Home / Interviews / Towards understanding corporate social responsibility
Towards understanding corporate social responsibility

Towards understanding corporate social responsibility

Interview with Mohammed Hanif Ajari — Director Strategic and Supply Chain Development, Getz Pharma

Profile

Mohammed Hanif Ajari Vice President of Institute of Cost and Management Accountants of Pakistan and advisor to the board of South Asian Federation of Accountants is currently working as Director Strategic and Supply Chain Development in Getz Pharma, a leading pharmaceutical company. He did his MPhil in supply chain management, fellow member of institute of supply management (USA) and also chartered member of charter institute of logistics and transport. He has recognized and approved 15 thesis in the field of business process outsourcing, business process engineering, SCOR, and supply chain management dynamics, leverage financing, employees stock options, SCM Risk and enterprise risk management. His PhD thesis on enterprise management is being evaluated. He has attended many vocational and professional training programs around the world. He is also educationist and working as visiting faculty with IBA and other universities in Pakistan and abroad. He also has working experience with Novo Nordisk, Dynea Pakistan Limited, UTI- USA based subsidiary in Pakistan, Organon Pakistan, Dow Chemical HK and Aspro Nicholas and Reckit & Colman Pakistan, Lufthansa, Eagle, Schenker, and World Wide logistics. He implemented SAP (FICO, IS, PS, MM, PP, SD, PM, QM, HCM, and various other sub modules) in Getz Pharma (Private) Limited enterprise network, CIS, Baqai Hospital and BTH. He has also implemented BPCS version 5.0 in Organon Pharmaceutical Company in Pakistan and India. Besides implementing SAP (Order fulfillment, Material Management, Production Planning and Financial module) in the South East Asia region including Pakistan, Afghanistan and India. Recently PAGE interviewed Mohammed Hanif Ajari on the much talked about issue of Corporate Social Responsibility (CSR) in our part of the corporate world.

PAGE: What is your opinion of the current phase of corporate social responsibility?

MOHAMMED HANIF AJARI: I am confining my reply to this question as a perspective to Pakistan. While different organizations have derived different meanings for the term corporate social responsibility, however there continues to be much in common between all the strategies adopted by companies for CSR programs. While it is commonly argued that Pakistan is a country that is still lacking in CSR practices among companies there have been certain organisations that have taken the lead and must be lauded for their efforts in contributing to the society and people of Pakistan.

Corporate Social Responsibility can be understood as “the continuing commitment by businesses to behave ethically and contribute to economic development while improving the quality of life of the workforce and their families as well as of the local community and society at large.”

There are companies that has been exemplary in its CSR initiatives in Pharma, Consumer Goods FMCG, Auto and Banks and I say this not because of any personal biases against any other companies but because their CSR program titled the Sustainable Living Plan has covered a wide domain of areas that has considerably impacted the society and the underprivileged people.

Various objectives noticed in the Company’s CSR plan are summarized below:

Small Actions — Big Difference

1. Reduce the Environmental Impact of our products through reduction of greenhouse gases, optimization of water usage and waste management.

2. Enhancing Livelihoods by rural programs and creating opportunities through enhanced distribution and empowerment through education.

3. Improving Health & Hygiene by helping more than 68 million people take action to improve their health and wellbeing through their pharma, health care and personal care products. Nutrition enhancement to reduce salt and calories in food brands.

4. Promoting Sustainable Workplaces by improving employees’ lifestyles, encouraging diversity and creating an environmentally friendly office.

Through this sporadic drive companies are reaching to considerable people but far from the desirable target. There is a need to do more in health, and education sector.

PAGE: What are the main challenges that the field is facing?

MOHAMMED HANIF AJARI : CSR reporting has been in fashion in many multinational and progressive national organizations for quite some time now. However, this is still a new idea for many organizations and they are either unaware of the concept or don’t know how to report on the triple bottom line (TBL).

Captured below are the major challenges for TBL reporting as part of a corporate strategy towards image building, marketing, transparency, as a stakeholders’ management tool and for other purposes. The points below are based on my deep practical professional involvement of diversified organisations the Programme for Industrial Sustainable Development and opinions thereof.

1. Informal Work Culture

The business community is culturally introverted in Pakistan and does not like to share or demonstrate their good work. The scaling up of progressive initiatives is therefore restricted. Small and medium businesses are typically afraid of proper documentation given the trust deficit with government agencies and their tendency to evade taxes and practice financial transparency. ‘Seth’ organizations, as they are notoriously called, are run as family entrepreneurships and don’t consider it necessary to adopt fair practices, working ethics and legal obligations as corporate citizens of Pakistan. Bribery and corruption as business lubricants are avowedly and frequently used in their dealings with government departments. The distinction in corporate philanthropy and personal philanthropy of the owner is rarely distinguishable in their accounts books.

Unless work culture are formalized and proper documentation, monitoring and record-keeping become usual business practices, TBL reporting will remain a farfetched idea.

2. Lack of Top Managements’ Understanding

The educational profile of the owners and top managers is an epic in most cases. The sophisticated concepts and ever changing terminology introduced by development sector agencies or academia are not always warm and welcoming. There is a need to make the discourse understandable and the terminology as much vernacular as possible. In order to avoid panic and fear among the owners and top managers, every effort should be made to avoid assault of fashionable words and phrases and the focus should be to bring them on board and win their commitment. Without their commitment, no action is possible from other tiers of management and workers. Professional ethics as consultants and privacy should be guaranteed also as tools to secure top managements trust among such companies.

3. Lack of Capacity of Human Resources

As discussed above, workers are not obtained, retained or maintained in general as the companies’ most valued assets. They are rather often borrowed on a makeshift basis. Therefore, the majority of professional staff and workers are not properly educated and trained to carry the kind of paper work and record keeping required to prepare TBL-based reports. They need special facilitation and training to enable them to develop CSR reports. Due to the absence of the spirit of innovation, enterprise and ownership of their employer company, the staff and workers most likely offer resistance when change is required, in behavior, working ethics or tools.

4. Lack of Government and Development Agencies’ Support

There are very few development agencies and NGOs working on the promotion of transparency and CSR reporting. The development projects have their own limitations as well. They are time and resource bound and as a general practice fail to meet sustainability criteria for project interventions. Moreover, these projects can reach and enable only a few companies and cannot bring about a cultural change in the whole small and medium sector. The governments leverage is also very limited and doesn’t have any promotional scheme or facilitation mechanism to promote voluntary tools like TBL-based sustainability reporting in Pakistan.

5. Religious Notions

A very important factor is the interpretation of some religious injunctions which presumably shy away from the publicizing of philanthropic expenditure. There is a need to make the distinction between personal and corporate philanthropy understandable to people and the scaling up and catalytic effect that philanthropic ‘advertising’ can produce. TBL reporting can serve as a means to develop a better image of Pakistani manufacturers to the external and internal stakeholders and can air the fact that all is not bad with Pakistan’s corporate culture. One should make it clear that in an increasingly competitive business environment, CSR reporting can at least be used to offset negative publicity and can help improve the distorted image of local companies with respect to their poor legal compliance record, allegations of corruption and malpractices such as child labour and environmental damage against them.

6. Resistance to Reveal Financial Information by Private Listed Companies

Public-listed companies have a more transparent profile and tend to belong to larger manufacturing and industrial groups. They conduct their financial audits regularly and make them available to the public and other stakeholders. Small and medium, privately owned companies are more hesitant to reveal their financial indicators of performance on a TBL format, and perhaps rightly so. Therefore, as a first step, only public listed companies and groups should be encouraged and facilitated to develop their sustainability reports on TBL.

7. Voluntary Tool

TBL reporting is a voluntary reporting tool. In most countries, including in Western Europe and North America, the quality, design, language, format, frequency and accuracy of indicators are also not universally standardized or, more importantly, made mandatory. There is limited public pressure on companies to develop their TBL reports on a regular basis. Consumers, for instance, are more price conscious than quality or brand sensitive. They are not willing to shift to ethical and sustainable consumption patterns themselves; therefore, companies don’t consider it necessary to portray their sustainability profiles. It’s a negative cycle of few people ‘putting their money where their mind/mouth maybe’.

8. Expenditure on Reporting

TBL reporting poses additional financial and human resources burden on the companies. As a general principle, private companies are least willing to spend on apparently nonproductive and qualitative items on their agenda. Many companies either don’t have their brand names or they rarely bother about generating the brand loyalty among the consumers. A cheaper (and more environmentally-friendly) alternate may be to generate electronic versions of TBL reports and upload on the corporate website for the general public, but most Pakistani companies of considerably big stature haven’t yet felt or considered to reap the benefits of a strong cyber presence.

9. Resource Constraints in SMEs

The financial and human resources constraints are the major problem in progressive yet entrepreneurial businesses. As this type of business is most hit by global and local competitive pressures, they are often struggling for their very existence. They believe that environmental or social care is a kind of luxury they aren’t afford; some however, are learning the hard way, that this too is an investment which, if not made when the time is right, will translate into a cost that they really can’t afford.

10. Lack of Public Service Orientation

Businesses in Pakistan don’t seem to know or assume their roles and responsibilities as corporate citizens or as a responsible entity. In a cultural setting where the public enterprises are far from accepting their role as customer-focused organizations, the business community can hardly be blamed for their secretive practices or their unwillingness to channelize more resources to philanthropic activities and documentation of philanthropic activities.

PAGE: How important is for a company to be transparent about its CSR activities?

MOHAMMED HANIF AJARI: You can’t underrate transparency. It is the catalyst for driving sustainability performance. This is why sustainability reporting is so critical. Once a company makes a commitment to transparency, the rest must follow. The commitment to publish carbon emissions, employee turnover, community impacts and more leads a company to ask itself searching questions about its performance. This is why I have made it my professional mission to drive awareness of the importance of corporate transparency and spend most of my time involved in activities which are connected with advancing transparency in one way or another.

Many Companies have developed the Transparency Index methodology which is the integral part of their internal and management reporting as a way of assessing the sustainability transparency level of publicly traded corporations via their corporate websites. These tested the methodology trial and test run for considerable period of time is continuously evolving in domestic and network of international market where the company interact with the cluster of customers, vendors, service providers and whole network as a whole.

The Transparency Index follows a rigorous methodology which, once determined, leaves almost no scope for judgment — the methodology defines what should sustainability information should be present on a corporation’s website, following, broadly, the Global Reporting Initiative reporting framework. This includes information relating to all the sustainability dimensions that would normally be included in sustainability performance reporting. If the information or website feature is present, the company gains points. If it is not, it doesn’t. That means that we can be sure of delivering a neutral, unbiased view of corporate transparency as we perform our analyses.

 

PAGE: How the Government can monitor that CSR is properly serving the public?

MOHAMMED HANIF AJARI: Through a framework of reporting by SECP with a mandatory requirement of the contents needed as an integral part of reporting. It should comprise of the following:

1. Define corporate social responsibility for your company or industry.

What works for a bank or furniture, health, and pharma manufacturer may be significantly different from a bottling company or a grocery store chain.

2. Conduct extensive and continual research on the concepts of Corporate Social Responsibility.
3. Establish metrics for measuring the impact of the company’s CSR practices.

For example, what percentage of after tax Rupee is used to support these activities? How does it compare to other comparable companies? How many labor hours per month or per year are set aside for CSR activities? Quantitative metrics are easier to defend and promote than qualitative metrics.

4. Involve employees in defining and advancing CSR.

Form ad-hoc groups to decide how best to be appropriately socially responsible with the resources available. Give them the authority and responsibility to figure out a way to make it happen. They will do it far faster than some corporate committee.

5. Keep track of all measurable costs.

As much as the company wants to be socially responsible, it also has an obligation to be fiscally accountable to other shareholders;

6. Communicate to everyone – sometimes subtly, sometimes loudly.

Publicize your activities internally to all employees and externally to all other stakeholders as appropriate. Invite civic, religious, and corporate leaders in to show what you are doing and encourage them to join you in their efforts.

7. Establish positive and pro-active relationships with other socially responsible companies

PAGE: Could you tell us what is your opinion of the current phase of corporate social responsibility?

MOHAMMED HANIF AJARI: While engaged for more than 3 decades I have penned all the above phase of corporate responsibilities. My experience with Pharma, Chemical, Bank, and Third party logistics with multinational companies have given me enough exposure on triple bottom line and social responsibility reporting being prevailed in the corporate headquarters. However, in Pakistan lot of needs for evolving this as one of the key pivotal point for the success in corporate in Pakistan.

PAGE: Tell us about an accomplishment that shaped your career?

MOHAMMED HANIF AJARI: Throughout my career shaping I have remained focus on my core values and targets. Always trying to get more exposure to my field and try to use the same in my practical life. Getting professional recognition is my moto and always know my limitations.

PAGE: Tell us about a project that forced you to be innovative and creative?

MOHAMMED HANIF AJARI: Following projects have really inspired me and have pumped enough motivation in me to do better and better.

  1. Enterprise wide implementation of SAP
  2. Global transformation of SCM and Logistics activities
  3. Bar Coding and Serialization
  4. International Tax planning
  5. Financial Supply Chain Strategies
  6. Being an active part of WHO implementation team
  7. Global business network
  8. Freight management
  9. Sustainable Global reporting etc.

PAGE: What do you value most about our culture and vision?

MOHAMMED HANIF AJARI: Whether my mission is lofty or more down to earth depends entirely on my own. Here is a personal example while I follow my mission, culture and vision.

“To be a decent person who is respected by family, friends loved ones and my chosen communities. I am here to make a positive difference despite being imperfect. My work reflects my values and enables me to travel widely and enhance the lives of others. People will remember me for being there to lend a hand, keeping an open mind, and for getting involved in issues that matter most to me.”

My version could be much more specific. Notice that there is legacy involved; capturing the impression you want people to summon when they think about you. Consider using a day off for career development when pondering this.

There will always be constraints in your life — money, health, the economy, long held fears. Try to put these aside and tap into your intuition for a moment. Then project out a five to ten year timeframe. You might come up with a vision statement along the following lines:

“I am more courageous in my day to day living. There is extra time for family and loved ones, healthy activities, and good old-fashioned fun. I don’t hide my values or pretend to be something I’m not. My basic financial needs are met and I’ve saved just enough to pay for a career change.”

As I seek to achieve my objectives, there will be a strong reliance on values. In the words “If we are to go forward, we must go back and rediscover those precious values — that all reality hinges on moral foundations…

Be consistent with – and supportive of – my mission and vision. The resulting personal values statement may resemble this example:

“To try and be honest (yet not deliberately hurtful) when dealing with people. But I will also strive to be more assertive, politely when possible, so I don’t get trampled on. Money is important. I have to earn enough to afford the things I really like. Visiting different places around the world with my wife is important to me. So is being in the outdoors and enjoying nature.”

The above process may seem too touchy-feely for use in a career plan. It gets concrete when combined with an analysis of your career strengths, weakness, opportunities and threats (SWOT). Hence add a career goal statement and you have the makings of a personal strategic plan. Together these can serve as your map as you navigate upcoming roads.

PAGE: What do you enjoy doing in your free time?

MOHAMMED HANIF AJARI: Teaching I am vesting faculty with IBA and other universities:

Reading
Research
Blog writing
Engage on Social Media
Active involvement in professional organizations etc.

PAGE: Why are you working in this industry?

MOHAMMED HANIF AJARI: My extensive period of life spend on working with the Pharmaceutical Industry. This is research based and continuously evolving. This industry has given me lot of exposure on SCM, Logistics, Compliance based professional engagement, Global Finance, CSR, ERP—SAP. Further this industry has to do improving the life of the people and helping them in their suffering.

PAGE: What do you hope to accomplish within the next 5 years?

MOHAMMED HANIF AJARI: Frankly at the twilight of my career I am planning decent retirement where through my skill parting activities I can return what this country and this profession has delivered me.

Check Also

Healthy competition and growth very likely to improve the quality of professional education in Pakistan

Healthy competition and growth very likely to improve the quality of professional education in Pakistan

KSBL is instinctive in keeping its curriculum modern and according to market needs Better policy …

Leave a Reply