Responsible management

In today’s business environment, managers are frequently faced with a variety of ethical, environmentally friendly, and responsible challenges. A company’s issues can all be successfully handled by responsible management, which includes appropriate measures. The highly competitive nature and rising operational costs of the construction business make leadership more and more challenging. Additionally, the management is under increasing pressure to meet the expectations of the public as a result of the current environmental activism and the challenging economic climate worldwide. As a result, the company leadership must deal with the challenge of properly allocating resources, such as labor and money, to cope with industry-specific details. In order to advance responsible management, co-operating social responsibility in promoting responsible management in the building sector. Additionally, it briefly outlines the ethical values underpinning the CSR and cooperate leadership before evaluating the impact of these issues on the human resource, supply chains and marketing in the industry. All these discussions will be based on a case study of a UK Construction Company, and hence the article will end with advice to the leadership of the organization on how responsible management can influence its performance and sustainability. The business of choice will be Barrat Development PLC. The selection was informed by the fact it is an old firm that has shown resilience in the country for a long time.

Responsible Management and Corporate Social Responsibility in Barrat Development PLC

To understand the relationship and the influence of these two issues, it is imperative to highlight the company’s background and current position briefly.

Company Profile of Barrat Development PLC

Barrat Development PLC was started in the year 1958 and grew significantly in the 1960s period before becoming listed in 1968 in the Landon Stock Exchange (Barratt Developments PLC, 2015). The firm operates in two countries namely Scotland and England (Lech, 2013). Over decades, Barrat Development PLC has developed various designs of houses to meet the ever-growing demand in the region. The company has managed to attain a five-star rating on the annual Home Builders Federation survey based on the customer satisfaction. On performance, the company has been fairing with constant improvements over the past recent years. It boasts of 92% completion rate for all the projects started in the year 2017 (Lech, 2013). Financially, the organization also has a stable increase in profits over the past five years with £765100 million in 2017 pretax profit up from £682300 million in 2016 representing an approximately 10.8% more than the previous years (Barratt Developments PLC, 2015). The leadership of the company is guided by clear and well-established principles which ensure that there is harmonious running of the business activities. Moreover, there are comprehensive policies that govern the operations at different levels of management together with select supervisory committees (Famiyeh, 2017). Finally, it is imperative to note that organization has put in place the regulations to control every aspect of the business, such policies include; communication and investor relation, climate change, environmental, health and safety, ethics and community policies just to mention a few (Barratt Developments PLC, 2015). It is from this initiative that Barrat Development PLC has managed to develop a sustainable, responsible leadership. A good indication of commitment to its community obligations, the enterprise has a well elaborate corporate social responsibility reporting system.

Responsible Management

Managing responsibly is the vast topic but in the organizational context in encompasses the dealing with the business performance while keeping in mind the significance of sustainability and the interest of stakeholders in the company and its environment (Hemphill, 2016). Barrat Development PLC has already taken care of the financial outcome by invariably positive positively changing profits for almost half a decade now (Famiyeh, 2017). However, the primary activities of the firm involve the alteration of the environmental settings and therefore the need to address the CSR. Additionally, the CSR will be essential in building the company’s reputation through accountability and transparency. The labour element of the building industry is equally competitive and thus the need to develop a strong employer brand among the potential employees. (Famiyeh, 2017) Nevertheless, this article will focus on the CSR and its relevance for the operations of Barrat Development PLC.

Corporate Social Responsibility in Barrat Development PLC

Studies have suggested that CSR is essential in creating organizational sustainability, resilience, and reputation (Székely and Knirsch, 2005). All these three aspects are fundamental in influencing the survival and performance of any business. There are various ways to which an enterprise may achieve CSR including philanthropy targeting the bottom of pyramid (BoP) section of the community’s population (Hemphill, 2016). Other techniques include accountability and transparency, environmental conservation efforts, meeting the customers and suppliers’ needs and proper talent management (Székely and Knirsch, 2005). Support the people in the bottom of the pyramid is crucial in improving the living standards of the population around the firm. BoP is comprised of the members of the society who are living below the poverty line and therefore are in need for basic needs (Otuyemi, 2017). An organization can, thus, take an obligation to provide such essential wants including construction of necessary infrastructures such as schools and healthcare facilities. Additionally, it can support education for the bright and needy students through scholarships (Hemphill, 2016). In so doing, the business can improve the future income levels in the community through increased literacy and at the same time enhance their health conditions (Zillante, 2011). Training the youths will is a necessary but not a sufficient condition for upgrading the living standards of the population in the society (Otuyemi, 2017). It is therefore imperative that a business provides opportunities for employment and apprentice for the graduates in its area of operation. Barrat Development PLC has been participating in such a program for decades now by sponsoring learners and providing career development opportunities for approximately 184 individuals annually (Barratt Developments PLC, 2015).

Another approach to achieving CSR is environmental consciousness in business operations (Sierra, Zorio and García-Benau, 2012). The strategy involves participating cleaning of the surrounding, encouraging afforestation, use of clean energy to reduce the emission of poisonous gases to the atmosphere. The building industry is a very sensitive venture regarding environmental health as it involves land use which may result in the clearing of vegetation that is vital in balancing CO2-O2 ratio in the atmosphere. (Zillante, 2011) Moreover, construction consists of the use paints, stones, timber and cement and these items are extracted from the environment or manufactured thus leading to pollution (Alexandre-Bailly, 2011). Furthermore, a business must strive to ensure responsible exploitation of natural resources such as trees for timber and quarry for stones. Barrat Development PLC addresses the environmental concern by having 70% of their houses built on brownfield lands and promoting responsible timber sourcing.

Accountability and transparency are significant parts of the CSR for an organization (Haenlein, 2009). Adequate and standardized financial reporting is a foundation for achieving responsibility for the business (Zillante, 2011). Stakeholders including suppliers, investors, shareholders, employees and the government are concerned with the organization’s performance as it indicates the financial stability of the business. Suppliers are interested in the liquidity of the firm as it determines its ability to settle the debts; employees also are concerned with the same financial aspect to be sure of their remunerations (Sierra, Zorio and García-Benau, 2012). The state depends on the transparency on the profitability to estimate its tax revenues and ascertain the economic stability. Investors and shareholders’ main aim is to make a profit and therefore will be pleased if they can track the return on capital of the firm. Barrat Development PLC has taken good care of this aspect of responsible management by frequently publishing its financial performance annually, semi-annually and in every quarter.

Finally, it is paramount to mention that safety is a crucial aspect of CSR. Housing industry can be disastrous if the not well regulated and sustained (Sierra, Zorio and García-Benau, 2012). Poorly designed and constructed buildings are not resilient enough and have destroyed properties and loss of life on many occasions. The developer must ensure safety for its consumers and contractors (Barratt Developments PLC, 2015). This can be attained by contracting highly qualified and certified constructors and adopting the designs which prove to be resilient enough and therefore can survive any climatic condition. Barrat Development PLC values the safety of all its clients and employees, and this is evident by the five stars rating based on customer satisfaction survey.

Despite making a commendable effort towards CSR, Barrat Development PLC still has a long way to go regarding this aspect of management. It is advisable for the business to adopt policies that with further its CSR roles (Ekatah et al., 2011). Where a tree has been cleared to pave the way for the construction of a house, the firm should respond well by planting twice the number in another area in the local vicinity (Haenlein, 2009). More involvement in CSR will improve the competitive advantage of the business as it will help in winning the trust of the entire community.

Values in Barrat Development PLC Underpinned by Ethics

The company has established numerous policies and values that guide ethics among its staff and the community. One critical principle in the organization is respect and satisfaction for the clients. Among the ethical issues that any particular firm has to deal with is dealing with the customers (Otuyemi, 2017). It is crucial to note that, buyers are the backbone of a business organization and therefore must be treated with dignity (Barratt Developments PLC, 2015). Barrat Development PLC is always committed to developing quality products which are carefully designed to meet their clients’ expectations. It also sells the houses at prices relative to the location and the prevailing market conditions thus the customers do not feel exploited (Otuyemi, 2017). This value explains the reason as to why the organization can command a significant market share in the industry. Secondly, the company upholds the virtue of environmental conservation as for this purpose; it has well elaborated policies to address the issue (Sarhan and Fox, 2013). Examples of such values include safeguarding the environment under which it seeks to promote biodiversity of habitats across all their developments (Sarhan and Fox, 2013). Moreover, the enterprise intends to minimize the environmental impact of its activities by choosing clean energy sources for its structures.

One of the major ethical concerns in the modern business environment is corruption and bribery. It is evident that many organizations are shortchanged in the procurement and employee recruitment process where the people in charge of these activities take bribes and either hires less qualified individuals or purchase materials of low quality. Many companies have lost a lot of money due to mismanagement and embezzlement and therefore the need for a strong policy to arrest this unethical practice (Barratt Developments PLC, 2015). Barrat Development PLC has acted appropriately on this issue by setting in place a bribery and corruption policy which requires all the workers not to give, offer, promise or solicit bribes any undue advantages to keep or obtain business (Otuyemi, 2017). The policy also spells out that the organization must always maintain transparency and create awareness for all its employees on the consequences of engaging in any illegal activities.

Firms must offer their workers with the suitable working environment and proper remuneration (Alexandre-Bailly, 2011). The workplace needs to be healthy and safe for all the employees to ensure motivation and productivity. Ethically, the staff should have time for leisure through annual leaves and be given the opportunity to develop their career. Barrat Development PLC has made a significant step on this element of management by making it one of their primary priorities to invest in its people (Barratt Developments PLC, 2015). This implies that it not only offers job opportunities but also carries out capacity building through regular staff training and promotion (Lee, 2015). Constant performance appraisal has motivated the workers to lead to increased output per individual. Some of the values being upheld by the staffs of Barrat Development PLC include; honesty, respect for the rule of law, fairness, respect for others and commitment to organizational values. All these ethical values have to be integrated into the business to ensure its harmonious and smooth operations for better performance.

Stakeholders Engagement and Responsible Management in Building Organizations

Building and construction industry is made up of various parties including the contacting companies, developers, clients, suppliers of raw materials, the government, designers and surveyors among many others (El-Sawalhi and Hammad, 2015). The success in the housing sector will, therefore, depend significantly on the coordination among these players and the ability to satisfy the needs of each of them in the best way possible (Landin, 2011). At the center of everything is the development firm which is the one to contact the service providers, comply with the set regulations by the state or different local authorities and at the same time have to satisfy the diverse needs of the customers. A company such as Barrat Development PLC, therefore, has to establish good relations with all these stakeholders including its employees (Barratt Developments PLC, 2015). In this section, the paper examines the responsibility of the company towards the customers, local communities, business partners and workers.

Responsibility to HR

Human resource is arguably one of the most crucial inputs in any production process and therefore has to be critically and carefully managed (Landin, 2011). It is the role of the company leadership to ensure that they attract, hire and retain the best skills available in the job market. Unlike the traditional management styles where the workers were used like machines, the current system gives room for their views and creativity (Bal et al., 2013). There is a culture of freedom that has found its way to a corporate world where workers are set free to modify the production process in a way they deem fit so long as the efficiency is maintained. However, the organization is obliged to remunerate the employees adequately, train them and give them a chance to grow up the management ladder instead of bringing in new talents (El-Sawalhi and Hammad, 2015). This initiative will not only motivate them but will also help in retaining the quality skills hence cutting down recruitment costs (Bal et al., 2013). Moreover, giving workers such opportunities helps the firm to create a healthy employer brand and become job seekers choice (Ravenwood, Muir and Matthews, 2015). The business also has a responsibility to communicate with the employees and address their concerns; this is only possible with an appropriate system that permits vertical flow of information. Finally, the safety and health of all workers are paramount, and thus they need insurance cover and a suitable working environment and also should be informed of any risks involved in their job (Landin, 2011).

Responsibility in Supply Chain

The supply chain is a broader term that includes both procurement and distribution process in a company (Ravenwood, Muir and Matthews, 2015). The leadership has a responsibility to ensure the smooth and continuous flow of commodities into and out of the business premises (Heenetigala and Lokuwaduge, 2014). The procurement manager is responsible for creating and maintaining the relationship with suppliers who are vital trading partners. In building company, landlords, designers, contractors, and surveyors fall under this category (Testa and D’Amato, 2017). The firm should settle their dues in time and be ethical when dealing with these stakeholders in the market. On the other hand, marketing managers are obligated with maintaining good customer relations (Toprak Karaman, 2017). Clients are crucial players in the business since they dictate the sales volume, revenues and therefore the profitability of the company (Barratt Developments PLC, 2015). Marketing strategies and content must be of high quality and ethical, the business should give factual information concerning their products and this include side effects and take responsibility for any deforming messages (Testa and D’Amato, 2017). Barrat Development PLC has one of their primary priorities as the customers; this implies that, in whatever thing they do, the aim is to satisfy the client’s needs (Barratt Developments PLC, 2015). For this reason, the company works to offer best house designs in the regions, quality, and resilient structures and also constructs them in areas people aspire to live.

Responsibility to the Local Community

The company must work to retain a perfect relationship with the community in which it operates. This player in the building business is in most cases silent but has a significant role to play especially when the organization fails to honor it (Toprak Karaman, 2017). It comprises of the local government, the residents, environment, and civil societies. A construction firm must operate within the laid down regulations and standards, keep a clean environment and pay taxes as per the dictates of the law (Heenetigala and Lokuwaduge, 2014). Furthermore, it has to respect the residents and provide a communication plan for them to air their views concerning its activities. It is also advisable for the company to hire the talents available in the local community (Toprak Karaman, 2017). Barrat Development PLC has ranked among the top ten firms in CSR in the UK, and this is a clear indication of its commitment to the stakeholders.

Advice to the Barrat Development PLC

Despite being ahead in the market coverage and sales volume, Barrat Development PLC still needs to do more regarding responsible management. The human resource department needs to come out and explicitly outline the company’s commitment to facilitating the career development of its employees. Additionally, Barrat Development PLC requires establishing an exceptional corporate culture regarding supply chain management instead of the separate policies that address specific sections (Barratt Developments PLC, 2015). Take, for instance; responsible timber sourcing policy should be merged with the one on procurement to form a single unit. Furthermore, it is advisable for the organization to expand its market throughout Europe and even to other continents with untapped markets. Finally, it is considered possible for Barrat Development PLC to increase the percentage of houses built on brownfield lands from 70% to at least 85%; this will be a good show of environmental consciousness.

Conclusion

From the discussion, it is evident that responsible management is a broad but vital aspect of business leadership. The central concept is the corporate social responsibility CSR that creates not only an excellent public image of the firm but also develops the essential relationship between the organization and the stakeholders. Barrat Development PLC has so far done well on the responsible leadership, and this is evidenced by the continuous growth in the business revenues. However, it should understand that there is still room for improvement thus the need to consider the advice provided by this article for further success.

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