July 04

Going Green Translates to Good Business

Learning from the article that companies in the US are in an investing spree on this so called “green revolution,” I ended up thinking of reasons how these actions add up to the main goal of any corporation, that is to increase owners’ wealth. And this investing spree is not in the US alone. In our country, there’s Downy’s Isang Banlaw, energy efficiency ads from makers of compact fluorescent lamps, SM’s recycling depot and green bags and the advent of green cars (Prius by Toyota and Accord ’08 of Honda). The La Mesa Watershed was reforested with the help of several companies like Shell. And a lot of companies are sponsoring environmental awareness campaigns and projects. It sure is expensive to put up a wind turbine and generate your own electricity, to finance a reforestation, to design and run recycling programs or to renovate stores to refurbish their efficiency in terms of energy usage, yet a lot of companies are willing to invest money in these nonprofit endeavors. Maybe there’s (really) a lot more to sustainability than just selling products or even selling green products. But what is this “more?”

Corporate citizenship has been a popular concept in the business world. It argues that companies can pursue their long-term interests along with contributing to the development of the society and environmental sustainability. The pressure generally comes from expectant stakeholders. Customers expect companies to fulfill their social responsibilities as a survey shows that 9 out of 10 customers expect companies to be supporting and acting on social issues. Another study tells that 86% of the consumers are willing to shift to a brand associated with a cause. They are increasingly making decisions according to the social reputation of the brand or company, to quote Bradley K. Googins of Boston College Center for Corporate Citizenship. To establish a more concrete basis, let’s take the example of BT, a British telecommunication giant. Its caused-related activities comprise 25% of its customer satisfaction rating. Moreover, the research also shows that stopping the said activities would reduce customer satisfaction by 10% which translates to a 20%-30% reduction in revenues. Another good example is Whirlpool. Whirlpool has been donating refrigerators to every Habitat home built in US; then sales shot up by 47% and web site hits rose dramatically. Personally, I’d rather buy a product from a company which is involved in charitable acts even if it’s more expensive than the other brands available in the market. It’s like hitting two birds with one stone – I’m getting the product that I want and I get to help the company in its altruistic goals. I’m sure you think the same way as well. As mere humans, especially with the kind of value system we have as Filipinos and the current social and environmental crises we are experiencing, as much as possible, we don’t want to allow someone/or the environment to suffer at our expense and we’d be delighted to contribute anything we can to the betterment of the society and environment, so in turn we see socially and environmentally responsible companies as channels. As for the companies, the challenge is how to incorporate this growing consumer behavior to their operations to their advantage.

From these we can say that corporate citizenship has the power to influence consumer and employee behavior. There’s indeed a lot more to sustainability than just selling products. It’s good to earn a lot of money by selling your products well and by making your products sellable, but it’s also important not to forget that the intangibles (reputation, per se) are keys to long term sustainability in an era that holds rising expectations on business’ role in the society. Corporate citizenship, when exercised tactically, translates to good business.

Many say that an organization’s most important asset is its workforce – its people – that some businesses like Citibank would pay a skilled employee higher than other employers to keep them in their company. This is really important that field for human resource management has become so vast, with the competition growing tight and fierce. I interviewed a manager who handles blue collar workers in a handicraft factory. She’s Jullie Anne Mendonez, my cousin, and currently handles the operations of a family owned handicraft exporting business in Albay. “Maybe the most common motivational problems occur in a factory with low-salaried workers who do generally monotonous jobs,” she told me. Some would opt to chat with their co-workers during work to alleviate boredom. Unwilling to work, some would simply not show up for work – which is the biggest problem for a factory with so many bulk orders to be delivered on time. Although money is a major motivator for this class of workers, the business cannot afford to pay someone more than what they could get from him in the form of labor – any company would definitely not do it either. In turn they implemented some non-monetary rewards such as recognition for a job well done. They would award an outstanding employee the “employee of the month” award or the like. “Even if there is no monetary benefit, people also long for recognition even in the smallest possible way,” she told me. I, myself, can say that this is true. People need things other than what money can buy, and those things include recognition that gives them the sense of fulfillment. “And it [giving non-monetary rewards] really is effective,” she added. It is also helpful to develop the relationship between the manager and the workers, according to Ms. Mendonez. She does this through having a Christmas party, even a simple one will do, and allot some effort to give the workers personalized gifts. Through these the workers will feel that they are valued and they are seen not just as workers in the factory but as important parts of it. “Minsan, aabot sa punto na ang personal na problema nila ay problema mo na rin,” she mentioned. That was the second time I heard that line from an operations manager. There was a case about a worker who skips work frequently. She had a talk with him and found out that the money he’s making for a day’s work is not enough that he would usually have no money to pay for the transportation to the factory the next day. In their talk they agreed to increase the pay provided that he would produce this amount of goods for the day. And surprisingly, the worker came the next day with a greater motivation to work. This is just one of the many problems she has to deal with. “I sometimes [Ms. Mendonez] feel like I am the Ate of everyone there in the factory,” she said with a chuckle. To her, her work is not just meeting the production deadlines. It’s also taking care of those workers who rely on the company for their living. “It’s very fulfilling to see the workers work with smiles on their faces — hearing laughter from time to time during work — and see them grow with us, and these, in turn, motivate me to continue working [with them]” my cousin ended the interview with this line.

I think the government prefer importing rather than exporting is because we can’t produce that much. besides some of our products are not as competitive as those from the other countries. In business, there’s no point in competing with prices alone.

Plus the asset of our country in manpower, that’s why we can consider dollar earning Pinoys as imports, that includes call center agents.

What happens in Japan is that there currency is going down and while the cost of living is going up, the salaries are too, and they don’t have to worry on things like low purchasing power ‘coz they could produce what they need internally, they don’t have to rely largely on imports. But this is not the case in our country, coz we are dependent on imports, I guess. and so the government has to work on increasing the purchasing power of our currency. magulo ba?

But the government doesn’t see the local exporters with a blind eye, even if the weakening of the dollar [due to the subprime crisis in the US], is out of their control, they are still working on reducing the rate of appreciation so it won’t be really that detrimental to the exporters and give them enough (?) time to adjust and be ready to face a heightened competition in the international market. But the years of attractive export prices have served its purpose and became a bridge for the local exporters to position themselves in the said market, IOW, may mga koneksyon na at goodwill sa mga dayuhan. kaya somehow, they can still survive, even after the drastic appreciation of peso.