influence of globalisation and CSR (1 Viewer)

lizzardwizzard

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can someone please explain how globalisation and CSR influence operations strategy of new product design and development?
 

BMWM2

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wow, my first reply since chem exam in November (HSC)! Thought I would check back to see how the community is doing
Funnily enough, I am pre-reading lecture slides on CSR right now (unless there are two different things with the same acronym), so let's see if I can help you break down the q and answer it effectively. This may not be what you are looking for, so if others a reading this thread, feel free to contribute and critique me! I'll break down the impacts of both business terms independently

as you probably know, CSR (Corporate Social Responsibility) is the increasing societal pressure for organisations to exceed financial interests, profit maximisation motives and legal obligations as firms and provide social good/impacts upon the wider local + (and in some cases) global community. Examples include firms like Wells Fargo directing 1.5% of total yearly revenue to philanthropic ventures etc. I can only see how this would impact new product design/development in three potential ways:
  • it can be negative: a critique of CSR is the ethical and legal side of things. How much do firms contribute to social and community projects before it is considered a 'waste' of shareholder's investments on ventures unrelated to an organisation's profitability and performance. My lecturer clearly states that there is a point in which CSR can turn into poor financial management. This can negatively impact product production etc/operations strategies as it consumes valuable resources which can be relocated into more efficient production methods or the expansion of business infrastructure to improve volumes of output or elasticity in supply (the responsiveness of a firm to supply changes, expressed by a Long Run Average Cost curve, which illustrates economies of scale (lowest unit cost produced)).
  • By engaging with the community through CSR projects, it can help a firm realise and then target a shortfall in the market or an absence of a product that would fill a void of the general public. this can influence operations strategies by influencing a firm to plan to shift valuable resources into production or research of a good or service which can both provide assistance to the target market but also help a firm earn revenue from sales
  • Can form a closer corporate partnership between a community/region and a transnational corporation. for example, if a firm provides humanitarian assistance to a 'steel city' in China, it can form longer term positive economic connections and therefore gain a cheaper and more reliable source of steel for future infrastructure projects, influencing operations strategies and potentially changing methods or costs of production for a firm. Think of it as corporate networking. It can also help a firm market its products indirectly to those impacted by the benefits of CSR (poor towns directly impacted by Coca-Cola's 'global environmental program' are more inclined to choose their product over competitors)
I think globalisation is a lot more obvious - a more globalised economy is more 'open' trade and greater levels of specialisation etc, and has a broader impact on production and the operational choices of a firm. I focussed on CSR as I think it is undoubtedly the more obscure one
 

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