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Managing Corporate Reputation (563) June 2016

Membership No: 40001949

Charted Postgraduate Diploma in


Marketing (Level 7)
563 - Managing Corporate Reputation (June 2016)

Membership No: 40001949

563 - Managing Corporate Reputation (June 2016)


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Managing Corporate Reputation (563) June 2016

Membership No: 40001949

CANDIDATE DECLARATION

CIM Membership Number:

40001949

Module Title:

Managing Corporate Reputation (MCR)

Level:7

Chartered Postgraduate diploma in Marketing

Accredited Study Centre:

Next School Of Business (PVT) Ltd

Candidate Declaration:
I confirm that I have applied, to all tasks, the CIM policies relating to (please tick relevant boxes to
confirm):

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This assignment/project is the result of my own independent work/investigation except where
otherwise stated. All other sources are referenced and a bibliography is appended.
The work submitted has not been previously accepted in substance for any other award and has been
submitted in accordance with the set template requirements. I further confirm that I have not shared
my work with other candidates.

Tick to confirm

I hereby give consent for this assignment/project, if accepted, to be used by CIM for the dissemination
of best practice and, or, other appropriate purposes, on the understanding that the
assignment/project is anonymised.

Tick here to opt out

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Membership No: 40001949

RELATION TO THE ORGANIZATION


The author of this report is the Marketing Manager of Shin Nippon Lanka (Pvt) Ltd and
submitting this report to CEO Mr. Okano, based on the investigations on internal and
external environment to Shin Nippon Lanka (Pvt) Ltd.

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Membership No: 40001949

ACKNOWLEDGEMENTS
I am truly indebted to MCR module tutors for the outstanding guidance, encouragement, and
support, throughout the course of this work.
I will very much appreciate the course modules offered under the CIM and it helped me in
many ways to develop my marketing knowledge to direct my carrier beyond the practicing
profession for the time being.
Also, I acknowledge all the marketing teaches of whom I got the references in order to
complete this report and they helped me in understanding the relevant models and theories
related the subject models covered under this report.

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Membership No: 40001949

TABLE OF CONTENTS
Candidate Declaration. 02
Relation to Organization. 03
Acknowledgements. 04
Table of content 05
List of Figures . 06
List of Tables 07
List of abbreviations 08
1.

Building Reputation Insurance Using Issue Management ..

09

Executive Summary 10
1.1

Building Reputation insurance using Proactive Issue Management 11


1.1.1 Importance of Corporate Reputation. 11
1.1.2 Importance of Proactive Issue Management 11
1.1.3 Building Reputation Insurance via Proactive Issue Management.....12

1.2
1.3
1.4

Internal Investigation of SNK 14


External Investigation via Stakeholder Mapping.. 18
Recommendation for Proactive Issue Management Strategy.. 21
1.4.1 Recommendation 1- Appoint an Issue Management Team.. 21
1.4.2 Recommendation 2- Create a Listening Culture.. 13
1.4.3 Recommendation 3- Build Corporate Communication Strategy 24
1.4.4 Recommendation 4- Establish an Issue Management Process.. 25
1.4.5 Political Consequences.. 26
1.4.6 Financial Consequences.. 27

2.

Ethical Corporate Social Responsibility as a Corporate Reputation......28


Executive Summary 29
2.1
2.2
2.3
2.4

Ethical CSR Practices as a Corporate Reputation... 30


Organizations Current Position of CSR Activities 31
Identity of Organization Based on Current CSR Activities.. 33
Recommendation for Corporate Social Responsibility Strategy.. 35
2.4.1 Recommendation 1- Conduct CSR Awareness Program for staff.. 35
2.4.2 Recommendation 2- Establish CSR Communication Process.. 35
2.4.3 Recommendation 3-Introduce Visual Identity to CSR.. 36
2.4.4 Political Consequences Analysis.. 36
2.4.5 Cost Benefit Analysis.. 37

References .. 38
Appendix A:
Appendix B:
Appendix C:
Appendix D:

Company background.. 40
Stakeholder Map 42
Corporate Communication Audit 43
Company Policies. 45

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LIST OF FIGURES
Page
Figure 01:

Corporate reputation model Fombrum (1996,p6)...11

Figure 02:

Issue Life Cycle....12

Figure 03:

Benefits and disadvantages of implementing an issue management.13


process

Figure 04:

Simplified Organizational Structure......14

Figure 05:

Impact of issues of organizational structure to CR.15

Figure 06:

Cultural impact of SNK16

Figure 07:

Key Stakeholders of SNK...17

Figure 08:

Current & Expected Impact Level of SHs to SNK CR19

Figure 09:

Cross functional Issue Management Team..20

Figure 10:

Appoint an Issue Management Team.......22

Figure 11:

Establishment of an Issue Management Process..........22

Figure 12:

Current Control System of SNK.23

Figure 13:

Proposed Diversified Control System of SNK..23

Figure 14:

Press release in Daily FT....24

Figure 15:

Corporate Social Responsibility (CSR) ....25

Figure 16:

Kotters change management process.....26

Figure 17:

SH Map for SNK...30

Figure 18:

SNK Outdated web site...32

Figure 19:

Identity Matrix...33

Figure 20:

Conversion of corporate policies to CSR to communicate among..35


Stakeholders

Figure 21:

Proposed Visual Identity for SNK CSR.36

Figure 22:

SH Map for SNK...42

Figure 23:

SNK Outdated web site...44

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LIST OF TABLES
Page

Table 1

Instances where SNK faced issues due to the current structure. 15

Table 2

The culture of SNK based on cultural web presentation 16

Table 3

Corporate Communication Gaps 17

Table 4

The necessity of IM process to SNK 18

Table 5

Stakeholders of SNK .. 19

Table 6

Objectives of recommendations..

Table 7

Short term and long-term recommendations 21

Table 8

Kotters Change Management on IM Strategies. 26

Table 9

Cost Benefit Analysis for IM Process Strategy.

Table 10

Impact of CSR on Corporate Reputation 31

Table 11

Grading for Types of CSR Activities in SNK 32

Table 12

Symbols towards current CSR activities of SNK..

Table 13

Effect on Corporate Behavior and Communication on CSR . 34

Table 14

Objectives of recommendations for CSR strategy

Table 15

Political Consequences of CSR process strategy

Table 16

Cost Benefit Analysis on CSR Strategy.. 37

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21

27

33

.. 35
36

Managing Corporate Reputation (563) June 2016

LIST OF ABBREVIATIONS

IM

Issue Management

CR

Corporate Reputation

CSR

Corporate Social Responsibility

MEP

Mechanical, Electrical & Plumbing

IESL

Institution of Engineers Sri Lanka

SNK

Shin Nippon Lanka (Pvt) Ltd

GM

General Manager

SHs

Stakeholders

PC

Personal Computer

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Membership No: 40001949

BUILDING REPUTATION INSURANCE


USING PROACTIVE ISSUE
MANAGEMENT

Task 1: 2790 Words


(Excluding Executive Summary)

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Executive Summary
The corporate reputation is an asset to an organization which the organization has been
rewarded as a result of hard work they have done for many years. It is always prone to
damage due to the controllable and uncontrollable factors it comes across in its journey.
Having a good image, identity and communication, the organization can still safeguard its
reputation without getting damaged to it. So, sometimes, having a good reputation with its
stakeholders will finally result in an insurance to the organization which will grant
compensation in a situation where a crisis occurs.
To observe the internal environment of SNK, the organizational structure, organizational
culture and communication audit are conducted and hence it was identified that the company
is having lack of centralized information gathering system and a risk management team to
monitor the issues, lack of employee listening culture and lack of external and internal
corporate communication system respectively.
Therefore, a short-term plan is proposed initially to appoint a cross functional team in each
department with the current employees involvement and as a long-term plan, appoint an
issue management team. Moreover, the organizational culture is revamped by educating the
top management, middle management and the operational level in order them to adapt to
the new environment. Also, the inactive corporate communication is to be activated by
adopting different CR medium.
In parallel, external analysis will be conducted to analyze the impact of issues on potential
stakeholders of SNK. With current practices of the issue management process undergoing
by the company, finally it will be prescribed the remedial actions to be followed to build up a
better Issue management process to defend the organizations reputation by providing a
financial proposal too.

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1.1 Building Reputation Insurance using Proactive Issue Management


1.1.1

Importance of Corporate Reputation (CR)

The corporate reputation is the identity and the image which the stakeholders will perceive
about the organization. According to the Fombrum (1996, p9) the CR is the estimation of the
organization identity and also how the stakeholders perceive the companys name.
Corporate Reputation

How Stakeholders
perceive the organization
How organization perceives
and presents itself
Symbolism

Corporate Image

Corporate Identity

Communication

Behavior

Corporate Mission
Figure 01: Corporate reputation model Fombrum (1996,p6)
According to Fombrun & van Riel (2004), a positive reputation is a key source of
uniqueness, which can differentiate the organization from its competitors to attract potential
stakeholders. The negative reputation will erode the organization reputation by making loss
of its key potential stakeholders.
For instance, Amazon, Apple, Disney, Google and Jonson & Jonson (Micheal at el,2013) are
ranked as the most reputed companies in the world based on the good interaction they had
with its key stakeholders and the uniqueness offered.
As of river pollution from diesel, with Coca-Cola Company in Sri Lanka (Hafsa Sabry, 2015),
higher lead level in Maggie Noodles in India (NIRMALA GEORGE, 2015), Chilled Labor with
Apple and bad emissions with Volkswagen, it can be seen that the reputation is prone to
damage. Thus, CR plays an important role for an organization.
1.1.2

Importance of Establishing a Proactive Issue Management (IM)

It is a process of monitoring potential controversies or public relations problems in relation to


the business, and initiating communication programs to manage public perceptions about
them.
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According to Van Riel and Fombrun (2007), IM comprises of three principle activities. In
relation to this model Mitroff (1988) adds a fourth activity as the learning from experience. In
contrast to the above models, Jones & Chase (1979) suggest the IM process model with four
basic phases and also Regester and Larken (2008) recommends a seven step practical
implementation model.
In relation to Van Riel and Fombran (2007) issue management model and Mitroff model, it
appears to be both models are addressing the common structure by being in a common
platform. When, the Jones and Chase (1979) model is taken into consideration, it also
appears to be following the same structure as of the above two models with the addition of
issue prioritization process.

Figure 02: Issue Life Cycle


According to the Hainsworth & Mengissues issue life cycle, the issue may undergo several
stages where the worst case scenario would be a crisis. So, having a proactive issue
management process within an organization can eliminate the reputational risks which will
damage the reputation.
1.1.3

Building Reputation Insurance via Proactive Issue Management

For instance, IBMs (Special Report, 2013) reputation for being an enterprise friendly and
efficient solutions provider has enabled it to beat rivals for business over many years.
Similarly, McDonalds (Special Report, 2013.) reputation for being a family friendly and
economical place to eat has sustained its market share.

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But, reputation can be a fragile and intangible thing. Toyota Camry & Avalon (TORRANCE
Calif, 2016), who became the largest automobile manufacturer, has suffered grievously as
allegations of faulty activation of air bags due to the incorrect calibration.
Likewise Dell (Geoff Livingston n.d.), who became the leading PC manufacturer has suffered
reverses in recent years owing to incidents of laptop batteries catching fire. Nevertheless,
since, Toyota and Dell are well reputed companies, they self-insured from the higher
reputation they owes.
According to the aforementioned instances, an issue can be arisen from internal or external
environment. Also, the issue seems controllable and uncontrollable with respect to the
dynamics of it.
External

Controllable

Internal

Uncontrollable

Issue

Benefits
1. Act as an early warning system
2. Act as an insurance for CR
3. To safeguard internal & external SHs
4. To identify potential crisis
5. To identify threats to the organization
6. Act as a risk mitigation method
7. Less chance of collapse its
businesses

Disadvantages
1. It is costly
2. It requires a team
3. Reluctant to change
management

Figure 03: Benefits and disadvantages of implementing a proactive issue management


process
According to the benefits and disadvantages of implementing an IM process, it can be
observed that the benefits are higher than the disadvantages having proactive IM process. It
is, therefore, vital for every organization to pay their attention on safeguarding the corporate
reputation by proactive issue management.

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1.2 Internal Investigation of SNK


With the use of organization structure, organization culture and corporate communication
audit, an internal audit for SNK was conducted and hence drawbacks of current issue
management strategy was identified as follows,

Ineffective Issue Management Structure


Ineffective Organizational Culture
Lack of Corporate Communication Strategies
Unavailability of Issue Management Process

1.2.1

Ineffective Issue Management Structure

Shin Nippon Lanka (Pvt) Ltd

Board of Directors / CEO

Business & Engineering

General Affairs

Administration

Account
s
Figure 04: Simplified Organizational Structure

Figure 04 depicts that SNK is having an organizational structure divided into several
functional teams and the employees, in each department, are merely communicating their
issues with the head of department independently in decentralized manner. Since, SNK has
no proper IM system; they handle those issues within the department in ad-hoc manner.
Thus, the ultimate reports related to potential issues are not communicated with CEO.

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Table 01: Instances where SNK faced issues due to current structure
No
IS1

IS2

IS3

IS4

Issues
Lack

of

Example

coordination

Reason

Mechanical departments decisions are not

among functional units

coordinated with electrical department.

Discontinuities among

Engineering

departments

departments

Bypassed access level


to employees
No

distinctive

Operational
instruction

and

administration

description is defined.

Each department has its own


KPIs to achieve their own
targets.

staff
from

are

received

GM

bypassing

direct

Managements

lack

of

the

understanding

about

the

employees immediate reporting level


Job

No cross functional teams

The employees are having complains about


what they have to perform in their duties.

consequences.
No distinctive KPIs defined

IS1
5
4

Impact on CR

3
2
1
IS4

IS2

IS3

Figure 05: Impact of issues of organizational structure to CR


1.2.2

Ineffective Organizational Culture

Corporate culture defines the system of shared assumptions, values, beliefs and behaviors
that determine how a companys employees and management behaves in organization and
how they interact and handle outside business transactions. Therefore, to understand the
culture of SNK, the cultural web (Johnson, G, Scholes, K, Whittington, R Exploring
Corporate Strategy, 8th Edition, FT Prentice Hall, Essex, 2008, ISBN 978-0-273-71192-6) is
used.

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Table 02: The culture of SNK based on cultural web presentation


Item

Attribute

Potential Issues / strengths

Impact on Reputation

The Pioneer of Building Air Conditioning

MEP market leader in Sri Lanka

system in Sri Lanka.


1

Stories

High employee turnover

Create Bad image on SH minds

Low employee wages

Employee dissatisfaction and


loss of loyalty

Symbols
Power

Stressful working environment

Bad Image on employees mind

A Japan originated international company.

MEP market leader in Sri Lanka

The

Sri Lankan management is not

maker

is

Japanese

Management.

Structure

Control

Decision

empowered.

Bad image on

external SHs mind.

Cost are highly controlled

Dissatisfaction of employees

Quality is highly emphasized

Added value on Reputation

Working time is highly monitored and

Create stressful environment

Systems

controlled.

and hence dissatisfaction

Rewarding procedure is not transparent

Lack of trustworthiness about


the management

Rituals &
Routings

The employees are reluctant to adapt to a

change

Difficulties

in

change

management process

Management is reluctant to change the


decisions made

Organization
Structure

organizational

Single point reporting

Operational staff still have the access to

Controls of the employees will

Functional

authority

structure

the Board of Directors and Managers

Stories
5
4
3
2
1
0

Structure

Rituals

be lost.

Cultural Impact

Power
Structure

Control
System

Figure 06: Cultural impact of SNK

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1.2.3

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Lack of Internal Corporate Communication Strategies

Franklin states, the corporate communication as the ways in which an organization talks to
itself and to the outside world.

In order to build good reputation, SNK has to have a

distinctive corporate communication image among its stakeholders. This will share the
information back and forth to have a good connection with each other.
Table 03: Corporate Communication Gaps
Item

IS1

IS2

Potential Issues
Not

Reason

connected with Media and

Impact on Reputation

Poor Management

Press

direction

Weak lateral communication

Unavailability of a

across departments

process

IS3

the web site is not updated.

can be highly influenced

The

feedback

customers

can

to
have

No functional team

updated

with

latest

news of SNK. External

SHs feel bad perception


Systems arent

Poor

employees feedback

available.

employees

relation

with

Impact Level on CR

4.5
4
3.5
3
2.5
2
1.5
1
0.5
0
IS1

Employees will not be

No processes to collect

mistakes

(Refer Appendix D)
IS4

In a crisis, the company

with bad criticism.

SNK does not process in-house


Magazines, newsletters and even

Impact Level

IS2

IS3

IS4

Figure 07: Corporate Internal Communication impact level on CR

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1.2.4

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Unavailability of Issue Management Process

According to Appendix D, integrated communication, it can be seen that SNK has no proper
process for issue management, thus, in a situation where an issue takes place within the
organization, there is a risk of transferring an issue to a crisis, if not properly managed.
Table 04: The necessity of IM process to SNK
Item

Requirement

Reason

Act as an early warning system

To identify potential issues

To safeguard the CR

If properly managed, the reputation can be protected.

To safeguard internal & external SHs

To identify potential crisis

To identify threats to the organization

If monitored, potential threats can be identified.

Act as a risk mitigation method

If identified, risks can be evaluated and mitigated.

If monitored and controlled, the SHs can be protected


without affecting any harm to them.
Potential issues which can be transferred to crisis can
be identified.

1.3 External Investigation via Stakeholder Mapping


According to Huczinski & Buchanan (2001), the stakeholders are anyone who will be directly
or indirectly affected by organizational changes. SHs are the key figures of corporate
reputation. When the customers get the reliability & consistency through quality, investors
gain the creditability through product, the community gets strong orientation to services &
values through responsibility of the organization, the organization can earn stakeholders
trust and hence the corporate reputation can be gained. Thus, it is very important SNK to
identify its key stakeholders and provide best services to them and hence referring to the
Appendix B, the key external SHs can be filtered as follows.

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Suppliers
Current employees,
retirees

Government
Public Authorities,
regulators, Policy
Makers

Competitors

Press / Media

Community

Local and
International Media

Schools,
University

Customers

Society

Direct & indirect


customers

Labor Unions

Professional Bodies
Investors,
shareholders

Figure 08: Key Stakeholders of SNK


Table 05: Stakeholders of SNK
No

Stakeholder

Type

Impact Level

Connection with SH or Issues

on CR

Competition between suppliers for the same

High

High

product or service
SH1

Suppliers

Connected

They offer their inquiry, but less chance to get


the job

SH2

SH3

Customers

Competitors

Connected

Connected

Complains that SNK does not give feedback

High

Complains that feedback from SNK is poor

High

Competitors seek the chance to hire the

Medium

High

employees who are working in SNK

More

competitors

are

coming

to

MEP

businesses
SH4

Government

External

SNK has no direct involvement, but indirectly


connected with government bodies.

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High

Managing Corporate Reputation (563) June 2016

External

SH5

Press/Media

SH6

Local Community

Membership No: 40001949

SNK has no direct involvement with Press or


Media

External

Not connected with local communities

External

Institute of Engineer of Sri Lanka has


recognized SNK as training place for young
engineers

SH7

to

train

for

the

High

Low

Medium

Corporate

Membership. So, they are on the alert about

Professional bodies

SNK.

University students are provided training for


their internship. So, they are on the alert

High

Low

about SNK.
SH8

Society

External

SNK is not connected with Society.

According to the stakeholder mapping, it is identified that the dominant SHs for the company
and hence explained each SH potential impact on corporate reputation. Hence it can be
observed that SNK is not having proper communication with its SHs and also it is not
providing any feedback to its SHs regarding their business activities status which can be an
issue to organization. Also, SNK is not monitoring what are the perceptions of SHs for the
product and services performed.
Suppliers
5
Soceity

Customers

3
2
1
Prof. Bodies

Competitors

Local Com.

Current
Expected

Government
Press/Media

Figure 09: Current & Expected Impact Level of SHs to SNK CR

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1.4 Recommendation for Proactive Issue Management Strategy


There are internal and external controllable and controllable issues which can cause
damaging the corporate reputation of SNK. So, as of the investigations conducted on
internal and external environment, following recommendations can be proposed.
Table 06: Objectives of recommendations
No

Objectives
To establish an Issue Management Team to SNK by 2018

To build a cross functional team to the current context


To establish an Issue Management Process

To restructure the organization structure to build a listening culture

To build a process for internal communication

To build a process for external communication

1.4.1

Recommendation 01: Appoint an Issue Management Team

Since, CEO has to have a holistic veiw of the potential issues within and external of the
organization, it can be proposed below mentioned long-term and short-term strategic plans.
Table 07: Short term and long-term recommendations
Type
Description
Short-term Plan

Building a cross functional team among all the departments

Long-term Plan

Appoint an issue management officer and a supportive team

Short-term Strategic Plan


With the available human resources, in short-term basis, SNK can appoint a one employee
from each department to gather potential issues and record them. Also, to get each of them
know about the issues, an email group can be created and each of them has given the
authority of accessing and sharing facility within the group. So, whenever, an issue comes
across, it can be circulated amongst by coping to CEO and head of the department.
Therefore, this cross functional team can be used as the centralized issue reporting team to
CEO.

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Shin Nippon Lanka (Pvt) Ltd

Board of Directors / CEO

Business & Engineering

General Affairs

IM-Business & Eng


Account
s
IM-AC

Administration
IM-Admin

Group E-Mail

Figure 10: Cross functional Issue Management Team

Long-term Strategic Plan


As the long-term plan, SNK can appoint an issue management team inclusive of issue
management officer and supportive staff. Then, the issue management team will directly be
linked with CEO, so that, potential issues can be communicated to him.

Shin Nippon Lanka (Pvt) Ltd

Board of Directors / CEO

Business & Engineering

General Affairs

Administration

Account
s

Issue Management Team

Figure 11: Appoint an Issue Management Team

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As of the current condition, no issue management team is available with SNK and hence the
level of being proactive in an issue is 20%. But, with the proposed structural change it is to
be upgraded to 50% by 2019.
1.4.2

Recommendation 02: Create a Listening Culture

SNK Board of director can be diversified to be a combination of local staff and Japanese
staff. This transformation will lead local staff to be empowered with their duties and enables
the controls of operational and functional staff.

Figure 12: Current Control System of SNK

Proposed
Transformation

Figure 13: Proposed Diversified Control System of SNK

According to the Appendix A, SNK has its own profile in its businesses in MEP sector. So, as
of the cultural audit conducted, it seems that there is lack of identification of each employees
job profile and job description considering from the Top Management to Operational level.
Thus, it is recommended SNK to get the more involvement of HR team of the company and
investigate the each employment profile and hence prepare job profile and job description for
all staff.
By creating listening cultures, the employee turnover is reduced to 10% by 2017 than the
same in current year 2016 is being 30%.
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1.4.3

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Recommendation 03: To build a Process for Corporate Communication

Internal Communication through Development of Profile, Magazines & Newsletters


A corporate profile can be developed to show all the stakeholders connected with SNK and
the corporate business and product range. SNK must develop a company profile that reflects
its product and services, strengths, completed projects, etc. This will lead other companies
to view the company and its businesses to attract employees to the company. Development
of company newsletters and magazines can be activated in order employees to aware of the
progressions and improvements in the organization and in projects.
External Communication through Press Releases to Marketing Publicity
SNK can have press release in order to have publicity for its businesses to make external
SHs aware about its businesses and also to get other interested parties to get SNK know.
Also, SNK can have local authority attractions for future incoming project opportunities.
Thus, SNK can publish its core business activities in Daily FT

Figure 14: Press release in Daily FT

By adapting corporate communication strategies, SNK can increase its customers 20% by
2018 and by 50% by 2020 and hence businesses can be developed.

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1.4.4

Membership No: 40001949

Recommendation 04: To establish a Process for Issue Management

Following the Regester and Larkin (2008) and David G. Laufer (2006), following modified
Issue management process is being proposed to implement in SNK. After appointing the
Issue Management Team, this process is to be implemented by end of 2017 to make the
process a systematic.
Political, Legal and
Reputational Risk

Issues Intrinsic to
Business

Corporate Mission,
Vision and Values

Learning from
Experience

Stakeholder
Expectations

Implementation

Monitoring of Issues
Identify Emerging
Issue Considerations

Strategy Development
& Action Planning

Issue
Identification

Produce
Issue Map

Assess
Stakeholder
Expectation

Assess
Company
Impacts

Identify
Performance
Gaps

Assess
Urgency
Factors

Assess
Impact
Factors

Issue
Prioritization

Figure 15: Establishment of an Issue Management Process


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1.4.5

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Political Consequences

In the implementation of the recommendations, still, it is important to identify the employer


and employee desire to adaptation for the change in Organizational Structure,
Organizational Culture and Corporate Communication systems. Thus, Kotters change
management process is used to analyze political impacts on proposed recommendations.

8
7
6
5
4
3
2
1

Anchoring new approaches in the culture

Consolidating gains and producing more change


Generating short-term wins

Empowering employees for broad based action

Communicating the change vision


Developing a vision & Strategy

Create a guiding coalition


Create Urgency

Figure 16: Kotters Change Management Process


Table 08: Kotters Change Management on IM Strategies
Recommendation 3:
Item

Change

Recommendation 1:

Recommendation 2:

Establish Corporate

management Step

Structural Change

Cultural Change

Communication System
& IM process

Establish a sense of

Potential Issues can be

A difference with a

Effective

urgency

transformed to a crisis

listening organization

communication

Crisis
through

corporate communication
2

Create

guiding

coalition

employee shall also be made aware to accept the change

Developing a vision &

To make SNK to be leading MEP company in Sri Lanka

Strategy
Communicating

The top management shall accept to implement the change and hence the

the

change vision

The top management shall communicate the change whenever they meet each
other. Also, the change vision always to be communicated among every
individual.

Empowering

Avoid the employee lack of skills to adapt to the change management process

employees for broad

by conducting training program.

based action
6
7

Generating short-term

There is a risk of being identifying this as the end of the change management

wins

process.

Consolidating

gains

It can be demonstrate the positive outcome of the change management process

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and producing more

to the employee. Then, by the passing of time, the change will come to body

change

and soul of the employee. In this step, there is risk being undermine, since the
process was very pressure to the employee.

Anchoring
8

approaches

in

new

This change management process was very hardly achieved and came to this

the

stage. Thus, always the employee has to keep in mind that the hardest route

culture

1.4.6

came so far.

Financial Consequences

Table 09: Cost Benefit Analysis for IM Process Strategy


Item

Description

Amount / US$ (Per

Recomendation

Month)
Costs
A

Issue Management Team

A1

Salaries
Manager 1 No

-1,500.00

Secretary 1 No

-500.00

Officers - 2 Nos

-800.00

A2

Transport

-500.00

A3

Power / Electricity

-200.00

A4

Telephone

-20.00

A5

Stationary

-500.00

A6

Refreshments

-20.00

A7

Insurance

-200.00

A8

Staff Welfare expenses

-100.00

Sub Total to A / US$

-4340.00

Corporate Communication

B1

Advertising

-1000.00

B2

Newsletters

-500.00

B3

Magazine

-500.00

B4

Press Print

-500.00

Recommend to
Implement.

Sub Total to B / US$

-2500

Benefits

C1

Improvement of Management & Employees Efficiency

+5000.00

C2

Customer retention

+6000.00

C3

Employee retention

+2000.00

C4

Intangible reputation

+3000.00

Sub Total to C / US$

+16000.00

Net Total / US$

+9160.00

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ETHICAL CORPORATE SOCIAL


RESPONSIBILITY AS A CORPORATE
REPUTATION

Task 2: 1700 Words


(Excluding Executive Summary)

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Executive Summary
Having practiced Corporate Social Responsibility (CSR) activities will result in defending its
reputation while the organizations can consider the welfare of community, protection of the
environment and sustainability.
The Corporate Social Responsibility activities within the organization are analyzed and
evaluated to observe current position of the company in adaptation of the CSR activities to
further strengthen the corporate reputation it deserves. Also, at the latter part of the report, it
will be recommended the CSR activities to be adapted introducing the budgetary proposal to
be implemented.

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2.1 Ethical CSR Practices as a Corporate Reputation


A wide range of obligations that an organization may feel it has towards its secondary or
external stakeholders, including the society in which it operates. According to the Caroll &
Buchholtz, (2000), the CSR has four main layers, as depicts by Figure 17.
Legal
responsibility

Economical
Responsibility

Corporate
Social
Responsibility

Ethical
responsibility

Philanthropic
Responsibility

Figure 17: Corporate Social Responsibility (CSR)


The corporate ethics are what constitute right and wrong behavior. Thus, in relation to CSR
practices, the organizations also shall follow their responsibilities towards the external
stakeholders in ethical manner. It is therefore vital for organizations to practice ethical
responsibilities.
According to Sustainability Report (2014/2015), The Coca Cola has conducted several CSR
projects around the world for the sake of environmental protection, for the wellbeing of the
community, customer health and safety programs by protecting social human rights,
economic responsibilities considering them as their CSR values. Also, Nestle, Apple, Intel,
Volkswagen, Sony, BMW, Google, Microsoft, Disney and Daimler (Reputational Institute
CSR RepTrak - 2013) are the 10 companies with best CSR and hence they deserve the
reputation.

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Table 10: Impact of CSR on Corporate Reputation


Impact on
No

Benefits of CSR

Justification with Examples

Corporate
Reputation

Ability to have positive impact in

Diet Cock as healthy beverage from Coca-cola

the community

(Sustainability Report, 2014/2015)

Act as an insurance for CR

Supports public value outcomes

Largest Toy recall Mattel, 2007 due to high


level of lead paint (Louise, David,2007)
Water Supply Schemes for remote temples
and schools by Brandix (Reach Issue1,2016)

Supports being an employer of

In 2015, 81% of employee retained in Apple.

choice

(Jacqueline Renfrow,2016)

Encourages both professional &

Based on the statements made by CSR

personal development

executives in Brandix. (Reach Issue1,2016)

Enhances relationship with SHs

Innovation is promoted

Brandix has a good relationship with its SHs


(Reach Issue1,2016)
eZ Cash mobile money platform from Dialog
(Sustainability Report, 2014)

High

High

High

High

High

High

High

Coca-Cola, Sustainable Agriculture, 7 step


8

Sustainability is promoted

supplier engagement program. (Sustainability

High

Report, 2014/2015)
Coca-Cola has differentiated products based
9

Brands can be differentiated

on Low or No calorie beverages (Sustainability

High

Report, 2014/2015)

According to Table 10; it can be seen that having CSR activity creates a significant impact
on corporate reputation. Thus, every organization can adapt the CSR activities and serve for
the betterment of SHs and the sustainability of the environment.
2.2 Organizations Current Position of CSR Activities
The Corporate Social Responsibility (CSR) is the main key factor which an organization can
attain its corporate reputation. If the organization is handling CSR activities, the key
stakeholders will have a good impression on companys business direction. Thus, the
corporate reputation will be the outcome of CSR activities.

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Table 11: Grading for Types of CSR Activities in SNK


Item

CSR1

CSR2

Type of CSR

Economical
Responsibilities

Current status of the CSR

CSR Activity

Activities

Company needs to be primarily


concerned with turning a profit

SNK

Legal

range from securities regulations

applicable

laws

Responsibilities

to labor law, environmental law

Good

Conduct

and even criminal law.

Nondiscriminatory Policy

CSR3

CSR4

Responsibilities

Philanthropic
Responsibility

CSR4

manner

and

promote

the

sustainability

Making an effort to benefit society

CSR1
5
4
3
2
1
0

attention
under

on
its
&

Environmental friendly by
introducing the

Perform the businesses in ethical

Ethical

pays

CSR
activity

Earning profit in businesses

Company obeys all laws which

Grade on

environmental policy

paying fair wages

Well fair of the society

Fair trading

Product safety and quality

CURRENT
GRADE

CSR2

CSR3

Figure 18: Current CSR Status of SNK


According to the Appendix D, it can be seen that the SNKs policy is indirectly targeting on
the welfare of the society, environmental protection and promoting ethical behavior within the
organization by using Health and Safety Policy, Quality Policy, Environment Policy and
Good Conduct & Nondiscriminatory Policy. So, the organization has identified the value of
being a responsible body to personal internally and externally. Again, it is required to having
proper communication of this responsibility to its stakeholders to make them aware about the
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CSR activities which SNK involved in. Then, it will result in strengthening the corporate
image of the company.
The company policy is proportionate with responsibility for the CSR activities. But, the
companys corporate communication about the CSR activities shows that it is not being
active and not connected with the external SHs. Also, the management and employees have
poor understanding about the value of the CSR activities to enhance its reputation.
2.3 Identity of Organization Based on Current CSR Activities
According to Dowling (2004), the

Symbolism

corporate identity is the projection


of the organization. The governing
attributes of corporate identify is
defined as of Figure 19. Under this

Behavior

section, the identity of SNK based


on

CSR

activities

will

Corporate
Identity

be

examined.

Communication

Figure 19: Identity Matrix


Symbolism
How a firm views itself, how it wishes to be viewed by others, and how others recognize and
remember it. In the context of CSR activities of SNK, Table 12 shows the current status of
symbolism in relation to CSR activities.
Table 12: Symbols towards current CSR activities of SNK
No

Attributes of Symbolism

Embedded to SNK CSR activity

Grade

Color

No

Visual

No

Signs

No

Slogans

No

Fonts

No

CSR Statement

No

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Corporate Behavior & Corporate Communication


Corporate behavior is very important for SNK to success in financially and SHs engagement
between corporate and business interests. The corporate behavior involves legal rules,
ethical codes and social responsibility principles. When SNK acts ethically and socially
responsibly in its business decisions and strategic planning, then, it would help SNK to be
more sustainable and long term survival.
Table 13: Effect on Corporate Behavior and Communication on CSR

Attributes of

Effect on SNK Corporate

CSR activity

behavior

CSR
SNK
Economical
Responsibilities

having

Corporate
Communication

higher

High

Employee

employee turnover. So, It

turnover implies that

The company is stable in its

can

that

CSR activities are not

financial status.

economical

responsibilities

solid within SNK due to

are not fully met towards its

lack communication of

employees.

CSR.

According to Appendix D,
under

the

environmental

policy, SNK promotes the


compliance
Legal

is

Effect on SNK

to

the

legal

compliance.

be

noticed

The SHs perceive SNK as


an

environmental

friendly

company. Also, it implies


that SNK behaves as a
corporate citizen.

Responsibilities
Also, SNK promotes the
good conduct in its Good
Conduct

&

Nondiscriminatory Policy

Since,

SNK

avoid

discriminations and promote

No external

the good conduct, SHs feel

communication about

safe working with SNK.

SNKs legal
responsibilities

Ethical
Responsibilities

SNK can not be seen as a

Paying fair wages

company paying fair wages.

Well fair of the society

But,

Fair trading

Japanese

culture

promotes fair trading.

The Society is benefited with

External SHs are having

Philanthropic

the high quality products and

good impression about the

Responsibility

services, SNK offers under

SNK product and services.

its quality policy

As a result of the identity mix analysis related to SNK, it can be seen that SNK has no any
symbol to show stakeholders about the CSR activities. Whereas, based on the policies
defined by SNK, it is obvious that SNK is following its responsibilities towards the welfare of
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its stakeholders in a narrow range. Also, the internal and external communication about the
CSR activities with its stakeholders is very poor. It therefore can be concluded that CSR is
not embedded with SNK.
2.4 Recommendation for Corporate Social Responsibility Strategy
Table 14: Objectives of recommendations for CSR strategy
No

Objectives

To make an awareness program for the Staff about the CSR

To establish a CSR communication System

To introduce a visual identity for CSR activities

2.4.1

Recommendation 1: An Awareness Program for the management and employee


about CSR

It is being proposed SNK to hire a resource person from a university or professional


organization and conduct an awareness program for all the staff. The awareness program is
to be conducted in two stages. As the first stage, the management level of SNK is educated
on the essence of CSR activities on its corporate behavior and the businesses.
As the second stage, the employees are educated to understand the responsibility of them
as an organization towards the CSR activities to serve the society as a corporate citizen.
2.4.2

Recommendation 2: Establish CSR Communication Process

Environmental Policy
Good Conduct &
Nondiscriminatory Policy

Feedback

Internal Corporate
Communication

Corporate Social
Responsibility (CSR)

Quality Policy

Health & Safety Policy

Feedback

External Corporate
Communication

Figure 20: Conversion of corporate policies to CSR to communicate among stakeholders

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SNK has its own policies as depicts in the Figure 20. It is recommended SNK to re-define
the policies targeting the CSR activities to be involved. Then, the internal and external
stakeholders will perceive to earn the public trust on the company and the reputation can be
gained.
2.4.3

Recommendation 3: Introduce a visual identity for CSR activities

Corporate social responsibility


Figure 21: Proposed Visual Identity for SNK CSR
Since, SNK does not process any visual identity on CSR activities, as of Figure 21. It is
recommended SNK to adapt the proposed Logo and update the official web site so that the
web site includes a separate page for CSR activities. Also, SNK can process the corporate
profile, newsletter and magazine using this logo with its ongoing CSR activities.
2.4.4

Political Consequences Analysis

Table 15: Political Consequences of CSR process strategy


Recommendation 2:
Item

Change management

Recommendation 1:

Policies as CSR as

Recommendation 3:

Step

Staff awareness

Corporate

Visual Identity

Communication

Establish a sense of
urgency

Create a guiding
coalition
Developing a vision &
Strategy
Communicating the
change vision

Has SNK being a

To attract SHs &

responsible company to

Corporate

society

Communication

SCR symbol is required

The top management shall accept to implement the change and hence the
employee shall also be made aware to accept the change. This shall be started
through the leadership building within SNK.
To make SNK a responsible corporate citizen in Sri Lanka
The top management shall communicate the change whenever they meet each
other. Also, the change vision always to be communicated among every
individual.

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Empowering

Avoid the employee lack of skills to adapt to the change management process

employees for broad

by conducting training program.

based action

Reward the people for making change happen

Generating short-term

The staff can be given the targets and they shall be rewarded for their success

wins

of targets.

Consolidating gains
7

and producing more


change
Anchoring new

approaches in the
culture

2.4.5

Membership No: 40001949

After every win, the condition is to be evaluated and plan for any improvements
of it. The change management ideas shall always kept to be fresh

The progress shall always be monitored. When, new staff hiring and training,
they shall be educated on these.

Cost Benefit Analysis

Table 16: Cost Benefit Analysis on CSR Strategy


Item

Description

Cost / US$

Staff Awareness

A1

Hiring a Lecture

A2

Refreshments

100.00

A3

Training Materials

500.00

A4

Transport

150.00

A6

Lunch

400.00

Sub Total to A / US$

Benefit

1,700.00

2,850.00

Having CSR within SNK


means it will be an insurance
for the company. Thus, it is
always benefitted to the

Corporate Communication

B1

Advertising

800.00

B2

Newsletters

500.00

B3

Magazine

500.00

B4

Press Print

500.00

Sub Total to B / US$

organization which can not

2,300 Per month

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REFERENCES
Shin Nippon Air Technologies Annual Report (2014)
Shin Nippon Air Technologies Annual Report (2013)
Shin Nippon Air Technologies Annual Report (2012)
Shin Nippon Air Technologies Annual Report (2011)
Dialog Sustainability Report (2015)
Brandix Reach Issue 1 (2016)
Coca-Cola Sustainability Report(2014/2015)
BSR, Stakeholder Mapping (2011),
Fombrun, C. (1996) Reputation. Boston, Harvard Business School Press.
John Dalton (n.d), Reputation and Strategic Issue Management, London School of Public
Relations, UK
Peggy Simcic Bronn and Carl Bronn (2002) Issues management as a basis for strategic
orientation, Journal of Public Affairs
Mike Hogan (2002), Issue Management, Forest Communicators Network
Kayondo Denis Mukasa , Kyungho Kim , Hyunwoo Lim (2015), How Do Corporate Social
Responsibility Activities Influence Corporate Reputation? Evidence from Korean Firms
Majid Khan , Abdul Majid , Muhammad Yasir, Muhammad Arshad (May 2013) Corporate
Social Responsibility and Corporate Reputation: A Case of Cement Industry in Pakistan, Vol
5, No 1
Carola Hillenbrand, Kevin Money (2007), Corporate Responsibility and Corporate
Reputation: Two Separate Concepts or Two Sides of the Same Coin?
Marina MATTERA, Vernica BAENA (2012) Corporate Reputation and its Social
Responsibility: a Comprehensive Vision, Vol 22, Pg129-149
http://247wallst.com/special-report/2013/02/15/companies-with-the-best-and-worstreputations/3/
TORRANCE, Calif. (2016) [online]
http://corporatenews.pressroom.toyota.com/releases/toyota+recall+2016+camry+avalon+apr
il13.htm (Accessed 14 May 2016)
Geoff Livingston (n.d), [online]
http://www.convinceandconvert.com/social-media-strategy/5-reputation-managementlessons-from-prince-dell-and-beyond/ (Accessed 14 May 2016)
Hafsa Sabry (n.d), [online]
http://www.thesundayleader.lk/2015/09/20/kelani-river-contaminated-with-cancer-causingchemical/ (Accessed 14 May 2016)
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Louise Story and David Barboza (2007) [online]


http://www.nytimes.com/2007/08/15/business/worldbusiness/15imports.html?_r=0
(Accessed 14 May 2016)
David G. Laufer (2006), a Practical Process Guide to Issue Management, Public Affairs
Council

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APPENDIX A: COMPANY BACKGROUND


SHIN NIPPON LANKA (PVT) LTD
It is an international company with the origin from Japan. It is engaging in MEP project; local
and internationally. SNK has its branches in Singapore, Myanmar and Sri Lanka while the
head office is being situated in Japan. Shin Nippon Lanka (Pvt) Ltd is the leading MEP
Company in Sri Lanka being competitive to other several local and foreign companies. In Sri
Lanka, SNK is delivering its core MEP services since 1984. Also, SNK is the pioneer for the
Air Conditioning in Sri Lanka.
Vision
To be the leading mechanical & electrical service provider in echo friendly technologies
Mission
1. To contribute to the globe in and environment friendly manner through air and water
thermal and electrical technologies
2. To maintain the trust and the relationship with client, shareholders, employees,
subcontractors and stakeholders
3. To contribute to the social development as responsible corporate citizen

4. To conduct our business activities in fair and transparent manner


5. To create a comfortable working environment

Milestone in SNKs History


Year

Description

1980

Commenced operation in Sri Lanka with New Parliament complex

1984

Establishment of Sri Lanka branch

1987

Executed Mechanical work for Hilton Hotel, Sri Lanka

1991

Executed M&E work for Sugathadasa Stadium, Sri Lanka

1996

Executed M&E work for JAIC Hilton Tower, Sri Lanka

2003

Executed M&E work for Hatton National Bank, Sri Lanka

2005

Colombo Bandaranayake International Airport Expansion Project

2010

Teaching Hospital Anuradhapura, Sri Lanka

2014

RIU Hotel Ahungalla Sri Lanka

2015

Shangri-La, Phase 1, Colombo, Sri Lanka

Financial Statement
2011 Net Income
2012 Net income
2013 Net Income
2014 Net Income

8 Million USD
- 10 Million USD
14 Million USD
13 Million USD
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Certifications
1. ISO 9001:2008 certification from Sri
Lanka Standard Institute in 2012
2. Registered under Sri Lanka Sustainable
Energy Authority as an Energy Service
Company
3. Institute of Engineers Sri Lanka (IESL)
accredited company to train Engineers
for their professional qualification

Product & Services


Product

Services

Fire Dampers

Volume
Dampers

ACMV Ducting

1. Mechanical, Electrical & Plumbing Design


2. Quantity Surveying and cost estimation
3. Project management, contract
administration
4. Drafting services
5. Maintenance
6. Fabrication
Completed Projects:
Bandaranayake International Airport Colombo, Sri Lanka

Competitive environment
Abans Building Service, Sri
Lanka
Abans AC, Sri Lanka
Central
Engineering
Consultancy Bureau (CECB),
Sri Lanka
Maxir, Sri Lanka
State Engineering Corporation
(SEC), Sri Lanka
Wohhup
International,
Singapore
China Harbor, Chaina

Toyota Wattala Showroom Colombo, Sri Lanka

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APPENDIX B: STAKEHOLDER MAP


Government
Public Authorities,
regulators, Policy
Makers

Employees
Current employees,
retirees

Industry
Suppliers,
Competitors, Industry
Associations

Community

Media

Schools,
University

Local and
International Media

Civil society
organizations

Customers
Direct & indirect
customers

Labor Unions

Environment

Owners

Financial Institutions

Nature, NGOs,
Animals

Investors,
shareholders

Bank

Figure 22: SH Map for SNK

Page 42 of 46

APPENDIX C: COMMUNICATION AUDIT


Corporate

Key Activities

Communication Mix

Evaluation
In SNK, each 3 month of time, Staff meeting is conducted and CEO gives his speech and the

Management
Communication

Communication between managerial

General Manager and Senior Managers / Administration and Senior Managers / HR delivers

level representatives and SH audiences

their speeches addressing future plans and conduct other rewarding ceremonies. Whereas, the

of the organization

external communication with Media and universities and other professional bodies are not
targeted in this sense.

Marketing
Communication

Formulating direction & policy,


repositioning of product/ brand
corporate brand communication

Corporate brand building advertising,


Organizational

Corporate sponsorships,

Communication

Charitable contributions, CSR,


employee communication

Press releases, media relations, marketing publicity


SNK has done massive projects in Sri Lanka, but, it has no close connection with press and
Media and Marketing publicity programs
In-house magazines

SNK does not process in-house magazines

Employee newsletters

Employees are encouraged to do this, inactive

Communication networks SNK has group e-mail system and each staff member has been
provided an email address.
Corporate Sponsorship & Charitable contributions Not engaged.
SNK Vision / Mission

- Has become just some sentences, they have not connected with

employees and employers mind


Formulating plans for identification &

SNK has no proper system for the identification of stakeholders and the issues they are facing.

Integrated Corporate

monitoring of stakeholder sensitivities

In SNKs long history, it has not come across any crisis in its businesses, but, there is risk of

Communication

/issues

taking place that kind of crisis with what it engages in. Thus, there is a need of having crisis
communication plan

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Figure 23: SNK Outdated web site

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APPENDIX D: COMPANY POLICIES


Item
1

Description

Impact on CSR
Activities

Health and Safety Policy

1.1

Train & develop employees to use working machineries & equipment correct way for preventing accident & injuries.

High

1.2

Motivate employees to use safety methods & equipment (safety helmet, safety glass, gloves, etc.).

High

1.3

Ensure employees to prevent an accident & injuries from workplace environment

High

1.4

Build clean, healthy, comfortable and safe work place

High

1.5

Prevent work environment from pollution & garbage

High

1.6

Direct supervision, Periodical review and Satisfactory audit for all operations of our work

2
2.1

Quality Policy
We highly believe that the quality ( we say "Shin Nippon Quality") of our products & services make us differentiate in the market
We continuously maintain & upgrade our quality management system in accordance with ISO 9001:2008 standard. Further we adopt engineering best

2.2
3
3.1

Medium

practices which are operating in all our business activities, are used in our principles in Japan

High
High

Environment Policy
Ensure compliance with all applicable legal and other requirements, which relate to its environmental aspects

High

Promote environmental awareness and commitment to the policy amongst all employees and stakeholders through training and communication to
3.2

encourage suppliers and subcontractors to apply sound environmental principles

3.3

Avoid the wastage of materials, water and energy by paying careful attention to their use

3.4

Prevent pollution and minimize environmental disturbance from our activities

3.4
4
4.1
4.2

Apply continual improvement by reviewing the environmental aspects related to our activities by setting appropriate targets and objectives for improving
performance

Low

Low
Low

Good Conduct & Nondiscriminatory Policy


It is highly believe that the motivated working environment of the company is created by the conduct of all the parties in the company. Therefore we
expect that all the employees behave in an ethical, professional and harmonize way
The company is committed to provide a work environment free of discrimination and/or harassment. We prohibit discrimination/ harassment in the work

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Low
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place, whether committed by or against staff, co-workers, customers, vendors, or visitors. We want you to work and develop in an environment that is
respectful and productive. Workplace discrimination or harassment based on an employees race, color, religion, sex, national origin, citizenship, age,
status, sexual orientation, disability, marital status, or any other basis prohibited by law, will not be tolerated. The company prohibits inappropriate
conduct based on any of the above characteristics at work, on company business, or at company sponsored events

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