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Corporate Social Responsibility (CSR) at AstraZeneca Essay

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Updated: Jan 23rd, 2020

Introduction

This paper discusses the concept of corporate social responsibility using AstraZeneca Plc. as the case study. Specifically, the paper analyses AstraZeneca’s employees who are part of the company’s stakeholders.

This analysis is based on the safety, health, and environment (SHE) program which the company considers as a major component of the corporate social responsibility (Turner 2005, p. 38). The data in this report has been obtained from members responsible for promoting Corporate Social Responsibility (CSR) in AstraZeneca and also from previous articles and books on corporate social responsibility.

Company Background

AstraZeneca Plc. was established in 1999 after the merger between Zeneca Group Plc and Astra AB. The corporate headquarters of the company are in the United Kingdom. AstraZeneca Plc was formed with the aim of generating long term growth and value to all the shareholders using the strength from two companies.

Currently, AstraZeneca Plc is among the leading combined pharmaceutical companies. AstraZeneca has a strong emphasis on both innovation and research, and on commercial and manufacturing activities. AstraZeneca Plc. produces medicines for treating different ailments such as cancer, infections, pain control, gastrointestinal, and other ailments that affect the central nervous system.

The company’s operations are spread in more than one hundred countries while the manufacturing process takes place in twenty countries. Presently, AstraZeneca Plc employs close to 54000 workers globally (Turner 2005, p. 38).

Describing Corporate Social Responsibility

AstraZeneca Plc defines corporate social responsibility as the efforts and initiatives undertaken by a company in order to facilitate sustainable development. The company takes sustainable development as the ability of a given economic activity to meet the requirements of both the present and future generation.

Currently, the company has put in place a lot of effort to improve its corporate social responsibility framework and in order to establish an appropriate technique for implementing and controlling the effectiveness of CSR. This is an indication that the structure for managing corporate responsibility issues has not yet been developed.

As a result, much of the work or activities of the company are based on the safety measures that were adopted sometimes back. However, the newly established safety, health, and environment (SHE) program is considered as a major component of the corporate responsibility that the company expects to launch. The program mostly targets the employees of the company who are part of the stakeholders.

The executives of the company believe that such a program will go a long way in promoting shareholders’ interests. This is in line with stakeholder theorists who assert that the executives of a given company should ensure that shareholders’ interests are promoted. This should also be done to other groups that may be affected by the activities of the company.

The social approach demands that all corporation responsibilities be directed towards the company stakeholders and also ensure the safety and health of the general public (Boeger, Murray & Villiers 2008, p. 187). According to Pride & Ferrell (2012, p.96), the various aspects of corporate social responsibility include the environment, social, and economic responsibilities.

These responsibilities usually act as the building blocks of the overall corporate responsibility of an organization. In some instances, the environmental sustainability largely focuses on the impact caused by people on the environment. On the other hand, social sustainability incorporates a wide range of issues that concern or affect the society as a whole.

It is against this backdrop that AstraZeneca has found it important to put into consideration all the company stakeholders such as the employees, members of the community and other shareholders. The concept of corporate responsibility of the company includes various activities like the working conditions of employees, issues that relate to the environment, responsibility on the products of the company, marketing, and other related activities that provide support to the community.

Since AstraZeneca Plc operates within the pharmaceutical industry, it considers activities such as animal testing and provision of medical supplies to be of extreme importance in its business portfolio. According to Trevinno & Nelson (2011, p. 371), the supply of medical products has mainly benefitted the underprivileged population in the developing countries.

In an effort to develop an extensive and a worldwide corporate responsibility, AstraZeneca has developed its policies in such a way that it is quite easy for the companies to comply with both the national and international rules, and also maintain the expected levels of health and security. It is important to note that the company has embarked on various measures that can offer positive contribution to the surrounding community.

For instance, sponsorship and charity contributions are some of the philanthropic activities that the company has made positive impacts. There are also other initiatives that relate to the operational goals of the company that tend to improve the overall quality of life of the people.

In addition, management of some of these activities is carried out from the company’s headquarters. However, some of the activities are conducted locally. In addition, the company has managed to contribute especially within the education sector in an attempt to increase people’s awareness on the importance of observing good health to avert health related problems.

AstraZeneca’s corporate social responsibility on environmental activities focuses on addressing issues such as climate change, hazardous waste emission and disposal, and depletion of ozone layer as well as water resources. Creation of an environmental program has made it quite easy for AstraZeneca Plc to realize continuous improvements on issues that relate to the environment.

Integrating corporate social responsibility

The integration of corporate social responsibility within the company starts with the leaders. For instance, the chief executive officer of the company is actively involved in all the activities that revolve around corporate responsibility. In addition, the reporting system of AstraZeneca is framed in such a way that it allows the head of the corporate social responsibility to report directly to the chief executive officer.

On the same note, the C.E.O. provides the necessary assistance to the head of corporate social responsibility especially when it is vital to approve new strategies and policies. In terms of the corporate mission and culture, AstraZeneca lacks a defined mission statement but believes that being among the leading pharmaceutical companies, its activities are focused in a bid to help the company in providing effective and innovative medicinal products in all the vital areas within the health sector.

The company’s organization of corporate responsibility is not fully managed though some practices and structures are being incorporated. Moreover, there is no formal CSR structure in the company because the organization uses a global committee and separate corporations to carry out corporate responsibility.

The code of conduct of the company helps the company to increase its commitment in various activities (Deck 2002, p. 39). As a result, the company is able to earn confidence and trust by maintaining the acceptable levels of ethical standards in different situations.

Considering the fact that the code of conduct is based on care, honesty, integrity, and diligence, it is effective for the code to cover variety of issues like business practices, political contributions, delegated authorities, equal opportunities, insider information, and group policies.

Apart from relying on the code of conduct, AstraZeneca uses additional key principles and policies which include Global Human Resource Policy, Corporate Social Responsibility Policy, Bioethics Policy and SHE Policy (Cramer & Bergmans 2003, p. 19).

Monitoring corporate social responsibly

At present, AstraZeneca lacks an effective mechanism for measuring, evaluating, and reporting corporate responsibility activities. However, the company finds it vital to avoid using measurement, evaluation and reporting systems that are associated with heavy bureaucracies (Baines, Fill & Page 2012, p. 49).

In order to achieve the latter, AstraZeneca is currently striving to develop slim and efficient systems that do not cause any suffocation to the existing enthusiasm. In addition, the company believes that it is necessary to develop appropriate systems that can be used to measure various aspects and at the same time help to identify the aspects that are reasonable to measure (Grayson & Hodges 2004, p. 152).

Criticisms of the AstraZeneca’s performance

The current criticisms facing AstraZeneca are mainly as a result of the declining sales of its products. The company has also suffered a major challenge of failing to diversify in other areas to help increase the volume of sales. AstraZeneca has instead continued to focus only on prescription drugs (Burke & Cooper 2009, p. 7).

On the contrary, AstraZeneca’s competitors (such as GlaxoSmithKline) have managed to diversify into different areas o production such as consumer health, generics and vaccines. This has enabled such companies to gain a superb competitive advantage over AstraZeneca (Hancock 2005, p. 255).

Conclusion

In recap, it is evident that AstraZeneca Plc. has to a great extent, incorporated the concept of corporate social responsibility. The company has managed to address the needs of its employees in various ways. For example, the company has appreciated the value of employees as part of stakeholders of the company by introducing a safety, health and environment program known as the “SHE Program”.

The program targets all the employees of the company as well as other members of the public who might be impacted by the activities of the company in one way or another. AstraZeneca has also integrated CSR effectively to an extent that even the leaders of company are actively involved in all the activities that relate to corporate responsibility.

However, it is worth to mention that AstraZeneca lacks an effective system of monitoring the CSR activities. This means that the company is experiencing a lot of problems especially in identifying various aspects that need to be measured. In addition, AstraZeneca continues to face increased criticisms because of its current performance whereby the sales are recording a declining trend (Trevinno & Nelson 2011, p.54).

The company has equally failed to diversify its activities and instead remained in a limited area of focus. This has occurred at a time when its competitors are doing considerably well because of their ability to diversify activities. This has consequently helped such companies to generate more sales and increase their competitive power.

Recommendations

In my view, it is evident that there is dire need for AstraZeneca to develop an effective system of monitoring its corporate social responsibility activities. Since the company lacks a well defined mission statement, it is important to come with an appropriate long term mission aimed at narrowing the gap between its mainstream operations and CSR.

In order to improve its performance, AstraZeneca should try to diversify in different areas such as the production of vaccines and genetics. This will go a long way in minimizing the current competition being faced by the company.

References

Baines, P., Fill, C., & Page, K 2012, Essentials of marketing, Oxford University Press, Oxford.

Boeger, N., Murray, R., & Villiers, C 2008, Perspectives on corporate social responsibility, Edward Elgar. Cheltenham, Glos, UK.

Burke, R. J., & Cooper, C L 2009, Research companion to corruption in organizations., Edward Elgar, Cheltenham.

Cramer, J., & Bergmans, F 2003, Learning about corporate social responsibility the Dutch experience, IOS Press, Amsterdam.

Deck, MC 2002, “Corporate Codes and Ethics Programs”. Perspectives in Business Ethics vol. 3 no. 1, pp. 22-39.

Grayson, D., & Hodges, A 2004, Corporate social opportunity!: 7 steps to make corporate social responsibility work for your business, Greenleaf Publications, Sheffield.

Hancock, J 2005, Investing in corporate social responsibility: a guide to best practice, business planning & the UK’s leading companies, Kogan Page, London.

Pride, W. M., & Ferrell, OC 2012, Marketing, Ohio, South-Western Cengage Learning, Mason.

Trevinno, L. K., & Nelson, K.A 2011, Managing business ethics: straight talk about how to do it right, John Wiley, New York.

Turner, T N 2005, Vault guide to the top pharmaceuticals and biotech employers, Vault Inc., New York.

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