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04-10-2010
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Corporate Social Responsibility in the Innovation Process.The Danish Case, as a concept
Complimentary work for DEA
Phd. in Management and Marketing
Year: 2008-2010
Department of Management and Marketing
Universidade de Vigo, Spain
Author: JORGE OLIVEIRA TEIXEIRA
Director : PEDRO FIGUEROA DORREGO, Phd
2010/10/05
Contents
1. Introduction to CSR
2. Corporate Social Responsibility
3. Innovation
4. Corporate Social Responsibility and Innovation
5. The Danish Case in CSR and Innovation
6. Notes for future considerations
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2. Corporate Social Responsibility
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2. Corporate Social Responsibility(one definition)
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“An evolving concept, not universally accepted definition;
The way organizations integrate social, environmental andeconomic concerns into their values, culture, decision-making,strategy and operations, and thereby establish better practiceswithin the organization, create wealth and improve society”.
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2.1 Introduction to CSR
CSRVoluntary
CollectiveAgreements
LawRegulated
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2.2 Relationship Between an organizationits stakehoders and society
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2.3 Corporate Social Responsibility activities
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Management
Visions and
values
Stakeholder dialogue
Employee
Customer
Supplier
Community
Environmental
CSR Innovation
Communication
2.4 Corporate Social Responsibility activities
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• Why • What
• When• Who
• Where
Communication
• Who are they• Dialogue and inclusion
• Communication
Stakeholder
dialogue
• Prevention• Retention
• Integration
Employee
activities
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2.4 Corporate Social Responsibility activities
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• Pollution prevention• Waste minimizing
• Reduction of energy, water, etc
Environmental activities
• Community support• Contribution and sponsorship
• Partnerships
Community
activities
• Risk assessment• Guidelines
• Codes of Conduct• Cooperation
Supplier activities
2.4 Corporate Social Responsibility activities
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• Demands from, and dialogue with customers
• Product labels
Customer
activities
• New process• New Products
• New Services• CSR Profile Business models
CSR
Innovation
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2.5 Advantages of Business DrivenSocial Responsibility
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EnhancedProduct
differentiation
Newproducts
GreaterSupplier
relaiability
MoreCommitted
staff
Betterreputation
Lower cost troughEnvironmental
management and reduce energy consumption
RESPONSIBLE
BUSINESS
2.6 The Big picture
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2.7 The CSR Approach
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Business
Sector
Community
•Handle problems•Handle Requests•Avoid bad publicity
•Focus on request•Establish norms•Stand out
•Comply with sector standards
•Go beyond sector standards•Differentiate yourself from other business in your sector
•Await agreements, collective agreementsor statutory requirements
•Contribute to local community•Market yourself on the basis of your contribution
Defensive Offensive
2.8 Cyclical Matrix of CorporateSocial responsibility
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• Corporate governance and economic Responsibility
• Environment Protection and Sustainability
• Ethics and Human Resources
• Social Accountability and Social Investment
Community Workplace
MarketplaceEnvironment
G.K Kanji and P.K. Chopra, 2010
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3. Innovation
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Key definition
An innovation is the implementation of a new or significantlyimproved product (good or service), or process, a newmarketing method, or new organisational method inbusinesspractices, workplace organisation or external relations.
Innovation activities include all scientific, technological, organisational,
financial and commercial steps which actually lead, or are intend to
lead, to the implementation of innovations. Some of these activities
may be innovative in their own right, while others are not novel but
are necessary to implementation.
Oslo Manual 2005
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Types of Innovations
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Marketing
Organization
Process
Product
Oslo Manual
2005
Types ofInnovations
3.1 Types of Innovations
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Radical & Incremental(Tushman & Anderson,1986)
Sustaining and DisruptiveInnovation
(Hockerts & Morsing, 2008)
User-driven Innovation(Von Hippel, 2001)
represent technical advance so significant that no increase inscale, efficiency, or design can make older technologies competitive with the newTechnology
to new customers and so-far un served markets Innovation can also be characterized by its ability to either strengthen a firm's existingcapabilities and market position or to disrupt them by rendering competencies obsolete or reaching out
introduced the notion of (lead) user-driveninnovation to describe the ability of user communities to initiate and develop exceedingly complex products sometimes even without any specific manufacturer involvement
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Elements of a system Innovation
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Cotec, Model 1998
The Innovation measurement Framework
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Oslo Manual, 2005
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4. Corporate Social Responsibility
and Innovation
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The term corporate social innovation is increasingly taken upby practitioners. Patrick Cescau CEO of Unilever for exampledefines corporate social innovation as a way of "finding newproducts and services that meet not only the functional needsof consumers for tasty food or clean clothes but also theirwider aspirations as citizens."(cited in Webb, 2007).
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4.1 The CSR innovation objective field
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In a strategic CSR innovation process, business use theircore competences to develop new concepts, products, etc.
4.2 CSR AND INNOVATION – What is it?
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Literature bringing together CSR and innovation has emerged
gradually over the past decade. One interpretation of “social
innovation” can refer to improvements in the CSR process.
Examples could be improved social reporting tools or CSR
management systems.
Corporate Social Innovation
The term “corporate social innovation” was first introduced byRosabeth Moss Kanter (1999) who argues that firms should usesocial issues as a learning laboratory for identifying unmetneeds and for developing solutions that create new markets.
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4.4 CSR AND INNOVATION – What is it ?
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Social Entrepreneurship
According to Hockerts it describes “the discovery and sustainable
exploitation of opportunities to create public goods”.
This is usually done through the generation of disequilibria in market
and non-market environments. Social Entrepreneurship can in some
cases lead to the creation of social enterprises. These social ventures
are hybrid organizations exhibiting characteristics of both the for-profit
and not for profit sector.
4.4 CSR AND INNOVATION – What is it ?
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Eco-Innovation
The notion that sustainable development drives disruptive innovations
has come quite naturally to the sustainability debate (Hockerts,1999,
2003). Sustainability innovations (also called eco-innovations, eco-
design, eco-preneurship, or cleantechnology venturing) have been
proposed as a source for "environmentally benign growth" (Dyllick,
1994).
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4.5 Base of the Pyramid (BOP)
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An important subtheme of corporate social innovation is thefocus on low-income markets. Prahalad and Hart (1999) talk in thiscontext of the potential of the bottom or base of the pyramid(BOP). Ex: reverse innovation
The BOP premise is that by focusing on the unmet needs of low-income populations firms can create profitable markets while alsohelping the poor address some of their most urgent.
Prahalad’s most notable assumption is that BOP markets have topay a “poverty premium”(This means that many poor have to paymore for products and services such as food, water,medication,credit, or telecommunication, than their middle or upper classcompatriots.
4.6 CSR and Innovation – How Does It Happen?
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5. The Danish Case in CSR and Innovation
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5.1 General Principles
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UN GLOBAL COMPACT
UN PRI
OCDE Guidelines
General principles
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5.2 Key Specific Principles
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UN Environment Programe Financial Iniciative (UNEP FI)
Key specific
principles
The Equator Principles
Global Reporting Iniciative ( GRI)
Transparency International – Business Principles for Countering Bribery ( BPCB)
Carbon Disclosure Project (CDP)
UN Caring for Climate
5.3 The Danish model for CSR in innovation
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Business
Process
Product
CustomerContact
CSR
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5.4 Key Action Areas
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The government wantsbusiness to contribute
actively to tacking global climate challenges
Wants the marketing ofDenmark for responsible
growth to help Danishbusiness reap greater benefits
from their S R work
The government wants to underpin large
business´CSR reports
The state sector also has a number of options for
aiding in disseminatingS R through its own
activities
5.5 Clarification through 12 types of innovation
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Type of Innovation Explanation CSR Example
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5.5a Clarification through 12 types of innovation
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Type of Innovation Explanation CSR Example
• Greater attention to political accountability in the innovation process
• More informed consumers
• Global brands
• The noticeable increase of socially responsible brands
• New consumers trends
• Measure of Corporate Social Performance (CSP).
• Aplication to SME
• Public concern about Corporate Social Responsibility
6. Notes for future considerations
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Q & A05-10-2010
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Thank you for your attention
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Jorge Oliveira Teixeira
jorgeteixeira@accelperiberia.comwww.accelperiberia.comwww.linkedin.com/in/jorgeoliveirateixeira
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Appendix 1
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Appendix 2
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Appendix 3
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Appendix 4
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Appendix 5
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• KEY ACTION AREA 1: PROPAGATING BUSINESS-DRIVEN SOCIAL RESPONSiBILITY
• The Government wants to:
• encourage Danish companies and investors to continue and develop theircommitment and CSR work
• make it mandatory for large business to report on CSR in the management’s reviewof the annual report
• make it mandatory for institutional investors and unit trust to report on CSR in themanagement’s review of the annual report
• set up to the Social Responsibility Council charged with making recommendationsfor the Government, the corporate sector and associations
• establish a new social responsibility communication portal(www.samfundsansvar.dk)
• organize international conference “Danish Business innovating for WorldChallenges” to identify innovation areas for Danish business
• set up a knowledge network among organizations, researchers and advisors onbusinesses-driven social responsibility and responsible supplier management
• advise business though Danish representations in other countries
• work to ensure a transparent market that promotes social responsibilityconsiderations in consumer purchasing. The Government will launch a study ofconsumers‘ role in CSR
• prepare a biennial progress report on Danish businesses’ observance of andcommitment to Global Compact and PRI, first time in 2010
Appendix 6
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• KEY ACTION AREA 2: PROMOTING BUSINESSES’ SOCIAL RESPONSIBILITY THROUGHGOVERNMENT ACTIVITIES
• The Government wants to:
• ensure that, in the future, joint state supply contracts will systematically embed requirements forsocial responsibility as articulated in the conventions that provide the foundation for the UN GlobalCompact
• ensure that all state procurement officers can access the guidelines for embedding socialresponsibility
• open up dialogue with local authorities and regions with a view to disseminating experience inembedding social responsibility in their areas
• make it mandatory for state-owned public limited companies to report to CSR in the management‘sreview for the annual report
• ensure that all major state-owned public limited companies accede to the UN Global Compact
• ensure that the Vækstfonden accedes to the UN principles for responsible investment (PRI)
• ensure that the Eksport Kredit Fonden (EKF) accedes to the UN Global Compact
• continue its work for embedding social responsible in Danish development work
• ensure that the Industrialiseringsfonden for udviklingslande (IFU) and the Investment Fund forCentral and Eastern Europe (Iø) accede to the UN Global Compact
• organize conferences on businesses‘ social responsibility in developing countries jointly withDanish representations outside Denmark, local players and businesses
• ensure that the regional trade and industry development system contributes to propagatingbusiness-driven social responsibility
• strive to ensure that international investment banks embed social responsibility in their businessand investment strategies
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Appendix 7
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• KEY ACTION AREA 3: CORPORATE SECTOR‘S CLIMATE RESPONSiBILITY
• The Government wants to:
• encourage businesses to include sections of climate responsibility in their reports on CSR
in the management‘s review of the annual report (see the mandatory requirement in key
action area 1)
• jointly with Confederation of Danish industries develop the Climate Compass - a web-
based climate tool aimed at helping businesses prepare climate accounts and climate
strategies
• initiate four partnerships on climate responsibility in relations to investors, in the retail
sector, the construction sector and the maritime sector
• KEY ACTION AREA 4: MARKETING DENMARK FOR RESPONSIBLE GROWTH
• The Government wants the marketing of Denmark for responsible growth to help Danish
businesses reap greater benefits from their social responsibility work.
• The Government wants to:
• promote Danish tools and competences in the area of corporate social responsibility
• head up a 2010 international summit on international standards for social responsibility in
Copenhagen (ISO 26000)
• organize an international conference on responsible investments aimed at creating the
basics for better targeted and usability oriented research
Credits
• Draft international Standard ISO/DIS 26000
• Oslo Manual, Guidelines for Collecting and interpreting
Innovation Data
• Action Plan for Corporate Social Responsibility,
The Danish Government, May 2006
• Modelling The Firm in its Markets and Organizational Environment:
methodologies for Studying Corporate Social Respnsibility, Gopal K.
kanji and Parvesh K. Chopra, Total Quality Management.
• Project People & Profit, The Danish Commerce and Companies
Agency
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