Companies and Corporate Social Responsibility

A Change in the External Environment Forcing a Company to Make Changes in the Way it Functions

Example: Rising Healthcare Costs, Rising Senior Population and Deepening Complexity of Medicare Part D lead to AARP/Walgreens Team to Assist Senior Citizens

The “Association of American Retired Persons” (AARP) was established to assist senior citizens with their needs, including medical issues (Novelli, 2009), while Walgreens, Co. (Walgreens) is a pharmaceutical giant with quarterly sales in excess of $16 billion, more than 60% of which is from prescription sales (Spain, 2010). Over a course of decades, the senior population of the U.S. significantly increased: between the 2000 U.S. Census and the 2010 U.S. Census, the country’s population of persons aged 65 and older “increased 15.1% to 40.3 million, or 13% of the population” (Senior Journal, 2011). Meanwhile, there was a dramatic increase in U.S. healthcare costs: “Expenditures in the United States on health care surpassed $2.3 trillion in 2008, more than three times the $714 billion spent in 1990, and over eight times the $253 billion spent in 1980 (Kaiser Family Foundation, 2010). Finally, Medicare Part D, the facet of Medicare covering seniors’ prescriptions, is a complicated program: each state reportedly has 40 — 50 choices of Medicare policies and recipients reportedly had a difficult time choosing their policies (Medicaid Part D, 2009). (Please note that the web site name of “Medicaid Part D” is misleading, as this was, in fact an interview about Medicare Part D.) Medicaid Part D was further complicated by Health Care Reform: the Patient Protection and Affordable Care Act (P.L 111-148), signed by President Obama on March 23, 2010, reduces enrollees’ prescription copays and gradually phases in different subsidy tiers for drugs (Henry J. Kaiser Family Foundation, 2010). Recognizing that senior citizens were awash in rising costs and deepening complexities, AARP and Walgreens instituted a program whereby Walgreens’ “pharmacy teams” would assist senior citizens with their enrollment in Medicare Part D (Novelli, 2009), (Walgreens Co., 2011).

b. Ways in Which Companies Could Have Anticipated and Prepared for the Trend

Though all sources were studiously limited to the past 5 years, the trends triggering AARP’s/Walgreens’ program developed over decades and are obvious: the rising senior population could be predicted by the high number of “baby boomers”; rising health costs were also apparent, gradually rising from $253 billion in 1980 to $714 billion in 1990 to $2.3 trillion in 2008 (Kaiser Family Foundation, 2010); deepening complications in Medicare Part D were also obvious as each state developed 40 — 50 possible policies from which seniors could their coverage (Medicaid Part D, 2009). Companies could have proactively dealt with these trends by lobbying for simplicity and transparency in Medicare Part D and by educating pre-senior and senior citizens about their options.

2. Internal Actions of a Company Triggering a Trend in the External Environment

a. Example: Johnson & Johnson and the “European GreenLight Programme”

Established in 2000 by the European Commission, the “European GreenLight” Proramme” (GreenLight) is designed to persuade electrical end-users to voluntarily convert their lighting technologies and systems to more efficient technologies and systems, its goal being the eventual transformation of the entire market of electrical end-users. The European Commission established the plan believing that significantly reduced use of electricity would result in “reduced polluting emissions” and significant savings to the participating end-users (European Greenlight Programme, 2011).

Johnson & Johnson Services, Inc. (JnJ), a 125-year-old pharmaceutical company (Johnson & Johnson Services, Inc., 2011), was the first corporation to include “responsibility to the community” in its credo (McClimon, 2010). In 2000, JnJ also became the first company to partner with GreenLight (Eu-GreenLight, 2006, p. 43). Commencing with a pilot program in its Belgium facility, JnJ found that complying with GreenLight led to lower costs for cooling needs and maintenance while improving JnJ employees’ working conditions (Eu-GreenLight, 2006, p. 43) and JnJ reported: “lighting electricity savings: 1.240.000 kWh/year; reduction of electricity use: 40%; energy cost savings: 62.000 euro/year; payback time: 1.5 to 6 years (depending on the project) (Eu-GreenLight, 2006, p. 43). Encouraged by this success, JnJ expanded its use of GreenLight improvements to its facilities in “Austria, Belgium, France, Germany, Ireland, Italy, The Netherlands, Portugal, Spain, Sweden and UK” (Eu-GreenLight, 2006, p. 43).

JnJ’s success apparently started a corporate trend: McDonald’s (Europe) and Nike (Belgium) partnered with GreenLight and won 2005 GreenLight awards (EU-GreenLight, 2011); Philips (The Netherlands) partnered with GreenLight and won 2006 GreenLight awards (EU-GreenLight, 2011); Nestle France (France) and ING Luxembourg (Luxembourg) partnered with GreenLight and won GreenLight awards in 2011 (EU-GreenLight, 2011). In fact, the single source violating the requirement that sources be within the past 5 years indicates that by 2004, GreenLight had 195 corporate “partners” (European Commission DG JRC, 2004, p. 3),

b. Ways in Which Companies Could Have Anticipated and Prepared for the Trend

Companies could have anticipated this trend due to increasing power costs and the global trend toward resource conservation. There is considerable material issued worldwide statistically and graphically showing rising power costs while attempting to deal with the consequences; one example is “A Harbor in the Storm,” an annual report of Action, Inc. dealing with resource conservation issues in a portion of New England (Action, Inc., 2006). Companies could have prepared for this trend by establishing internal teams to study their electrical usage, cooling costs and related employee conditions, then using that data to create and launch internal conservation programs.

Works Cited

Action, Inc. (2006). A Harbor in the Storm: Action, Inc. Annual Report 2006. Retrieved from Action, Inc. Web site: http://actioninc.org/actionAR06.pdf

Eu-GreenLight. (2006). Eu GreenLight Catalogue. Retrieved from Eu-GreenLight Web site: http://www.eu-greenlight.org/pdf/GL_Catalogue/GL_catalog_13.pdf

EU-GreenLight. (2011). GreenLight Program Awards Winners. Retrieved from Eu-GreenLight Web site: http://www.eu-greenlight.org/index.htm

European Commission DG JRC. (2004). Ingineria Iluminatului: Lighting Engineering, Vol. 6, No. 14 — Winter, 2004. Retrieved from Florinpop.ro Web site: http://journal.florinrpop.ro/2004-14/full-volume.pdf

European Greenlight Programme. (2011, November 14). European Greenlight Programme. Retrieved from European GreenLight Programme Web site: http://www.eu-greenlight.org/

Henry J. Kaiser Family Foundation. (2010, March). Focus on Health Reform | Explaining Health Care Reform: Key Changes to the Medicare Part D Drug Benefit Coverage Gap. Retrieved from Henry J. Kaiser Family Foundation Web site: http://www.kff.org/healthreform/upload/8059.pdf

Johnson & Johnson Services, Inc. (2011). Johnson & Johnson History. Retrieved from Johnson & Johnson Services, Inc. Web site: http://www.jnj.com/connect/about-jnj/company-history/

Kaiser Family Foundation. (2010, March). U.S. Health Care Costs: Issue Modules, Background Brief. Retrieved from Kaiser Family Foundation Web site: http://www.kaiseredu.org/Issue-Modules/U.S.-Health-Care-Costs/Background-Brief.aspx

McClimon, T. (2010, August 8). ARTSblog: Blog Archive: Five Trends to Watch in Corporate Social Responsibility. Retrieved from Americans for the Arts Web site: http://blog.artsusa.org/2011/08/08/five-trends-to-watch-in-corporate-social-responsibility/

Medicaid Part D. (2009). Medicare Part D Exclusive Interview | Exclusive Interview with Top Medicare Part D Experts. Retrieved from Medicaidpartd Web site: http://www.medicaidpartd.com/pages/medicarepartdinterview.html

Novelli, B. (2009, April 8). Perspectives: Health Care Reform Hinges on Private-Sector Cooperation. Retrieved from Center for Disease Control Web site: http://www.cdc.gov/pcd/issues/2009/apr/08_0214.htm

Senior Journal. (2011, May 27). Nation’s Population Aging as Senior Citizen Ranks Boom with Boomers; Males Increasing. Retrieved from Senior Journal.com: http://seniorjournal.com/NEWS/SeniorStats/2011/20110527-NationsPopulationAging.htm

Spain, W. (2010, March 23). Walgreen Profit Rises on Margin, Prescriptions. Retrieved from Market Watch Web site: http://www.marketwatch.com/story/walgreen-profit-rises-on-margins-prescriptions-2010-03-23

Walgreens Co. (2011). Flu Shot Program | Community | Social Responsibility | Walgreens. Retrieved from Walgreens Co. Web site: http://www.walgreens.com/topic/sr/sr_giving_back_flu_shot.jsp

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