The History Of The Automotive Industry

Published Date: 02 Nov 2017

The automotive industry is still one of the world's largest manufacturing sectors, but it suffers from being very technology-focused as well as being relatively short-term focused. There is little emphasis within the industry and its consultancy and analyst supply network on the broader social and economic impacts of auto mobility and of the sector that provides it. There is a lack of people looking at higher level issues affecting the sector and its impact on society, the economy, and culture more generally. http://business.cardiff.ac.uk/centre-automotive-industry-research

Automotive Industry and the Economy

The UKs automotive industry as a whole had a turnover estimated to be £56 billion in 2011. The value of UK exports £27 billion in 2011. The automotive sector represented almost 9.2% of all UK trade in goods for2010. There are approximately 740,000 people employed in automotive industry in the UK. http://www.smmt.co.uk/2013/03/motor-industry-facts-2013/

The automotive industry plays an important part to the Welsh economy, although Wales is not well known for its automotive industry compared to other areas of the UK such as the Midlands. There are approximately 200 companies operating directly in the automotive industry in Wales, with a turnover of more than £3 billion annually, which is 11% of the UK total turnover and the industry employs 15,000 which is 2% of the total people employed in the sector. http://www.wales.com/en/content/cms/English/About_Wales/Wales_Fact_File

Wales and CSR

There are only a few countries in the world, Wales being one, where sustainable development is a central part of the responsibility of their government. The Welsh Government’s aim is to make improvements in social, economic and environmental areas that will show benefit’s now and in the future.

The Welsh Assembly’s definition of Corporate Social Responsibility (CSR) is 'how businesses manage themselves to produce an overall positive impact on society'. http://business.wales.gov.uk/running-business/corporate-social-responsibilty/corporate-social-responsibility-0

The Welsh Government has given a pledge to sustainable development and it is one of their core principles. The government’s aim is to improve the long-term quality of life for Welsh people and their communities. They are working with businesses to help promote Corporate Social Responsibility so that businesses integrate social and environmental concerns in to their day to day operations and also in their dealings with their stakeholders on a voluntary basis, such as:-

Ensuring that business adopted a health and safety and fair working policies.

Promote good community relationships.

Look at ways so that they operate in a low-carbon, resource efficient and sustainable way.

Ensure that they act fairly and ethically in all of their undertakings.

http://business.wales.gov.uk/running-business/corporate-social-esponsibilty/corporate-social-responsibility-0

However the only research I can find about SME’s and CSR for the Welsh Government is the research by Brooks and Evans and the finding of this research may be slightly biased due to the research being predominantly performed on members of Business in the Community who are already social aware companies, that being the case does the Welsh Government have an understanding of the attitudes and needs of the SME’s Wales and their constituents that they represent.

Findings

Case Study

One company allowed access to most parts of the organisation and allowd the interview of the heads for a number of different departments. This was helpful to get a fuller picture of how CSR affects that company, if at all, and how different roles and responsibilities within an organisation affect the way that manager perceives CSR. Where applicable any findings from this research were added to the findings of the questionnaire along with two other companies’ interviews.

The company was a long established fifth generation family owned subsidiary which had operated in the UK for over thirty years. It was felt that although the company did not have a specific Corporate Social Responsibility that there is an underlying belief to do the right thing. It was believed that the owner’s, who are not involved in the day to day operations in the UK, would not tolerate any unethical and unfair practises within the UK operation.

Review of Questionnaire Findings

Out of the one hundred questionnaires emailed out the response was very poor with seventeen questionnaires received but from only twelve different companies respondingOne response was unfortunate in that the production plant in Wales had just closed down with the production being moved to the Czech Republic, therefore being socially responsible for the local economy was not high on that specific companies agenda, however the General Manager was kind enough to respond to the request for information.

However I was informed by the Welsh Quality Centre that the response I received was higher than they would have expected. Therefore the decision was made to use the data from questionnaires which was then backed up by interviews at several companies.

Analysis of the type of company that responded

The size and type of companies that responded to the questionnaire was varied from companies with few members of staff to Ltd companies and Plc.’s but none having more than 249 people employed at their site. Three of the companies were subsidiaries one each from the UK, EU and US. Because the questionnaires received were from all of the required segments there is a fair representation of answers from each segment and each size and type of organisation is represented.

Most of the companies that responded had some sort of accreditation which was normally ISO90001 and two companies had both ISO14000 and ISO90001, whereas another company was working towards both standards.

Awareness of CSR

Out of the twelve companies, two responders were not aware of CSR, which is 16.6% of the sample. One was a very small company which may be expected however the respondent was from a larger company. This is compared to the findings of Brooks and Evans (2010) where from 114 firms only one firm claimed no awareness.

Cost and Profit

The feelings on whether CSR is resource intensive and costly concept were mixed with six answering yes, six no and five not sure. The interviews had the same response, that being it can be depending on how much time and resources are available and also what is trying to be achieved, but they understood that it didn’t have to be a costly concept.

CSR can increase profits eight responses were unsure, one was no but eight agreed that it could increase profits. Out the people interviewed this was a similar picture. Headlines about companies increased profits from investment in CSR may have had a persuasive influence over people’s attitudes, such Marks & Spencer’s and Ben & Jerry’s. But the interviewees did also point out that to get the benefits, such as a noticeable increased profit, out of CSR some sort of resources would normally need to be spent.

Is CSR just for large companies – two answered yes, two were unsure but eleven responded no. As most of the responses were no there is a clear understanding that CSR is not just for large organisations and that companies of all types and sizes can adopt CSR to some extent. The interviewees agreed with these findings adding that small simple things like recycling rubbish and changing to energy efficient lighting for example can make a difference without have to be an expensive burden to the company. One company made a conscious decision to change a vehicle for a more environment friendly vehicle which was good for the company because of lower fuel bills but also friendlier to the environment, which adds to the above questions that to be more socially responsible can increase profits, however it is possible the decision to change vehicles was made purely on financial reasons and the friendlier environment outcome was just an added benefit.

Is CSR essential to enter into business with large Plc.’s, two were unsure and eight replied no with five answering yes. At the moment CSR does not seem to be an issue for smaller companies that wish to have a business relationship with large Plc.’s. Out of the three companies interviewed only one could see this being a possible issue in the future mainly to do with not having an environmental standard which they are taking measures to address hopefully over the next twelve months. One of the other companies felt it would be an issue due to the size and type of business that they are involved in and with another company it has not become an issue, to date, and they have to address any issues as they arise.

Responsible company abides strictly to labour and environmental laws, there were three that answered not sure. I believe that they were the small companies where they possibly need to be educated that abiding to labour and environmental laws is not really an option. One answered no, not sure to interpret that response, but thirteen replied yes. This could be due to the fact that abiding by labour and environmental laws is not an option and there are heavy fines and penalties if companies do not. All three companies interviewed agreed with the view that it wasn’t a choice whether you abide by the law or not.

Responsible businesses go beyond what is legally required, three replied not sure, again I believe this is down to education but the other fourteen all replied yes. Therefore there is an understanding that CSR is voluntary and that it can have a positive effect on society and the environment. All three interviewed companies understood that going further than what was legally required of them can benefit both society and the environment.

CSR includes activities to protect the environment, three companies were again unsure and one reply no again this may be down to education of what is included under the CSR umbrella and thirteen replied yes, so you can conclude that people are aware that the environment is important issue to CSR. All three companies interviewed agreed that the environment is a CSR issue. (Tilley, 2000) states that ‘a study of SME’s attitudes towards environmental issues found a common theme emerging from interviews that self-regulation will not work – economic interest will always prevail over environmental interest’.

CSR is more relevant for manufacturing industries than for the service sector, two were not sure however all the other respondents reply no, and so there is an understanding that CSR is an issue for all companies whether they are in manufacturing or service providers. The three companies interviewed all agreed that CSR is for every company regardless of size of type.

CSR needs to be legislated to ensure a wide uptake, seven were unsure with one of the interviewees commenting that perhaps some legislation may be needed because smaller companies may not understand the possible benefits they may receive from CSR. Four said yes with one interviewee replying that it would be the only way to get companies to take their responsibilities seriously however they also send that this may possibly put companies off locating to the UK if there was too much legislation and the six responded no one of the interviewees quoted that there is possible enough red tape evolved in running a small business as it is without adding more which is unnecessary.

A study by (Williamson et al., 2006) of SME’s indicated that it would be more successful for CSR to be regulated than leaving CSR voluntary, they also claim that CSR policies that hope to promote voluntary actions based on the business case will fail as CSR practices are perceived as optional and expensive.

CSR is carried out autonomously of their daily operations, four answered unsure, four replied yes and nine answered yes. As nine replied yes most people understand that CSR should be part of the daily operations of a company. One of the interviewees said that CSR can be autonomous but it is better if it is embedded into daily operations and is part to the companies overall strategy. They added that when purchasing new plant equipment they factor in issues such the environment and health and safety into the decision making process.

CSR is a new name for what local companies have already been doing, seven were unsure, five replied no and five replied yes the size of the company plays a part in whether you believe this statement to be true some smaller companies may believe this to be true because they may give to local sports groups and employ local people. However larger company have a greater understanding in what is meant by be social responsible which goes a lot further. One of the interviewee responded that CSR is a broad spectrum of ideas and years ago before CSR was in the headlines the statement may well have been true, however CSR should be conscious effort to be social responsible and it is built into a company strategy. Another interviewee pointed out that not all small local companies are naturally responsible just due to their size and location, citing that some companies open up receive what grants are available and then close quite quickly and reopen in another part of the country.

CSR is predominantly motivated by public relations, three were unsure ten stated no and four replied yes. For CSR to be motivated by public relations companies would have to promote their CSR activities as most small companies do not the statement does not really apply to SME’s, which was the view of one of the interviewees and the other two was looking at from the view point of larger companies that some defiantly promote themselves using CSR.

What would be the biggest obstacle(s) to CSR in your business

One company did notsee any benefits to CSR and chose every obstacle for a reason not to undertake CSR within their organisation, with the acceptation of no support from top-management. This was a small Ltd company employing ten to forty nine employees. Three companies in total cited that they wouldn’t expect to receive any benefits from CSR. That being the obstacle you can take from the response that they do not believe that it is just the right thing to do.

One company, that is a subsidiary of a Plc., didn’t indicate any obstacles to CSR in their business.

Lack of time was the biggest reason given for not being able to adopt CSR within their business. Unless the time given up to CSR is seen as adding value to business it is difficult for a company to release staff and, from an employee point of view, if they are not being judged to those activities they cannot see any benefit to giving up their time, which could be spent on activities that they are judged upon.

Lack of human resources was the next reason, as companies are under constant pressure to beat targets with the same resources, as above to give up human resources were there may not be any benefit at all or the benefits would be long term is difficult.

Lack of funds is the next reason which is lower on the list than I would have expected. This is perhaps due to people’s awareness that CSR does not have to be a costly concept.

Lack of know-how was also given by three companies; this may be where the Welsh Government may need to concentrate if they are achieving their CSR goals.

Lack of employee motivation was given by one company and no support from top-management from one other. The two reasons go hand in hand support from top-management is needed for any CSR project to be successful and support from management and also training may help to motivate employees.

Brooks and Evans (2010) found that most of the above reasons were cited in their report with the exception of lack of employee motivation and no support from top-management. However those questions may not have been directly asked. In 2010 the economic climate was given as a reason, which would have been expected at that time. Scarcities of resources, both financial and time, were offered as reasons for barriers to CSR with another company stating that ‘they didn’t have time for proper business planning let alone planning for CSR’. They found that some SME’s had a perceived cost to getting and maintaining standards such as ISO 14000 along with there were no accreditations aimed just for SME’s.

Level of Importance of CSR Issues

The level of importance of some possible CSR issues depends upon the understanding of what issues are part of CSR,the type of organisation answering the question, and also the role of the person answering the question and their personal beliefs. The responses from some of the companies you would not expect from their industry, which is difficult to show due to anonymity.

Environmental Issues

Out of the environment issues that were asked to be ranked in the level of importance, waste handling was ranked the most important with 14 people ranking it at five and one ranking it at four. This may have been expected due to the fact that there are environmental laws in relation to the disposal of waste which most companies should be aware off. Waste disposal is a high cost to companies but it is also an area of CSR that would benefit most companies by recycling and so companies may even receive money back for their waste such as cardboard. All three of the companies interviewed perform some form of recycling and one receives a financial benefit from the process.

Energy efficiency was the next highest ranked issue twelve people ranking it at five and four people giving it a ranking of four. This is an issue that companies would naturally look to make savings by being more efficient; one of the companies interviewed ensured that a new heating system they had installed was the most energy efficient, also sensors were fitted to offices so that the lighting automatically switched off if the room was no longer in use. Both projects benefited the company and the environment.

Industrial pollution was ranked the next important issue with four people ranking four and eleven people ranking it at five, most people are aware of this issue due to BP oil spill which was in the news for weeks and the negative image that it gave BP. Companies that fall short of their requirement face heavy fines, therefore it makes sense for companies to have policies and procedures in place to stop industrial pollution and also help mitigate any pollution before does any really damage. Also high on the agenda of some activist groups is the natural polluting nature of some companies.

Renewable energy sources, three people ranked it at four and eleven ranked it at five. This is an area where companies can make savings however it is expensive and also the benefits might not be realised for some time. One of the companies interviewed did have solar panels fitted but it was part of a special scheme.

Only seven people ranked water consumption at a level five importance and three at level four while six rate it at three. One of the interviewees states that water wasn’t an issue in Wales because it rains most of the time. There may be a misconception about this as water needs to be processed before it enters the water supply. Companies can make a saving if they implement water saving measures as most companies are on a water meter, lower water usage means lower water bills.

Although seven people ranked cleaning procedures at a level five importance other rankings were equally spread. This may be due to the importance placed on cleaning in their industry.

Environmental law was rated highly by most people, but environmental impact assessment was rated highly by nine people.

Whether the environment was the primary issue or cost saving, this is an area that companies can make savings and have a positive effect on the environment.

Employment Issues

Overall most of the employee issues had high ratings which could be expected, as most of the people filling in the questionnaires are employees themselves and would expect to be treated fairly. Therefore fair wage policy and equal opportunities both had high level five ratings along with employee satisfaction.

If the workforce positive view of a company's CSR they tend to have positive views about the company in other areas, such as the integrity of the senior management, leadership style and the ability of an organization to be competitive in the marketplace. Lee et. al., (2012)

The conceptual model

Eun Mi Lee , Seong-Yeon Park , Hyun Jung Lee (2012)

Ten people ranked working atmosphere as a level five importance, as a pleasant working environment equates to happier employees who should be more productive.

Maternity privileges rankings however were level one from one person then one level two, four level three, four level four and seven level five. This may show that respondents were mainly men and perhaps have had problems due to staff being off on maternity leave.

Working hours and overtime ranking was also varied but this may be due to which point of view the question is being answered. From a managers point of view it may be that he needs to get the work done and from an employee’s point of view it may be they are being asked to work too long hours. Seven people rated this as a five, four at four and five at level three.

Many firms seek to ensure that their employees feel attached to their organization in order to ensure a low turnover rate. Toward this end, a good corporate social responsibility (CSR) reputation can generate positive attention from both current and prospective employees (Turban & Greening, 1996).

Issues such as harassment in workplace may only be rated highly if a company or person has had a problem with this issue in the past. However nine people gave it an importance level of five.

Staff training and management style both received the same scores with ten people rating it as a level of five, five ranked at four and two ranked it at level three. This may indicate that people perceive training and management style as an important part of business and they understand that both are important issues which a business has to get right for it to be successful. Staff training is important as well trained staff can add more to a business and it also helps to make staff more valued. For any project to be successful not just a CSR project, management style is very important. Management would need to show a commitment to the project and lead from the top so that people buy into the project. But only two people cited lack of support from top management, this would indicate that if there were any CSR projects that they would be supported by management. One of the interviewees agreed with sentiment.

Staff evaluation ranked highly with only one person rating at the lowest ranking and one ranked it at thee but eight people thought it was quite important and ranked it at level four with seven giving it the highest rating. One of those interviewed stated that it is important because it is a way of communicating with employees on one to one basis. However another interviewee stated that any problems should not wait for an annual appraisal as any issues, whether they are good or bad, should be addressed as soon as possible. Another commented that the size of the work force is an important issue as in smaller companies all employees have to work more closely so problems have to be sorted there and then.

An ethical work climate leads to more trust in the company, stronger attachment from employees, lower absenteeism and turnover rate, higher productivity, a more positive attitude toward work and good conduct from employees (Sims & Keon, 1997). Several studies find a positive relationship between a company's ethical climate and employee job satisfaction (Sims & Keon, 1997; Viswesvaran & Ones, 2002). A good CSR reputation may indirectly contribute to job satisfaction and lower employee turnover by invoking positive reactions from external groups, such as family and friends (Riordan, Gatewood, & Bill, 1997).

Governance Issues

Nearly all of the respondents rated corruption at level five. You can understand that people are aware that corruption does take place within business, however it should not be tolerated, also two of the companies interviewed were aware of the anti-corruption legislation. One of interviewees stated that this has never been an issue for the company in the UK however, when trading in Asia, consideration is needed to what may be considered a bribe or just normal business practice. For example paying for customers to relax in Sauna is normal in some countries compared to doing business on the golf course being normal in the UK.

No one scored business ethics below three and twelve people gave it an importance level of five. Most people believe themselves to be ethical to some degree and most people have an understanding of what is right and wrong. Therefore people would prefer to work for an ethical company for the same reasons as above in that they will be fair to them and also they may not be happy to perform a task that they deem to be unethical.

One of the factors of being ethical if the ability to identify which is thought to be right Schear (2007).

Paying fair taxes, the important word is "fair" everyone expects to pay taxes. One of the interviewees stated that constantly in the news headline are stories about large corporation that are supposedly social responsible companies, are finding methods to reduce their tax liability, where smaller companies struggle to make profits and are tax according on those profits, which is fair but, this leaves less funds available to re-invest into the business, which could then be used for CSR projects. Lots of companies maintain that they are ethical and responsible, while are the same time involved in some form of either tax avoidance or tax evasion. (Sikka, 2012)

There was a mixed opinion on inventory management which would appear to depend upon the point view the question is being answered from. A person or company that is not involved with large scale inventory control may not see this as an issue. One company stated that they have no need to hold inventory therefore this issue is not relevant to them. On the other hand one of the other companies stated that inventory management is a problem that they constantly need to control, the problem is they source goods from all round the world and there are long lead times in getting the goods to factory so the size of the shipments and the method of transport needs to be economical. The company does try to not use air cargo, where possible, which reduces their carbon foot print as it is an expensive transportation method. However they are at the mercy of large corporations that constantly change their schedules so they have no choice but to use air freight so that they can fulfil their commitments to the large companies else face large down time charges. They also stated that they believe some large companies, although claim to be ethical and treat their supplier fairly, do seem to use their size as a weapon against smaller companies.

Sourcing policies no one rated this below three and seven gave it a rating of five. Expectations of companies, by their stakeholders, are that they be responsible and accountable, to protect themselves from being accused of irresponsible behaviour Purchasing and Supply Management has emerged as an important factor when selecting and dealing with suppliers. Goebel (2012). This is again more of an issue for larger SME’s that deal with a large number of suppliers who may be world-wide. One of the interviewed companies stated that although they do not have a specific purchasing policy, they try to be fair when dealing suppliers and although not a requirement they prefer to deal with companies that have some form of certification. (Appendix **)

Child labour was rated by most people at a level five importance however three people choose level one. One of the interviewed companies stated questions have been asked to their foreign suppliers to insure that no child labour is used in producing their parts and when buyers visit the suppliers they have never seen any children. However some of the working conditions of some of the facilities, in India in particular, would not be described as the best. But if they stop using those suppliers that would affect employment in that area therefore it is moral dilemma.

Certification - there was no clear opinions on this issue andit depended upon whether the company had or was working towards a certification or whether it is a requirement to be in business. Two of companies interviewed stated that they could not operate without ISO 90001, stating that it is perquisite for dealing with large companies.

CSR assessment of business partners opinions were mixed, seven people rated it at level five , most of the companies that responded did not have a clear CSR policy themselves. However, as above, companies out of choice would prefer to deal with ethical companies.

Although eight people rated stakeholder engagement as very important other opinions were mixed. You have to understand who the company’s stakeholders are to determine whether or not stakeholders are important. For CSR practices to show a return, things such as company image improvement and customer loyalty are dependent on how stakeholders perceive the companies social commitments. Costa and Menichini (2013). European Commission (2011) suggests that ‘‘companies should have in place a process to integrate social, environmental, ethical and human rights concerns into their business operations and core strategy in close collaboration with their stakeholders’’.

Product quality was rated at the highest importance by thirteen people.A good quality product is naturally important to a business if it is going to be successful. One of the interviewees stated that a lot of thought is required to produce a "quality product" you have to make sure that the product can be produced economically, safely for the company’s workers and to the customer’s specification. To try to achieve this, the company has implemented lean manufacturing (5s) and to a smaller degree 6 Sigma, along with ISO90001.

Customer satisfaction is important in general to any business and eleven people ranked it a level five importance; however the question may be answered from a general point of view and not CSR. One person ranked at level two, one at level three and three people ranked it at level four. Customer satisfaction, in relation to CSR, is dependent upon whether CSR is relevant to their product and whether the sale is to another business (B2B) or direct to end user (B2C). Different customers will have different requirements from their products therefore it is important of the company to understand their customers. Crane (2005) suggests ‘that companies lack a clear understanding of their consumers' ethical beliefs’. All three of the companies interviewed believed that customer satisfaction and understanding your customer needs was a key factor in a successful business.

Eleven people rated financial reporting at the highest importance and eight people rated non-financial reporting also at the highest importance.

Community Work was either rated highly with seven people giving it the highest rating while four people rated a level three and another four rated at level two. Out of the three companies interviewed, none at the present undertake any community work.

Cooperation with schools and universities opinions was completely mixed; one of the companies interviewed allowed school work placements when requested in most parts of the organisation.

Again charity donations opinions were completely mixed, two of the companies interviewed did give to charity, one company considers charity requests from employees that the employee is actively involved with and also the company has a charity that it associates itself with. The choice of charity however may have a small bit of agency theory involved, as the charity in question has close links to a favoured sport of some of the management team. The other only gives small amounts to local charities. The company that did not give to charity stated that they cannot afford to give to every charity request and it would be difficult to decide which one to give to; therefore they do not give to any. This reason is similar to one of the Brooks and Evans (2010) findings which was ‘the company had too many requests and found it difficult to prioritize’.

People’s perception of the impact of CSR

Key 1 no benefit

2 slight benefit

3 some or small benefit

4 highly benefit

5 significant benefit

Operations Issues

As the graph clearly shows people believe that CSR would have the most impact on customer satisfaction and quality but the least impact on exports. Only five people would accept CSR to have an impact on operational costs however this may be the area where the biggest cost saving could be made.

Six responses indicated that their CSR would have some impact on productivity with another six indicating a high impact on productivity, this would be in line with the employee responses as a positive impact on absenteeism and employee turnover that should have a positive effect on productivity. One interviewed company stated that absenteeism can have a serious detriment to productivity and a stable work force is paramount in a manufacturing company.

Sales volumes and revenue are normally linked as too are peoples perceptions with five responses each stating that CSR would have no effect and five responses each stating there may be some positive affect.

CSR impacts on Employees

The most positive were eight people indicating a level four positive impact that CSR would have on absenteeism and 6 people indicated that CSR would have a highly positive impact on Employee turnover.

One of the interviewed companies has recently untaken an employee survey where they asked their staff questions about compensation, management and work environment. Overall the results that were released to the interviewer showed the company in a positive light where 60% thought they were compensation level was fair, 85% understood how their job contributes to the goals of the organisation and 78% felt that they were treated fairly by the supervisor, 78% felt free to openly discuss work-related problems with their supervisor and 75% felt the organisation was concerned about their safety.

The head of HR added that most of the employees know that the head of the HR door is always open if an employee has a problem of any kind. Also the company does not discriminate against any group when selecting new employee’s, an example of which is the application form does not require the prospective employee to answer questions such age. The above statistics are proven by the companies absenteeism rate which was 0.056% and is much lower than their target of 2% (this does not include long term sick). They also have a stability rate of 100% and the average length of service currently stands at 9.04 years with the average age of its employees at forty six, and two employeesover the current age of retirement.

Peoples attitude to value added per employee was seven indicating there may be some benefits, but on the extremes three stated no CSR benefit and one there would be a significant benefit with four stating a high benefit.

CSR impact of the market place

CSR impact on reputation of the firm has eight responses stating that CSR has a significant impact on a firm’s reputation, but three responses stated that CSR would have no impact. Two of the companies interviewed stated that the impact of CSR on a company’s reputation would only really be an issue if the company had a presence in the media, however word of mouth can effect small local companies, which is cited as a possible benefit in the Brook and Evans (2010) findings, therefore as expected five respondents stated that CSR would have no effect on media presence and five stated that it may have some impact.

Eight people indicated that CSR would have some impact on innovation, and then it was about equal either side, with three stating that it CSR would have no impact to innovation and three stating that it would have a significant impact. One of the companies had previously been awarded the queen's award for innovation. Brooks and Evans (2010) stated that innovation improvements were an important driver for company decisions for adoption of social responsibility.

The other areas, such as pricing, are dependent upon the market they are operating in as some markets would be more sensitive to CSR than others. One of the interviewees stated that each one of their customers has different demands, one customer operates an open book policy where they know the cost of the product and then allow a set percentage on top, but most customers give a target price which they have to meet, so CSR would not necessarily be an issue for the seller but it would be more an issue for the buyer to make sure that the price being paid for the goods is fair.

Market access and market share as above is dependent upon the market place, however one interviewee quotes that some of their customers just pay lip service to CSR while to others, such as Volvo, it is an important part of doing business and without certain environmental policies you cannot do business with them. Five respondents stated that CSR would have no impact on market share and access while six indicated there may be some.

Company Governance

There seems to be mixed opinions on these issues which could be down to the role of the person answering the question as this may sway their opinion. One of the interviewees stated that from a finance point of view CSR would be very important as a good CSR record would help with all issues. Credit providers would look at any credit application more favourable because a good CSR record may mean they are more likely to get their money back. But other departments are not concerned where the money come from they just expect the funds to be available. Perhaps this why five people stated that CSR would have no impact on credit and lending and six stated there would be some and four stated there would be a significant impact.

Eight people indicated that CSR may have some impact on Government relations then on the extremes three people indicated no impact and three indicated significant impact. As above the way the question would be answered is dependent upon whether or not the person has any dealings with any Government bodies.

Responses on investor relations would depend upon the ownership of the company because owner managers make their own decisions about CSR however subsidiaries or Plc.’s investors need to feel that the company is well run, therefore CSR would be more important. This is probably indicated in the responses as they are more less equally spread.

CSR Involvement

All of the firms were involved in some form of CSR activity whether they realized it or not. Unlike Brooks and Evans (2010) findings only 78% of firms undertook some form of CSR, however the sample size may not be true representation.

Comparison of CSR activities

The below tables compares finds from the current research and that of the Brooks and Evan (2010)

In some instances a direct comparison is not really applicable due to the current research being industry specific and the mix of companies.

Current Research

Brooks and Evans (2010)

CSR Activity

Number of instances

%

Number of instances

%

Donations of money to charities

9

75%

67

59%

Involvement in schools or colleges in any kind of educational initiative

8

67%

58

51%

Sponsorship of local sports clubs

4

33%

38

33%

Recycling or similar waste management such as pollution reduction

9

75%

37

32%

Having an environmental policy

11

92%

36

32%

Sponsorship of local community groups

3

25%

34

30%

Donations of prizes for schools or fetes (or similar)

6

50%

34

30%

Reduced prices for local groups or charities

1

8%

22

19%

Donations of equipment

2

16%

18

16%

Supporting employee volunteering for charities or other groups through time off or similar

3

25%

17

15%

Having an accredited environmental management system like ISO 14001

7

58%

17

14%

Ensuring suppliers have sustainability policies

6

50%

16

14%

Creating opportunities for the economically inactive

2

16%

14

12%

Helping other businesses through mentoring or similar

4

33%

14

12%

Encouraging staff to car share or use alternative modes of transport

3

25%

13

11%

Ensuring representation from diverse communities

4

33%

13

11%

Staff involvement in community based activities like environmental improvement or renovating community buildings or similar

0

0

12

10%

Allowing community groups or charities to use your resources

1

8%

11

10%

Payroll based giving

1

8%

8

7%

Helping local community develop new businesses

2

16%

2

2%

Companies that have an environmental policy have almost trebled from 32% in 2010 to 92% in to 2013, the environment is a big issue and all companies of all sizes have an impact however the number of instances of recycling has not risen but quite as much. In line with the rise in environmental policy is the rise in companies that have an environmental accreditation in 2010 14% of companies and in 2013 58% of companies.

Ensuring that suppliers have a sustainability policy have risen from 14% to 50%, this is in line with the rise in environmental policies, as if companies are now being asked the question they have to produce one, also you cannot ask your suppliers if they have a policy if you do not have one yourself.

Recycling waste management instances have risen by more than 50% since 2010; people may be more use to recycling at home so they may do it in work. The environmental waste levy may have affected this percentage as waste is an expensive cost to a business therefore it may not be purely a rise in environmental awareness.

Gift to charities has risen, money has risen from 59% in 2010 to 75% in 2013, and donations of prizes has risen from 30% to 50%. In 2010 the country was in recession and most companies had to watch their finances very closely. Sponsorship of local sports clubs percentage has stayed the same 33%, percentage of donations of equipment has stayed the same at 16% and sponsorship of local community groups has fall slightly from 30% to 25%.

Ensuring representation from diverse communities has risen from 11% to 33%, however this may be due to large percentage of European workers that now live and work in Wales.

Benefits of CSR Enagement

Current Research

Brooks and Evans (2010)

Number of instances

%

Number of instances

%

Improved community relations

4

33%

63

55%

Reduced waste costs

9

75%

51

45%

Improved customer perception

3

25%

47

41%

No benefit expected – it is the right thing to do benefit expected – it is the right thing to do

6

50%

42

37%

Access to new markets or customers

3

25%

32

28%

Better staff morale

5

42%

27

24%

Improved efficiency

2

17%

23

10%

Improved recruitment

3

25%

21

18%

Improved relationships with suppliers

3

25%

17

15%

Easier to ‘sell ourselves’ when we bid for work

4

33%

17

15%

Increasing staff skills

5

42%

14

12%

Good advertising

6

50%

12

11%

Better knowledge of local markets

1

8%

8

7%

Business networking opportunities benefit gained

4

33%

7

6%

Improved innovation internally

6

50%

5

4%

Improved investor relations

2

17%

5

4%

Staff loyalty

5

42%

4

3%

No benefit gained

2

17%

11

9%

The obvious benefit which is in line with the other findings is the reduced waste costs, which is the highest percentage of companies realising the cost saving 75% compared to 45% in 2010.

Companies’ citing that there is no benefit expected as it is the right thing to do is 50% in 2012 compared to 37% in 2010.

Good advertising has risen from 11% in 2010 to 50% in 2013; however this doesn’t match up with other finding within the same questionnaire.

There was also a large rise in improved innovation internally which was 4% in 2010 compared to 50% 2013.

Staff loyalty is a very large percentage rise from 4% in 2010 to 42% in 2013.

However improved customer perception has fallen from 41% in 2010 to 25% in 2013. Also improved community relations have fallen from 55% in 2010 to 33% in 2013.

Some of the responses in this section of the questionnaire do no completely link with how they have responded to other questions.

The respondents in the Brooks and Evans (2010) research were found to be altruistic although they may have received some rewards. One started project as just a tick box exercise but found they continued with the programme because their staff enjoyed it.

Limitations to Research

One of the