Reference no: EM133497885

CASE STUDY.

Alicia is the CEO of Little Toys (LT). The company has grown rapidly in recent years LT sells children's toys online and in their stores in Ohio, Michigan, and Pennsylvania. LT contracts to have its toys made overseas, in China and Bangladesh. However, until now, LT has not really addressed Corporate Social Responsibility policies, at home or abroad.

Alicia asks your advice as a business ethics consultant. She explains her concerns to you:

"I need to decide what benefits and liabilities are involved in Corporate Social Responsibility (CSR) policies for the company, its stakeholders, and its reputation.

We sell our own brand of toys to department stores, as well as in our own shops, distributed through a warehouse center in Ohio, where we employ 130 people. I admit working conditions there are tough. Environmentally, we are not too 'green', as the warehouse is old and expensive to heat.

Our shops, in Ohio, Michigan, and Pennsylvania, need to attract more customers, and more motivated employees. Truthfully I feel bad that we only pay minimum wages. Even so, we have no recruitment problems, but a big turn over of staff. We could also do more environmentally and charitably. How can CSR help us?

All our clothing is made in China and Bangladesh, where we outsource under contract. Media reports are growing about dangers in the factories we use in China and Bangladesh. However, major shareholders and board members keep pressuring me to maximize our efficiency and enhance profits. To them, outsourcing is just making a contract to manufacture toys to our design, and CSR is an expensive luxury. They don't seem concerned about recent problems in Bangladesh, and criticisms about outsourcing generally.

At home, all our competitors advertise how socially responsible they are, but I just don't see the way to implement CSR into LT's domestic business. I always assumed that as good managers we ought to provide good profits, but also value those we employ as well as providing quality products to our consumers. Is there something more to CSR that I'm missing, here and overseas? I need you to give me some case examples of successful projects."

Alicia also indicates she needs your guidance about why 'doing well and doing good,' might be relevant to companies such as LT. She wants to understand the pros and cons of CSR, including outsourcing, and how far CSR provides financial and other benefits. Another of Alicia's concerns is how far LT ought to apply the same ideas of CSR at home and abroad?

When planning your advice to Alicia ...first consider detailed facts and concerns above. Then also include: How far does CSR benefit a company like LT, both in the USA, and overseas (outsourcing contracts in China & Bangladesh)? Refer to CSR cases and projects we have studied, or from your research. In what ways might LT benefit from partnerships with nonprofits? What types of project might LT undertake to pioneer CSR in its USA operations? How can Alicia 'sell' the ethics of CSR to those key shareholders and board members who are focused solely on profit and efficiency?