The social license to operate is any more than an exercise in rhetoric because it ensures the inculcation of a healthy working environment for the company. Moreover, the local community is allowed to contribute to and determine the course of the activities taking place in their locality hence ensuring the best interests are upheld. The social license for one to operate refers to a prerequisite approval that a company has to acquire before their being allowed to operate in areas or territories of indigenous people. For instance, a company intending to put up a plant within a certain locality will have to consider the views of the community. An example is the establishment of a quarry within a certain place, as much as the company would have the government’s approval, it should first enquire on the inhabitants if they accept such a facility to be established in their locale. To acquire this licensing, the company has to get free, prior and informed consent from the indigenous people about their operations within their locality.
The reason why the licensing is needed is that it would inform the indigenous people concerning the effects of the programs or the activities, which would be carried out in their locality. As such, they will be better placed to respond to the challenges, which may emanate from the practice. This type of licensing is based on the principle of informed consent (Wilburn & Wilburn, 2011).
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There is a myriad of barriers encountered in the acquisition of the social license to operate. For instance, the nonexistence of the guidance on how the company can go ahead with their negotiations has meant that the process is not uniform. Apart from that, the company seeking the approval may be incapable of understanding the social profile of the community and as such creating a challenge in the establishment of social legitimacy (a strategic component in the company community relationship) (Boutilier & Thomson, 2011). Moreover, the company may allocate insufficient time for the interaction with the local community. This implies that the company may not acquire enough information concerning the community and the community, on the other hand, may not have sufficient t information to make informed consent concerning the operations. In the case of non-indigenous and large communities, the lack of a centralized leadership makes the negotiation process difficult. This is because the negotiations for the licensing will have to involve many people. In this situation, the chances are that a segment of the community may approve the licensing at the expense of the rest of the community members (O'Brien et al., 2015).
Corporate social responsibility a subject of affiliate management is a strategy aimed at pacifying and giving back to the society. This management concept promotes this social license to operate as the latter is purely in place for the welfare of the community. As stated above, the social license to operate entails the protection of the interests of the indigenous people within a certain location earmarked for development. The fact that through it the company seeks the approval of the community is in a way meant to safeguard the welfare of the community members. The social responsibility as such complements the functions of the corporate social responsibility (Epstein & Buhovac, 2014).
Authoritative management, on the other hand, seeks to empower the leader in the management process. In this scenario, the managers have the final say as far as the running of the company is concerned. The requirement that the management acquires consent from the community before embarking on their activities will receive minimal attention from the leadership of an organization with such a management strategy. This stems from the fact that the management will deem itself as having the final say about matters affecting the company (Baumann-Pauly et al. 2013).
From the evidence highlighted above social license to operate is a vital element in the operations of a company. Not only does it help in pacifying the concerns from the locals but it also ensures the commitment and support of the society in the operations of the former. As such, it should be encouraged and implemented for optimizing company operations and the safety of the community.
References
Baumann-Pauly, D., Wickert, C., Spence, L. J., & Scherer, A. G. (2013). Organizing corporate social responsibility in small and large firms: Size matters. Journal of Business Ethics, 115 (4), 693-705.
Boutilier, R., & Thomson, I. (2011). Modeling and measuring the social license to operate: fruits of a dialogue between theory and practice. Social Licence.
Epstein, M. J., & Buhovac, A. R. (2014). Making sustainability work: Best practices in managing and measuring corporate social, environmental, and economic impacts. New York: Berrett-Koehler Publishers.
O'Brien, J., Gilligan, G., Roberts, A., & McCormick, R. (2015). Professional standards and the social licence to operate: a panacea for finance or an exercise in symbolism? Law and Financial Markets Review, 9 (4), 283-292.
Wilburn, K. M., & Wilburn, R. (2011). Achieving social license to operate using stakeholder theory. Journal of International Business Ethics, 4 (2), 3.
