This document contains a student's proposal for an MBA thesis that will investigate the influence and importance of implementing the SMETA (SEDEX Members Ethical Trade Audit) audit protocol on manufacturing companies in Lebanon. The proposal provides background on SMETA and how it is used internationally to ensure companies meet standards for sustainability, labor, health and safety, environment, and integrity. It outlines the research question of what benefits and drawbacks companies and auditors see from SMETA in Lebanon. The methodology will include interviews with Lebanese companies and auditors, and a review of literature on implementing corporate social responsibility standards in other countries like Peru, Poland, and Africa. The objectives are to promote CSR and sustainability, increase exports, improve worker conditions,
This document contains a student's proposal for an MBA thesis that will investigate the influence and importance of implementing the SMETA (SEDEX Members Ethical Trade Audit) audit protocol on manufacturing companies in Lebanon. The proposal provides background on SMETA and how it is used internationally to ensure companies meet standards for sustainability, labor, health and safety, environment, and integrity. It outlines the research question of what benefits and drawbacks companies and auditors see from SMETA in Lebanon. The methodology will include interviews with Lebanese companies and auditors, and a review of literature on implementing corporate social responsibility standards in other countries like Peru, Poland, and Africa. The objectives are to promote CSR and sustainability, increase exports, improve worker conditions,
Original Description:
Implementation of SMETA Audit Protocol in Lebanese manufacturing companies
This document contains a student's proposal for an MBA thesis that will investigate the influence and importance of implementing the SMETA (SEDEX Members Ethical Trade Audit) audit protocol on manufacturing companies in Lebanon. The proposal provides background on SMETA and how it is used internationally to ensure companies meet standards for sustainability, labor, health and safety, environment, and integrity. It outlines the research question of what benefits and drawbacks companies and auditors see from SMETA in Lebanon. The methodology will include interviews with Lebanese companies and auditors, and a review of literature on implementing corporate social responsibility standards in other countries like Peru, Poland, and Africa. The objectives are to promote CSR and sustainability, increase exports, improve worker conditions,
This document contains a student's proposal for an MBA thesis that will investigate the influence and importance of implementing the SMETA (SEDEX Members Ethical Trade Audit) audit protocol on manufacturing companies in Lebanon. The proposal provides background on SMETA and how it is used internationally to ensure companies meet standards for sustainability, labor, health and safety, environment, and integrity. It outlines the research question of what benefits and drawbacks companies and auditors see from SMETA in Lebanon. The methodology will include interviews with Lebanese companies and auditors, and a review of literature on implementing corporate social responsibility standards in other countries like Peru, Poland, and Africa. The objectives are to promote CSR and sustainability, increase exports, improve worker conditions,
□Banking and Finance □ Marketing □ General Business □ Financial Engineering □ □Public Management □ IBL □ MIS □ Financial Economics □ □Petroleum and Energy Management THE IMPLEMENTATION OF SMETA AUDIT PROTOCOL ON MANUFACTURING COMPANIES OF LEBANON 2. Background
Nowadays, the entire world is changing due to globalization. MNEs (Multinational
Enterprises) and the governments of advanced countries conditions and stipulates most manufacturing organizations to adhere the global standards of sustainability, and to respect all the rules of labor standards, health and safety, environment and business integrity. The SMETA (SEDEX Members Ethical Trade Audit) is an international certificate created by SEDEX (Supplier Ethical Data Exchange). Its mission consists of conducting an ethical audit that serves the well-being of the requirements listed above. The audit firms in Lebanon have the ability and the knowledge to offer this type of audit but the Lebanese government doesn’t oblige the implementation of SMETA Audit Protocol on the manufacturing companies. On the other hand the Lebanese government forces the Lebanese companies to get financially audited.
Nowadays, SMETA is an important certificate for the companies working in the
manufacturing field to be able to sell their products to advanced countries which give utmost importance to social responsibility. This thesis investigates the influence of SMETA Audit Protocol on the Lebanese companies and if it’s important to apply the SMETA audit in Lebanon, four qualitative interviews for four Lebanese companies and for four audit firms, to ask them if the SMETA audit is being implemented in Lebanon, what is the most important benefits and the drawbacks of the SMETA Audit Protocol.
Some requirements of MNEs and big firms contain the implementation of SMETA Audit Protocol as a pre-requisite to make deals with Lebanese local companies which gives this protocol more advantages. In addition, the SMETA Audit achieves the sustainability by the preservation of the environment, and helps the workers to improve their living conditions and gain their rights and encourages the small manufacturing companies to upgrade their products and improve their competitiveness.
I read three relevant articles related to my research, each of these three articles contain the implementation of Corporation Social Responsibility in each country. The First article talks about CSR implementation in Peruvian companies, while the second one targets CSR implementation in Polish companies and the third one CSR implementation in African companies.
In the first article, the author mentions advantages and disadvantages that trouble the execution and mentions the assessment of SMETA audit protocol that investigated in five distinctive organizations situated in Lima, Peru. The purpose of this thesis is to understand how SMETA works (Medina Rodriguez 2016).
After interviewing auditors and companies, we found that, according to them SMETA is a finished standard with rules that once executed, can bring many advantages to them, for example, consumer loyalty, entering new markets, constant improvement, sparing costs, consciousness of their own blemishes and upgrade of reputation. Moreover, they all agreed that SMETA is a very complete standard that incorporates issues of wellbeing and security, work, human rights, condition and morals which are audited later on. They considered that SMETA has expanded since and more Peruvian organizations are actualizing the standard and requiring audits. As for the auditors, they have given their suggestion in respect to a few enhancements or issues that ought to be considered while executing the standard. In addition, they considered that one of the fundamental issues is the absence of responsibility from the management that could affect negatively the implementation of the standard (Medina Rodriguez 2016).
To conclude with, it is recommendable that the organizations make the important
adjustments during the underlying audits of the SMETA. Organizations need to actualize CSR strategies and activities that permit them to get great outcomes in the following SMETA follow-up audit. Moreover, it is important that this standard is not only considered by the organizations itself but also by their suppliers. This would permit them to acquire critical preferences, improve working conditions, improve service quality, upgrade their good reputation, improve their competitiveness and would have greater possibilities of obtaining contracts with other international customers (Medina Rodriguez 2016).
In the second article, they opted ten Polish enterprises, in which social responsibility and environmental awareness are applied from the stakeholders and thus to analyze and limit the impact of business on the environment.
The Market in Poland is gaining a lot of interest in social responsibility. Big and international customers are dealing with the companies that respect environmental standards and have important certifications such as the ones offered by SMETA audit. The European Union imposes to respect the requirements related to the environmental protection and the sustainability.
This study was achieved from 2006 till 2013 on ten Polish manufacturing companies (Misztal and Jasiulewicz-Kaczmarek 2014).
The research consisted in the facts as below:
Access to documentation and records system. Participation and recording the process of external audits in the environmental area. Assessment of the status quo based on observation and interview with the staff. Filling in a checklist with environmental requirements of standards ISO 14001 and CSR. The environmental requirements divided on three key groups of activity first is environmental requirements on a strategic level, second is environmental requirements towards environmental aspects, and finally environmental requirements towards operational activities. And for each key groups of activity has an evidence fulfillment.
The Polish enterprises have shown attention in the three key groups of activity and respect environmental standards (Misztal and Jasiulewicz-Kaczmarek 2014).
In the third article, the author presents the situation of CSR performance in the Saharan Africa. Most of the applicants showed that CSR is not a formal policy in these countries. These countries struggled to make the CSR's application accepted in their constitutions. Many African participants indicated the rights-based policy as a broad challenge of CSR. Some participants in Africa like Nigeria and Ghana viewed CSR from a moral obligation perspective, which is influenced by international advocacy of right-based framework for development. Furthermore, CSR showed by this study is a company initiative in compliance with international code of business conduct. Lack of national CSR policy meant that organizations are a liberty to take individual initiatives, which often do not reflect corporate social responsibility practice. This creates a number of challenges to government companies and host communities where companies operate, with the resulting difficulty in assessing ,monitoring CSR company initiatives from a motivational perspective, the research shows the achievement of simple business operation based objectives with an underlying profit increasing motive are fixed factors why companies engage in CRS in Saharan Africa. CSR reporting in Saharan Africa is specialized by voluntary reporting a country level with financial- based accomplishment, while at the international level, companies have to report in order to secure international accreditations among nations. The issue of bias and small number of countries involved in the study may constitute some restrains, this study could have policy suggestions for both executive and national parliaments in developing countries in initiating appropriate legal framework and enabling legislations to support CSR practice (Samy, Ogiri, and Bampton 2015). 3. Problem Statement
3.1 Research Question:
What is the influence of SMETA Audit Protocol on the Lebanese companies? What are the most important benefits and drawbacks of SMETA Audit Protocol? Is it important to apply SMETA audit in Lebanon?
3.2 Research Objectives:
We have various objectives for this research to be achieved by Lebanese manufacturing companies that apply SMETA audit, the most important of them:
To Apply the CSR in Lebanon.
To achieve the sustainability. To increase the exports of Lebanese manufacturing companies. To help the workers improve their living conditions and gain their rights. To verify business integrity. To preserve the environment. To integrate a green initiative that enhances the image of local companies worldwide. 4. Methodology
4.1.1 Philosophies
According to my research question, I will study the behavior of each Lebanese manufacturing company, and I will oversee if these are using any protocol or codes like SMETA audit to achieve Corporation Social Responsibility and sustainability. I will take the evidence from the audit firms to make sure if the SMETA audit protocol are applied in Lebanon, therefore this study or this thesis depends on pragmatism philosophies because I use the behavior of Lebanese manufacturing companies and evidence from audit firms, in this way I mixed between two philosophies named by positivist and interpretivism.
4.1.2 Approaches
The theory of the thesis is: The SMETA audit protocol ameliorates labor standards, health, safety, environment and business integrity. The advantages of this protocol are: Reducing audit fatigue, getting the products internationally recognized and achieving the sustainability. I will be interviewing managers from each manufacturing company and ask about the implementation of CSR through the SMETA audit protocol. I will also be interviewing the audit firms to ask about any implementation of SMETA audit in Lebanon. Moving from theory to implementation means that the approach is deductive.
4.1.3 Strategies
I will study the ethical wise of Lebanese manufacturing company and i will compare the result with other countries according to my literature review and other articles that studied the implementation of CSR in several countries. This diversity and helicopter view over many ethnic backgrounds and various countries implies that the strategy is ethnographic. I will also try to request archival information from audit firms to cover an archival research in my methodology. 4.1.4 Choices
Given the purpose of the research, I’ve chosen the qualitative method. I will be doing interviews with four Lebanese Manufacturing Companies followed by four Lebanese audit firms.
The four Lebanese manufacturing companies are:
Name of companies Industry Gemayel Freres s.a.l. Production of cardboard St. Thomas s.a.l. Production of wine Aoun Corporation Production of marble Lebanon Fruit s.a.l. Production of juice and other beverages
The four audit firms are:
Name of companies PWC (Big four) HLB Fiducia BDO – Semaan Gholam & Co Ernst & Young (Big four)
4.1.5 Time horizons
The period in which interviews and studies will be conducted in both manufacturing companies and audit firms will be the same to ensure completeness and accuracy in both results. Therefore we will be choosing the fiscal year 2019 for example for both companies and audit firms to perform the study.
4.2 Participants
The research project is based on interviews and on meeting Lebanese manufacturing
companies to ask them if SMETA audit protocol implemented in their companies, or if they are using any other ethical protocol to achieve CSR. We adopted four Lebanese manufacturing companies each one in a different industry, and four audit firms some local and others international divided as follows:
The Lebanese manufacturing companies are:
Names of the companies Industry Gemayel Freres s.a.l. Production of cardboard St. Thomas s.a.l. Production of wine Aoun Corporation Production of marble Lebanon Fruit s.a.l. Production of juice and other beverages
The four audit firms are:
Name of companies PWC (Big four) HLB Fiducia BDO – Semaan Gholam & Co Ernst & Young (Big four)
These four manufacturing companies have been chosen randomly and each one from a different industry. The manufacturing companies in Lebanon are very limited due to Lebanon’s economic policy that depends on services sector more than manufacturing. And I have chosen four audit firms local and international to confirm the implementation of SMETA audit protocol or any protocol that applies CSR and achieves environmental sustainability.
4.3 Techniques
I will do four interviews with four Lebanese manufacturing companies. First, I will take an appointment with each company’s manager to ask him several questions related to my research question and research objectives. The questions taken into consideration are as follow: According to your company’s activities, do you apply Sustainability and Corporate Social Responsibility? Do you apply SMETA audit protocol in your company? When you applied SMETA audit protocol, did you notice an amelioration in the product’s quality? Did turnover increase when you applied SMETA audit protocol, specifically exports? Does SMETA audit application effect on benefits? Do you respect all the rules of labor standards, health and safety, environment and business integrity? In the same period I will do another four interviews for four audit firms, to ask them questions related to my research question and research objectives. The questions are as follow: Is SMETA audit applicable in Lebanon? How many manufacturing companies applied this protocol? Does the application of SMETA audit protocol take time? Is there any protocol related to ethical audit applicable in Lebanon?
When I finish my interviews, i will organize the information in the table and then I will analyze all the data to conclude a result for my thesis.
All these interviews are semi structured, a lot of the content can be modified, and duration of each interview ranges between 10 minutes and 15 minutes.
4.4 Ethical considerations
The most important part of my research is the ethical, especially when I do the interviews, all the information remain confidential and I use it only in my thesis. As for the identities of the managers, they shall also stay a secret. I will send by email the objectives of my thesis to the manufacturing companies and the audit firms to support me in my interviews. 5. Timescale
6. Resources
My resources come from my experience and from the E-services offered from the university (Universite La Sagesse). Reading many thesis and articles related to my topic and to my research objectives will also come in handy. The site of the SMETA audit can help me and I can always surf the web looking for key terms related to my research proposal. 7. References
Medina Rodriguez, Alicia. 2016. “The Application of the SMETA Audit Protocol on the Management of the CSR of Peruvian Companies: A Case Study of Standardization via SMETA in Manufacturing Companies.”
Misztal, Agnieszka, and Małgorzata Jasiulewicz-Kaczmarek. 2014. “Environmental Issues
of the Corporate Social Responsibility.” Management 18(1):58–70.
Samy, Martin, Henry Itotenaan Ogiri, and Roberta Bampton. 2015. “Examining the Public Policy Perspective of CSR Implementation in Sub-Saharan Africa.” Social Responsibility Journal.
