Fencing Capital Through Embracing Social Change

We are all angels with only one wing. We can only fly while embracing each other. – Luciano Crescenzo By DaRu indriYo

Globalization in business, new or old thing? One mother Earth, facing global village citizen. Everybody in this world was connected, no place to be alienated. Globalization has made its way from somewhere inside the academy to circulate in the public realm of commentaries, newspaper reports, TV, political speeches and public discussions. Globalization has become one of the most powerful and persuasive ideas to have captured the collective imagination, sometimes as dream and sometimes as nightmare. Asia’s companies against Europe and America companies? The reason is that for Western economies as a whole, and huge numbers of Western companies and their workers, the rise in Asia of the biggest middle class in history offers unprecedented money making opportunities. Asia’s relatively cheap but often well educated workforce continues to provide Western, Japanese and better-off Asian firms with an attractive place to set up factories producing goods for sale in the rich world. Asia increasingly offers something more tempting, the world’s fastest growing and often the biggest markets for the rich world’s own products and services. Culturally, Companies in Western countries have rooted in philantrophy tradition as social solidarity, so undoubtedly corporate social responsibility (CSR) was literally thrust upon them. Another opinion, CSR is beginning to be a influencing factor in consumer behavior in Europe. Especially, around 75% of consumers believe environmental issues and employee treatment to be key areas that demonstrated good corporate governance (GCG). Almost 35% consumers said that a company's commitment to social responsibility would affect their decision to buy its products. A solid social responsibility program companies can have some influence, and it need a long process that required knowing exactly what you want, and also communicating it clearly. Then there is auditing, best practices education, rewarding compliance and ensuring that variances from the standard are not ignored. Flexibility is important, it’s a highly collaborative process. When the American Management Association commissioned its survey linking ethics to business success, it found that the top driver of unethical behavior was the pressure to meet unrealistic business objectives. That pressure, in turn, contributed to many other problems, such as poorer quality, more accidents and increased overtime. GCG presents to avoid its problem, through 4 principles i.e. responsibility, fairness, transparency, and accountability. According to Morris, one of the first steps in crafting a successful CSR plan is defining what good looks like. Key elements are designing upstream business processes that support good working conditions and efficient product flow. It is also important to clearly define the rules and hold Nike employees accountable for compliance with Nike principles. This includes supporting sustainable business practices, encouraging suppliers to invest in worker training and by sharing best practices and the results other Nike suppliers have seen when they implemented some of those practices in their own facilities. Nike also employs suppliers human resources department as a strategic partner. Nike and its suppliers, Van Heerden advises suppliers to work smarter, not harder, and for buyers to add incentives to finish work on time, thereby increasing productivity and maximizing income. As the first world countries become increasingly aware of working conditions throughout the world, CSR has become increasingly important to publicity and to the bottom line. Nike has become a business ambassador, teaching suppliers that regardless of their location or local operating environment it makes good business sense to treat their workers fairly. Suppliers, for their part, increasingly understand that the benefits of ethical practices can enhance their own bottom lines, through expanded markets, better quality, more business and increased revenues. Increased innovation through freedom of association, plus a more prosperous workforce and a more robust local economy are icing on the cake. By working with its suppliers rather than dictating to them, Nike really is changing the world. CSR supported the internal corporate welfare, business sustainability and making corporate as global citizen. Holistic CSR required employee welfare, product accountability, and external community welfare services. So CSR made company reputation and branded in the heart of consumers. Regarding Fombrun and Van Riel, reputation consist of vision and leadership, working environment, socially responsible, performance, emotional appeal, product and services.

From an individual street hawker to a complex multinational enterprise, every business entity has its stakeholders and its impacts on society, both positive and negative. The concept of CSR, broadly defined as the overall contribution of a business to sustainable development (SD), should therefore be equally valid for large and small enterprises. But when CSR is discussed in policy circles, academia, the media, and wider civil society, the focus tends to be on the largest companies such as multinational (MNC) and transnational (TNC). Small- and medium-sized enterprises (SMEs) are often overlooked. The CSR agenda has almost entirely focused on large enterprises. The tools, frameworks and justifications for responsible business activity tend to cater for large companies, particularly those that can benefit from investing in measures that reduce reputational risk. Where it does touch on small- and medium-sized enterprises (SMEs), this is usually in a reactive or indirect sense, either as suppliers to larger companies, or as the beneficiaries of larger companies’ philanthropic initiatives. CSR discourse has frequently identified the challenge of making the CSR agenda more relevant for SMEs. For example, the World Bank Institute ran an e-conference in early 2004 on “the possibilities and challenges of CSR among SMEs”. One of four themes within the recent EU Multi-Stakeholder Forum on CSR is ‘fostering CSR amongst SMEs’. There has also been a specific focus on the implications of the CSR agenda for SMEs in developing countries. This mechanism means that the nature of trading relationships between SMEs and buyers, and how market power is exercised within such relationships, are central to the CSR agenda. This leads to one of the most challenging critiques of the current CSR agenda – that such supply chain standards can exclude SMEs in developing countries from lucrative markets. Indeed, surveys suggest that the most likely reason for SMEs to introduce an environmental management system is “when it becomes essential to secure and retain business”, either with local or international clients. In this sense, the notion of such standards as ‘voluntary’ can be misleading. It may more appropriate to consider them as ‘market entry requirements’ or ‘economic imperatives’. In pragmatic terms, it is clear that SMEs as they stand are a major economic force, upon which large numbers of people in developing countries depend for their livelihoods. At the very least then, CSR practices should be shaped in a way that does not adversely affect the economic viability of SMEs in developing countries. One of the most challenging critiques of CSR tools, particularly codes of conduct and supply chain standards, is that they can exclude SMEs in developing countries from lucrative markets, thus harming livelihoods.

Every company need a Corporate Business Process, i.e. Objectives, Business Strategy, Key, Success Factor, Balance Score Card, Cause Effect Diagram, Key Performance Indicator, Business Monitoring and Media for Communication. Good corporate governance has proved lacking in other Asian countries since the crisis in 1997. Economic reform, corporate and financial restructuring have been urged, cajoled and demanded by major international lenders and probably, too, to avert the next financial crisis. Real economics fundamental layed in economics strength of countryside relying on farmer economics and fisherman. The soul of co-operative has proven that 99,9 % of 42 million business units in Indonesia are micro and small enterprises (around 12 million are market merchants), 99,5 % opportunity of job provided by Micro Small Medium and Cooperative (SMESCo), 57 % requirement of goods and services provided by SMESCo, 19% export is SMESCo’s product has given contribution 2 - 4 % to national growth. The World Business Council for Sustainable Development (WBCSD), a coalition of 170 international companies, currently runs a project entitled ‘Sustainable Livelihoods’. This is based on the observation that “the poor crucially lack two things: 1) the opportunity to earn a better living and thereby increase their purchasing power, and 2) a tailored supply of products and services that adequately respond to their needs and that are appropriate in their design and price”. The project “seeks ways by which business can extend the benefits of the market to serve people, address their needs and allow companies to develop their business sustainably and profitably”. The subtitle of a recent output from the project is “Learning Journeys of Leading Companies on the Road to Sustainable Livelihoods Business”. Leading Indonesia Companies have best practices in CSR, for instance Astra’s pioneering to embrace small industries to support its assembly line. Danamon Peduli made a campaign to co-opt workers in the clean up of more than 600 wet markets across the country. Exxonmobil provided health-care efforts in villages around its Aceh natural gas facilities. Sampoerna Foundation spends about $20 million a year on education. Raja Garuda Mas which operated in pulp and paper and covered million hectare plantation area,concern on fire fighting, an integrated farming scheme, fibre farms, and also environment protection. Mandiri Bank and Shell inc. have sticking to spread ”start up business” virus for young and new entrepreneurs. There is a need to develop more comprehensive business support services on CSR for SMEs. There are already well-established structures providing business development support that target SMEs, but few of these seek to integrate social or environmental issues into their activities. There is significant potential to do so, by taking insights from the CSR agenda into the enterprise development field. There is also a need for stronger involvement of business representative organisations such as chambers of commerce (KADIN, APINDO, HIPMI, Cooperative and Business Association) in CSR advocacy and awareness raising, and in providing CSR implementation support to their SME members. Any public or private support measures must take account of the national or sectoral context, and be clear about the preconditions for successful implementation. Integrating CSR into existing enterprise development and business support services for SMEs should be able to implement in each large companies. It’s not just arm twisting, these reforms would help to strengthen the overall enabling environment for CSR among SMEs. They would build SMEs’ capacity to engage with CSR, but more importantly, they would help to create the drivers for SMEs’ engagement with CSR. If we could drive this ultimate goal, we can fly without wing. Definitely, I will encourage precisely that it must be done, and the company will flying to be a ”Guardian Angel”.