Focus on Quality and CSR
The sacrosanct focus of the business enterprises on the notion of profitability propels them to take the help of decisions and business practices which are not only detrimental for the long-term growth of the enterprise but also from the perspective of the environment. Recent researches have shown that organizations which integrate the theme of making a positive or a substantial contribution towards the improvement of the environment as well as the society hold a much higher chances of gaining sustainability as well as competitive advantage. The focus of the diverse organizations is thus shifting from the making of profit and financial growth solely for the benefit of the organization itself to making a positive impact on the nation and the world at large. It is precisely here that the notion of corporate social responsibility or CSR gains prominence.
Modern world of business is witnessing several changes or emerging trends within its cannon which they need to take into effective consideration for the process of their business operations. For example, earlier it was seen that the organizations depended entirely on superior quality products and aggressive business strategies for the attainment of competitive advantage and also sustainability over their competitors. However, recently this trend has changed in a substantial manner and it is not feasible for the organizations to attain sustainability taking the help of these measures. Experts have stated that the best possible manner through which the various organizations can attain sustainability or competitive advantage by contributing in a progressive manner towards the growth and also the development of the stakeholders who are associated with them. The business operations of the Sri Lankan company Dilmah Tea in this regard hold a mirror to the other organization regarding the manner in which the organizations can attain growth and also sustainability through their focus on quality and CSR.
This report will discuss about the business operations of the company Dilmah Tea from the perspective of their focus of high quality of the tea that they offer to the customers and also CSR values of the organization on the basis of the case study Leading an Ethical Business: Dilmah Tea”. The report also highlights the key issues that the organizations need to take into effective consideration for the management of organizational change and the lessons that other organizations from the effective utilization of the concepts of business ethics and CSR from the business case of Dilmah Tea.
Business Operations of Dilmah Tea
Dilmah Tea, founded in 1988 by Merrill J Fernando, is one of the most recognized tea brands of the world and the official website of the company itself says that the tea offered by it is “The Single Original Tea 100% Pure Ceylon”. The primary focus of the company on the quality as well as the originality of the tea that it offers to the customers not only of Sri Lanka and Australia but also of the other countries of the world has helped it to attain a significant amount of success in the recent times. The lacuna of the organization is to promote as well as market the tea which is cultivated in the nation of Sri Lanka and thereby contribute in a substantial manner towards the growth of the nation through the use of the revenue earned by the company.
In the colonial times, it was seen that large quantities of raw tea were exported from Sri Lanka to the western nations wherein they were tasted and processed to enhance its taste and quality. These companies used to earn a significant amount of profit by hiking the price of the cheap tea that they used to procure from Sri Lanka. This not only hindered the growth of the nation but also robbed the nation of its natural resources as well. Merrill Fernando does establishment the organization with the inherent desire to offer the people of the nation a chance of growth and also a way through which they can utilize the natural resources of their nation in an effective manner. Dilman Tea in the recent times has been able to attain a substantial amount of growth both in terms of customer base and also revenue wise as well. For example, the annual revenue of the organization for the year 2017 was $70.2 million and Dilmah is currently operational in more than 100 different countries. In addition to these, the products offered by the company has also increased in a significant manner in the recent times and the company offers “Ceylon Tea, Flavoured Tea, Green Tea, Speciality Tea, herbal infusions, Masala Chai, Watte Single Estate Tea, White Tea, Real Iced Tea” and others in comparison to the natural tea which Dilmah used to offer only 10 years ago.
The business model of Dilman Tea is completely based on an ethical model wherein it not only tries to provide jobs and financial support to the local cultivators of tea but also try to contribute in a positive manner towards the growth of the nation. For example, it is seen that rather than recruiting expert professionals from the other nations of the work who could have handled the work of the organization in a much effective manner the organization hires local people for their business operations. In addition to this, the organization instead of procuring the raw tea from the wholesalers and the other suppliers procures them directly from the various planters and thereby ensures the fact that these planters not only have a steady job but also a source of income as well. This becomes especially important when the fact that Sri Lanka is a developing nation and the high unemployment rate and the economy of the nation are taken into consideration. Furthermore, the company by placing the entire business operations and just exporting the packaged tea products to the other countries ensures the fact that the national government of Sri Lanka is able to get a substantial amount of tax money from the business profits of the organization and this helps in the process of the development of the nation in a significant manner. Thus, it can be said that the effective utilization of the concepts of business ethics and CSR policies provides wide ranging benefits to both the organization and also the national government of Sri Lanka as well.
Charitable Foundation of Dilmah Tea
A critical debate has ensued in the recent times regarding the topic whether the organizations should focus on the concept of quality or quantity. Recent researches have shown that there are numerous benefits as well as drawbacks associated with the utilization of both the concepts. Organizations need to take into effective consideration not only the key competencies of their organizations, their values, mission, vision and other aspects before they should place their focus on one particular aspect. In this regard, it needs to be said that the focus of the organizations on the aspect of quantity no doubt provides short-term benefits to them however if the quality of the products or the services offered by them to customers is not as per their expectations then it can affect the long-term prospects of the organization in a significant manner. However, the focus of organizations not on the entity of quality seldom offers them short-term benefits but in the long-term they can substantially boost the prospects of the concerned organization which is taking its help. This helps the customers to not only earn the satisfaction but also the loyalty of the customers and thereby helps in the process of their growth. This aspect of the business world becomes more pertinent when the success attained by Dilmah Tea through its focus on the entity of quality is taken into effective consideration. For example, not only Merrill Fernando but also his two sons who are managing Dilmah Tea currently are focusing on the aspect of quality of the tea related products that they offer to the customers.
In addition to the above mentioned contributions that the organization has made towards the growth of the nation of Sri Lanka, the organization also has a charitable trust which is called by the name of MJF Charitable Foundation. It is pertinent to note that almost 10% of the total profit of the organization goes to this charitable trust which aspires to not only provide support to the impoverished people of Sri Lanka but also to improve the quality of their life as well. The foundation offers wide ranging support services to the people like children, poor people, elderly and the other stakeholders of the organization. The “six pillars” of corporate values of the organization, namely, integrity, quality, tradition, ethics, customers and sustainability applies to the working of this foundation of Dilmah Tea as well. The foundation of this trust was undertaken by Fernando on the basis of the concepts of “ethical trading” and “fair trade”. Fernando himself said that “Unlike the other large companies who create wealth that goes straight into shareholders’ pockets, Dilmah creates wealth that is given back to the people of Sri Lanka”. Thus, it can be said that the desire of the organization to share the profit earned by it with the stakeholders has made a positive contribution towards the development of the nation of Sri Lanka.
Importance of Ethics in Business Operations
The fast changing dynamics of the business world has made it imperative for them to integrate various kinds of innovations and other kinds of strategies or policies within their framework so as to offer itself a better chance of attaining success. Recent researches suggest that organizations not only take the help of the process of change management for the improvement of the processes of their business but also for the attainment of sustainability as well. However, there are various factors like the competencies of the organization, the requirements of the industry in which they are operational and also of the customers, the perspective of the employees and others that the organizations need to take into effective consideration for this process. Thus, it can be said that the success or the failure of the various changes that the organizations integrate within their framework depends to a large extent on the conglomeration of all these factors. A close analysis of the case study “Leading an Ethical Business: Dilmah Tea” is likely to highlight some of the factors that organizations need to take into effective for the use of the process of change management.
The case study clearly highlights the importance of the use of ethics in the business operations of an organization. This is perhaps one of the most important insights that an individual or an organization can get from the case study under discussion here. It is pertinent to note that Dilmah for the process of their business operations over the years has followed the concepts of business ethics and at the same time tried to contribute in a substantial manner towards the nation in which they are operational. This can be seen as an initiative on the part of the organization to help in the growth of the nation which provides it the raw materials that are indispensible for the process of their business. The other organizations which are either planning to undertake an organizational change or actually undergoing can take into effective consideration the concept of business ethics for the same. For example, if the change that an organization is underpinned by the concept of ethics or is directed towards making the business operations of the concerned organization more ethical then it is likely that the organization would find it much more easier to manage the change. More importantly, it is seen that these kinds of changes are not only readily accepted by the employees but at the same time the resistance that the management team receives for the integration of these kinds of changes is comparatively less.
Lessons on Change Management
Another important concept that the business enterprises needs to take into effective consideration for the management of the change which they are integrating within their framework is the concept of CSR. Contemporary business enterprises need to take onus not only for their business actions and also for the manner in which the products or the services offered by them affects the customers. In addition to these, “Effective CSR policies are very crucial as employees have different values and beliefs when change management occurs so CSR policies can help the employees to understand the organization culture”. Thus, it can be said that the factor of CSR is an important one which the organizations needs to take into effective consideration for the management of the various changes that they integrate within their framework. Moreover, it is seen that the socially responsible view the problems or the issues that they are facing not only from the perspective of profitability or the growth of the organization rather these problems are being viewed by them through the perspective of the stakeholders, environment, society and others. The changes that are being implemented by them are the ones which tries to not only resolve the issues that it is facing currently but also the likely impact of these issues on the stakeholders, society, planet and others. The inherent or the basic desire for these kinds of changes is totally different from the ones which are undertaken to just improve the prospects of the business or its profitability. The net result of this is the fact that these organizations not only receive a lesser amount of resistance from the employees during the implementation of these changes but at the same time these changes are much easier to implement. These in short are some of the key lessons that the organizations can learn from the business operations of Dilmah Tea for the effective management of change.
The success attained by the organization Dilmah Tea clearly indicates that the benefits of the effective utilization of the concepts of quality, business ethics and CSR policies. For example, the business operations of the organization are not only “enwrapped in Sri Lanka’s complex culture and history” but at the same time promote the culture as well as the history of the nation in the most effective manner. This is something that the organizations related to the organizations related to the other industry like finance, media and others can follow for the process of their business operations. In this regard, it can be said that the focus of these organizations on the aspect of quality is not only like to help them to reap long-term benefits through earning the satisfaction as well as the loyalty of the customers but would also help them in the process of their growth as well. Likewise, the focus of these organizations on the concepts of business ethics and CSR policies is likely to help these organizations to not only take the onus for their actions but would also help them to improve their market or brand image in a substantial manner. This is important from the viewpoint that the customers or the end-users of the products or the services of the contemporary times are much conscious about the image of the enterprises whose products or services that they are opting for.
The net result of this is the fact that the contemporary organizations often indulge in mitigation of various kinds of issues or problems which are of great significance. In addition to this, the construct of digital marketing also helps the organizations to improve their brand image in a significant manner. Another important manner through which the brand image of the organizations can be enhanced is the use of charity and charitable actions and also contributing towards the growth of the nation in which these organizations are operational. The case study under analysis here clearly reveals this mechanism of the attainment of sustainability. Furthermore, making meaningful contributions towards the societal, environmental and economic growth of the nations is also likely to help these organizations in a substantial manner. Thus, I and my group members are of the viewpoint that the concepts of ethics and CSR that the organization Dilmah Tea used for the process of its growth and the attainment of sustainability are feasible for the other organizations related to the other industries as well.
The practices as well as the policies followed by the organizations Dilmah Tea for the process of their business can be effectively followed by the other organizations for the process of their business operations. However, this is likely to require these organizations to follow or take the help of various measures. Firstly, these organizations need to take into effective consideration the concept of business ethics within the spectrum of their business. These organizations would need to reconsider the vision, mission, corporate values and other aspects of their business and align them with the concept of business ethics. Secondly, the effective utilization of the construct of CSR is also likely to help these organizations in a significant manner. For example, these organizations need to effectively try to resolve the issues that the nations in which they are operational face and also help in the process of their growth. In addition to this, rather than relying on foreign help for the enhancement of the efficiency of their business operations these organizations can enhance their future prospects.
Conclusion
To conclude, the concepts of business ethics as well as CSR have emerged as one of the most important ones within the framework of the contemporary business world and it is seen that the diverse organizations are increasingly turning towards the use of these concepts for the process of their business. Furthermore, the effective utilization of these concepts not only offers the opportunity to these organizations to improve their brand or market image but at the same time helps them in the process of attainment of sustainability as well. The case study of Dilmah Tea clearly indicates the manner in which the various organizations can utilize these concepts within the process of business operations and attain sustainability. In addition to these, it is also seen that the utilization of these concepts also enables these organizations in a much effective manner in the process of change management by reducing the amount of resistance that the organizations face from the employees. However, the effective utilization of these factors requires the organizations to take into consideration various factors like the growth of the nation in terms of society, environment and other factors. Furthermore, the organizations can also offer labor and employment to the native people of the nation in which they are operational. This is likely to not only help the organization to have long-term benefits but also contribute to the cause of the national development in a much effective manner. In addition to these, as the case study under discussion here shows the various contemporary organizations can improve their long-term business prospects in an effective manner through the focus on the concept of quality rather than on quantity.
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