for the benefit of society and the environment from altruistic motives. Business has a direct and indirect impact on communities through payment to employees, spending power, and other business processes.
According to Asric et al. (2017) the social dimension is the key factor in relationships between business and society. Corporations should integrate social concerns in their operations and consider the full scope of their impacts on communities.
Implementation of the environmental CSR depends on various formal, legal and administrative conditions set by governments (Arsic et al, 2017). The interests of different groups regarding environmental CSR show a significant level of variation. Individual companies have their own concerns in the implementation of environmental protection activities. They are trying to gain positive public opinion and support, and to do this they need to fulfil legal requirements and avoid incidents. Their business strategies need consider environmental protection and investment in CSR is a mandatory requirement.
Sustainable development creates opportunities for enriched quality(Stojanovic, 2016):
However, this causes additional expenses for companies and the financial benefits are not immediately visible and easily measurable.
This research relating to the analysis and integration of literature, including CSR, represents an introductory phase in the extensive research that relates to an examination of the most important dimensions of CSR and therefore the formation of the business model of business with successful CSR practices.
Wang, (2010) points out that these research philosophies on the analysis make a scientific and systematic method for observing and analysing information. In order to identify the relevant literature this research followed Dahlsrud's dimensions (2006), applying different keyword combinations including “corporate social responsibility” and which were combined with the words “dimensions”, “economic”, “social”, “environmental”.
As qualitative research, the collection of data has no predefined applications or answers. Rather, the research outcomes depend on the gathered information. This research includes a case study, which can be perceived as limited in space and time and concentrates on a single unit, focusing on the international terminal Yangon Port, which located in Myanmar’s Thilawa region.
The study will examine how Thilawa Port could work with CSR and implement it in the organisation, with management control systems. This includes interviews, preselected by the organisation, along with appropriate reference documents. There will be an interview guide created in accordance with the set strategies and other guidelines regarding CSR, and essential inputs for formulating interview questions.
The interviews will be conducted in both Burmese (the official language of Myanmar) and English, at the port premises. A brief outline will be sent to respondents in advance so that they can be well-prepared.
This study uses a single case study with the qualitative research strategy, where the research approach implemented has been that of interpretive. Willis (2007) defines interpretive as an approach that is implemented by the researcher in order to synthesize facts which are derived mainly from secondary sources, and which are qualitative in nature. Willis also observes that one characteristic of interpretive is that these facts are abstract in nature, and governed by a variety of factors which are non-tangible and difficult to measure.
The study uses the single case study approach by face to face interview to analyse the required of CSR in Thilawa port region.
There are several research strategies to choose from when doing exploratory research: experiment, survey, case study, action research, grounded theory, ethnography and archival research. For this research, a single case study is suitable since case study data come from specific sources and go beyond studying variables.
This study used recently published journals and books from the last ten years with the aim of showing the most recent findings in this field.
Respondents were chosen from senior staff who understand CSR issues.
Before the interview there will be a brief introduction about the purpose of the research During the interview, the researcher will discuss CSR activities in the supply chain and the logistics industry in Myanmar.
At the end of the interview, the researcher will ask the respondent to fill in the questionnaire to avoid any misunderstanding between the interviewer and the employee.
The questionnaire design came from previous studies and the literature review. A draft questionnaire was designed and pretested before the main survey. Reliability analysis was used to check the items in the questionnaire, which resulted in some items being revised.
The researcher set some requirements in the procedure of selecting the organisation to study. The organisations should be preferably Myanmar-based (to increase the opportunity of dealing with management in developing countries), should be in the supply chain and logistics industry, and should have needed operations with CSR at some level. At the beginning of this proposal, Thilawa Port came up as an alternative to contact, since it meets all the predefined requirements.
Permission will be required from authorised persons in Thilawa Port Authority, therefore some interviews will be with senior management of MPA, representatives of the Logistics Management Association, reports of MPA and the investors. The interview outcome represents primary data and will offer the basis for the empirical discussion and analysis.
Throughout this project, secondary data will be applied widely, and will have two sections:
When collecting data for the theoretical framework, the research will use online databases using such terms as “Corporate social responsibility,” “CSR,” “Supply chain management,” “Logistics,” “Management control,” “stakeholders,” “CSR and strategies”, among other terminologies.
Monitoring media is identified as a useful methodology because stakeholders expect to know about the company current situation and requirement of CSR activities through the firm’s communications and unbiased media sources.
Media databases searched to identify supply chain and logistics industry’s activities:
Business webpages and social media pages included:
Myanmar is a developing country and an emerging market. Many policies and regulations are being developed and undergoing refinement. CSR implementation in the country is affected by marginal awareness of the concept in many government ministries and industries. This study, therefore, seeks to develop a framework for what constitutes CSR and how it can help to boost sustainability in the supply chain & logistics industry through a case study of Thilawa Port.
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English
Burmese