strategic csr professor mcelhaney february 4, 2009
TRANSCRIPT
Strategic CSRProfessor McElhaneyFebruary 4, 2009
CSR in the News (according to Omar)
The non-profit sector’s problems have not gone unnoticed: a majority of Americans has serious reservations about the performance of charitable organizations.
• Americans’ Perceptions of Charitable Organizations▫ think charitable organizations waste a great deal or fair amount of money.▫ have little to no overall confidence in charitable organizations.▫ think charitable organizations do a very good job running▫ their programs and services.▫ think charitable organizations do a very good job▫ spending money wisely.▫ think charitable organizations do a very good job being▫ fair in their decisions.
Source: NYU Wagner Organizational Performance Initiative Research Brief #1, August 2006; internal estimates
Edelman Trust Barometer 2009
Trust at all-time low(lower than post-Enron)
Edelman Trust Barometer 2009
Want government regulations
Edelman Trust Barometer 2009
Will (want to) act personally
Edelman Trust Barometer 2009
Need to hear CSR messages repeated.
CSR in the News
•Fit?▫http://online.wsj.com/article/SB123291980
298913525.html#articleTabs%3Dvideo
CSR in the News- YOU?
Assignment For Next Monday
• Half of you (last names A-M) read Sun’s CSR Report
• Half of you (last names N-Z) read Chevron’s CSR Report
• Conduct report analysis for in-class discussion on Monday, February 9, 2009
CSR Report Analyses
• What are the report's strengths & weaknesses? What are your specific recommendations for improvement?
• Did the report change your opinion of this company? • Would the report change your likeliness to work for this company, or
purchase their goods/ services as a consumer?• Based on the report, what do you think are the key issues for this industry
and how well is this company addressing these issues?
Also consider the following issues:
▫ Does/ how does the company define CSR? How evolved is the company’s view of CSR? ▫ How integrated is their CSR strategy? Is it aligned with core business objectives, core
competencies?▫ How sustainable is their CSR strategy?▫ What are the metrics for success? How do they measure their CSR impact?▫ Who seems to be the targeted audience(s)? Is this clear from the report?▫ What are the opportunities associated with their CSR strategy? Risks? Strengths? Weaknesses??▫ From a pure document aspect, assess the strengths and weaknesses of the report?
Strategic CSR Frameworks & Tools (continued)
Whirlpool
+
ECONOMICECONOMICSOCIALSOCIAL
“PEOPLE, PLANET, PROFIT”
Framework #1: Triple Bottom Line
ENVIRONMENTALENVIRONMENTAL
Framework #2: Internal & External CSR
Supply Chain
Environment
Transparency
Human Rights
Stakeholder Engagement
Privacy
Marketplace
Community Involvement/ Investment
GovernanceMission, Vision, Values
Ethics
Diversity
Health & Wellness
Dependent Care
Downsizing & Layoffs
Privacy (employee)
Work Life Balance
Job Satisfaction
Compensation/ Benefits
PhilanthropySocio-political Issues
Reporting
Accountability
Framework #3: Modified BITC
• Employees• Retirees/ alumni• Recruits
Workplace
Marketplace
Environment
Community
• Clients/customers• Regulators/
legislators• Investors• Academics• Suppliers
• Communities in which we live and work
• Not-for-profit and non-governmental organizations that support communities• Physical environment
• Not-for-profit and non-governmental organizations that support the environment
Framework #4: Legal and Moral Liability
SustainAbility, Executive Summary: The Changing Landscape of Liability, January 21, 2005
Nestle & Maslow
Framework #5: Risk-Opportunity Continuum
• Use core assets in a positive way, to improve underlying business context
• Take a big-picture view• Go beyond compliance• Lift or stabilize
reputation
• Prevent damage to reputation
• Forestall the negative use of core assets
• Focus on compliance and managing legal liability
MINIMIZE RISK
MAXIMIZEOPPORTUNITY
Framework #6: Shared Value“The essential test that should guide CSR is not whether a cause is worthy but whether it presents an opportunity to create shared value – that is, a meaningful benefit for society that is also valuable to the business.”
Source: Porter, Michael E. and Mark R. Kramer, “Strategy & Society: The Link Between Competitive Advantage and Corporate Social Responsibility,” Harvard Business Review, 2006
Generic SocialIssues
Social issues that are not significantly affected by a company’s operationsnor materially affect its long-term competitiveness.
Value Chain SocialImpacts
Social issues that are significantly affected by a company’s activities in the ordinary course of business.
Social Dimensions of Competitive Context
Social issues in the external environment that significantly affect the underlying drivers of a company’s competitiveness in the locations where it operates
Framework #6.5: Changing the Game
“Offensive CSR can distinguish a company’s reputation but cannot protect it; defensive CSR can protect a reputation but cannot distinguish it. Both are necessary to succeed in today’s business climate.”
- Kramer & Kania, Changing the Game
Designing a CSR Structure: Nine Steps (BSR)
1. Understand drivers (internal & external)2. Identify key CSR issues3. Identify & evaluate stakeholders4. Identify current functions supporting CSR5. Analyze current CSR systems, culture6. Design CSR structure7. Develop effective staffing plan8. Create cross-functional system9. Match budget to best framework
Stages of corporate citizenship: BC CCC
Stages of CSR—Zadek
• Defensive▫ “It’s not our job to fix that”▫ Company faced with pain, criticism, reacts defensively
• Compliance▫ “We’ll do just as much as we have to”▫ Cost of doing business, do just as much as need to
• Managerial▫ “It is the business”▫ Moves CSR to core business managers & functions
• Strategic▫ “It gives us a competitive edge” ▫ Realigns strategy to use CSR as competitive advantage
• Civil ▫ “We need to make sure everyone does it”▫ Need to involve all in sector, collective action
A CSR Continuum
Level of engagement Low High
Importance to mission Peripheral Strategic
Magnitude of resources Small Big
Scope of activities Narrow Broad
Interaction level Simple Intensive
Managerial complexity Infrequent Complex
Strategic value Modest Major
EXAMPLES ACTIONS: • Donation• Grants
• Event sponsorship• Cause-related marketing• Employee volunteerism
• Joint-advocacy• Joint-action• Deep partnerships• Financing principles
Philanthropic Transactional IntegrativeGrowth stage:
Adapted from The Collaboration Challenge, James E. Austin