Outsourcing in China: Implementing CSR for business sustainability
1) Why CSR is important?
CSR (Corporate Social Responsibility) is closely related to ethic in doing business with dedicated involvement by taking action for integrating economic, social and environmental imperatives into the activities. Typical examples are donations, CO2 reduction, but also innovations like medicine when promoting global health improvement. Refer to Canadian government information example as CSR guidance.
2) Does your company need to be Social Responsible?
More than a trend, during the last 10 years, it has become a mandatory part of the business for big corporations. Small and Medium size Enterprises should consider integrating CSR in their global strategy for the following reasons:
- CSR brings personal satisfaction of contributing to a better world.
- CSR is a way to differentiate from your competitors to your customers, no matter they are corporations (B2B) or consumers (B2C). Its marketing value has been strongly used by many Multi-National Companies (MNC) during the last decade. The direct effect is branding and enhanced company image, the side effect is significant sales increase.
- CSR encourages money saving and manufacturing performance improvement. Typically, a production yield increase leads to higher efficiency, less power consumption and eco-friendly direction.
- Because everyone wants to work for the good guys, dedicated CSR policy is a customer and employee engagement. A high reputation company can not only attract talents but also have them involved in the actions and company branding promotion.
In a nutshell, CSR allows your company to be more innovative, productive, competitive in a sustainable industry.
3) The ways to CSR implementation in China
Many companies have difficulties to perceive a clear positive strategy while outsourcing in China, often seen from western countries as job killer. However, within a global economy, low cost manufacturing is necessary and socially important. There are many actions that can be put into practice while getting benefit for your business.
Some of the CSR contributions companies can implement with support of a local service provider are:
- Being ethical: Build the business on fair trade, through supplier relationship for long term development. Processes must be defined to avoid bribery and to promote impartial results for decision making and performance improvements. Only an independent service provider can provide high value analysis and transparency on all actions, when they are paid on service based and not on a percentage of good costs.
- No middle man: Removing the middle man is clearly one aspect to be promoted by a local services provider. Without the middle man, more margins are allocated to both customer and supplier, moving to an obvious win-win trade. With supplier having a higher margin, it has the ability to adjust the quality level and social capability according to your requirements. The service provider’s responsibility is to shape direct relationship with your suppliers by acting as a facilitator.
- Take actions: Many companies don’t necessarily know what is possible to do and the potential ways they can develop their social responsibility in China. Of course, basic activities like SA8000 social audit are a first step to ensure, no children are employed and working conditions are acceptable. Likewise, many other ways exist when you have a sturdy visibility on your suppliers and their specific cultural behaviors.
- Chinese oriented CSR: When selling in China, western companies should be concerned by how CSR is understood in a country for which collectivism is prevalent. Again, a local service provider is competent in advising the right applicable strategy in relation to the marketing and branding activity.
- Donations: There are almost limitless options in China for charity. Best practices are to align your investment with your core values by building a seamless and sustainable integration. A typical example is supporting social and intellectual development of your suppliers’ workers, enhancing both suppliers and workers values.
- Import Safe: How to ensure all imported goods are compliant with the destination regulation without investing in a team of specialists to control all documents and data? Assuming the expanding demand of such services, thanks to ever growing regulations complexity, it is now possible to optimize your compliance costs with offshore resources.
The first step? You must define what CSR means to your company and how you want it to be recognized from stakeholders.
4) Not convinced?
There are famous examples where you don’t want to see your company name, like Nike (http://tinyurl.com/cqbre2u). CSR is not a way to clean the company’s bad behaviors, the benefit lies on doing the right thing for a sustainable business and for the planet. This is why it is very important to define your CSR strategy based on your corporate values.
One famous positive example is GE Ecomagination: http://www.ecomagination.com/
5) SAOS, your local partner on CSR
At SAOS, we believe in CSR core values and the associated long term benefit. Not only we built our business to be socially responsible, but we believe that it can help our customers to develop their brand image worldwide by sharing those values. Because SAOS is based on Western and Chinese integrated management, we have this unique positioning on the market to deeply understand our customers’ requirements and transpose them to a Chinese environment to get the most of it.
Shape your CSR awareness in China with SAOS, now!
Fabien Gaussorgues SAOS General Manager