corporate citizenship- final
TRANSCRIPT
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Corporate Citizenship
Making the Business Case.
Public Affairs Management, New Delhi
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Milton Friedmans position that the responsibility ofbusiness is exclusively to maximize profit forshareholders, has lost the debate. Alice Tepper-Marlin, President, Council on Economic
Priorities
If we are the leading corporate citizen --- we will
attract better employees and the highest caliber ofpeople. Theyre going to want to come work for acompany like Ford. William Clay Ford. Jr., Ford Motor Company
The 21 st Century company will be different. Many ofBritains best -known companies are recognizing thatevery customer is part of the community and thatsocial responsibility is not an optional extra. Tony Blair, Prime Minister of United Kingdom
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What is Corporate Citizenship:
To manage effectively a companys actual andpotential economic, environmental, and social
impacton the COMMUNITIES where it operatesand on SOCIETY as a whole,
while enhancing corporate REPUTATION and increasing PROFITS.
STRATEGIC PHILANTHROPHY
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Whats behind the timing?
1. Globalization and growth in competition2. Increased size and influence of companies,
particularly through mergers and acquisitions3. Retrenchment or repositioning of government
and its roles4. Information
5. War for Talent 6. Growth of global civil society activism7. Increased importance of intangibles
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Business Goals of Social Investments
Enhance Corporate ImageDevelop Trust in the CompanyDevelop Local Talent
Support Programs with Specific Goals
Improve Ability to Recruit Protect Current Investment
Retain Employees Broaden Tax Base
Expand Customer Base Create New Markets
Meet Compliance Requirements Operate More economically
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Business Impact Of Corporate
Citizenship
Reputation DevelopmentRisk ManagementProduct, marketing and distribution innovation
Organization and network developmentStrategic design and management
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The 10 Largest Corporate Contributors(U.S.: 1996)
($ Millions)Merck & Company 140.5IBM 100.8 Johnson & Johnson 88.5
Pfizer Inc. 85.5 Hewlett-Packard 71.6 General Motors 66.7
Eli Lilly 66.3 Bristol Myers Squibb 64.7 Microsoft 59.2 Intel 55.6
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10 Largest Corporate FoundationsBy Total Grants (U.S. : 1996)
Foundation Grant ($) AT&T 37,738,769Wal-Mart 32,571,556
Ford Motor Company 28,948,869 GE 28,637,618Proctor & Gamble 27,341,322General Motors 27,041,994 GTE 23,558,526General Mills 23,000,048Chrysler Corporation 22,701,371
SBC 21,261,053
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Corporate Leaders in Educational Reform:
Arthur Anderson Community Learning Center AT&T Learning Network Bell Atlantic Project Explorer
Bell South Superintendents Leadership Network Hewlett-Packard E-Mail Mentor ProgramIBM Corporation Reinventing Education GrantMicrosoft Corp. teacher.training@microsoft Panasonic Foundation Partnership ProgramUnited Airlines Virtual Trade Mission **Aditya Birla Group Aditya Birla India Centre,
London Business School
mailto:teacher.training@microsoftmailto:teacher.training@microsoft -
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Managerial Challenges forCorporate Citizenship
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Managing New Directions
Mix cash, product, people, servicesIntegrate branding,marketing, image andreputation with community
Focus on long-term nonprofit/NGO partnershipsGlobal scope, local emphases
Even more alignment with business
Venture philanthropySocially responsible / sustainable investing
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Key Steps in New Citizenship
Define principles and values Define stakeholders Define key issues for stakeholders
Define and apply measures Benchmark performance Assess performance
Source: The Corporate CitizenshipCompany, David Logan
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Managerial Challenges
Measuring and reporting value ( e.g..Triple Bottom Line)Doing more with same or lessStrategic use of technologyStaying focused
Communicating values across cultures /applying global frameworksLinking programs with values
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Managerial Positions Before
Senior Vice President, CommunityActivities
Vice President, Corporate CommunityRelations
Vice President, Philanthropy
Vice President, Corporate SocialResponsibility
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Managerial Positions Emerging
President, International Foundation
Vice President, Global Community Affairs
Vice President, Global Social InvestmentVice President, Stakeholder Relations
Director, Community Partnerships
Director, Emerging Issues
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Critical Success Factors
Top level Leadership and CommunicationTransparency
Stakeholder EngagementManagement SystemsPerformance MeasurementConsistencyInternal buy-in and coordinationAlign message and performance
Source: Enron
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Facts to Remember
1. CEOs say the environment & sustainabledevelopment is the prime future success factor
2. Boards say citizenship on their agenda or basis of adecision in past six months
3. Managers say challenge is growing one globalidentity and integrating with business decisions
4. All agree reputation, image, brand, and talent
recruitment are major drivers
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Corporate Citizenship in the 21st Century
Demonstrate commitment to societys values
Insulate society from negative impacts ofoperations, products, and services
Share benefits with stakeholders and
shareholdersDemonstrate do well by doing good
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New Roles of Business inSociety
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The Body Shops Key Principles
The relationship between value creation andresource consumption determines sustainablesuccessMeasuring the broader impact of business is key tocontinuous improvementBusiness success is dependent on relationships
with key stakeholders
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Shells Strategy Principles
Key audiences are special publics - the opiniondriversSocial responsibility is just one issue: addressing
all reputation components requires a PR-ledapproachGlobalization of special publics needs a globalstrategy with local nuance
Centre-led but operation unit ownedCredible engagement on an adult to adultapproach
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Redefining Corporate Excellence
Traditional Formula
Excellence = f [ Turnover
ProfitabilityExportsSalesCosts . ]
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New Economy DefinitionExcellence = f [ Business Conduct
Business EthicsShareholder ValueCRMCorporate Governance
Employee BrandingSocially Sensitive Investment FundsPeople PracticesInnovation
ImaginationSpeedTechnologyNetworked Culture
Knowledge Management ..]
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Key Players / StakeholdersE = f [ Corporate Leaders
Civil societyNgos Mncs
Think-tanksdonor AgenciesHR Specialists ]
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Trendsin Glo b al Corp o rate
Ci t izenship
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The increasing tendency to look to corporations, notgovernment, for leadership in social and environmental problems
Philanthrophy will increasingly be required to make a strategiccontribution to business by leading to enhanced reputations andfinancial gain
Strategic Philanthropy and corporate citizenship will go global
More companies will accept and value a broadened social andenvironmental performance role
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Shareholder activism and socially screened investment funds will
proliferate.
Positive corporate images will continue to influence consumerchoice.
NGO partners will serve as informal consultants to business
Corporate conduct will come under increased scrutiny fromcompetitive high-tech media, which will monitor and exposeirresponsible practices.
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The business of auditing corporate performance will expandbeyond financial statements to social and sustainable developmentperformance reporting
Employees will be more attracted to socially responsiblecompanies.
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Public Affairs ManagementD-3/3492 Vasant Kunj
New Delhi 110 070 (India)email : [email protected]