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Corporate Responsibility and Society MNGT 5990. Fall 2013 - Shanghai , PRC Robert Serben, Ph.D. Week 4 –Strategic Context. This week. Ideally, strategy should…. …appeal to multiple stakeholders. Aligned. Vision: Why the organization exists. Mission: What will do done to attain vision.
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Corporate Responsibility and SocietyMNGT 5990 Fall 2013 - Shanghai, PRC Robert Serben, Ph.D. Week 4 –Strategic Context
This week MNGT 5990. Corporate Responsibility and Society
Ideally, strategy should…. …appeal to multiple stakeholders Aligned Vision: Why the organization exists Mission: What will do done to attain vision Strategy: How to achieve vision and mission Tactics: Actions to implement strategy MNGT 5990. Corporate Responsibility and Society
Ideally, strategy should be…. • Simply expressed • Reflective of reality • Measurable • Executable • Known by stakeholders But… MNGT 5990. Corporate Responsibility and Society
…things are changing Economist Intelligence Unit. "The Complexity Challenge: How Businesses Are Bearing Up." The Economist, Spring 2011. Web. 29 May 2013. <http://www.managementthinking.eiu.com/complexity-challenge.html>. MNGT 5990. Corporate Responsibility and Society
Not everyone understands Economist Intelligence Unit. "The Complexity Challenge: How Businesses Are Bearing Up." The Economist, Spring 2011. Web. 29 May 2013. <http://www.managementthinking.eiu.com/complexity-challenge.html>. MNGT 5990. Corporate Responsibility and Society
What’s going on Economist Intelligence Unit. "The Complexity Challenge: How Businesses Are Bearing Up." The Economist, Spring 2011. Web. 29 May 2013. <http://www.managementthinking.eiu.com/complexity-challenge.html>. MNGT 5990. Corporate Responsibility and Society
Strategy and CSR Employees Strategy Community Suppliers Competitive environment Customers Strategies are executed in a stakeholder environment MNGT 5990. Corporate Responsibility and Society
CSR filter 1)Strategies are executed in a stakeholder environment 2) As the condition of stakeholders change, the definition of social harm may change Benefit: CSR filter keeps strategic plans in tune with evolving stakeholder concerns MNGT 5990. Corporate Responsibility and Society
Strategic CSR Strategy: how a business competes in the marketplace CSR: Considers the impact on stakeholders 1 Strategy SCSR CSR SCSR: intersection of the two 2 CSR filter WHY? 3 MNGT 5990. Corporate Responsibility and Society
Five driving forces of CSR • Growing affluence • Ecological sustainability • Globalization • Free flow of information • Value of brands MNGT 5990. Corporate Responsibility and Society
The CSR hierarchy – p.6 Discretionary Responsibilities Strategic CSR Ethical Responsibilities Legal Responsibilities Economic Responsibilities MNGT 5990. Corporate Responsibility and Society
Affluence MNGT 5990. Corporate Responsibility and Society
Affluence By 2030, the World Bank estimates there will be some 1.2 billion middleclass consumers globally and overall emerging markets will play a larger role. Economist Intelligence Unit. "Service 2020: Megatrends for the Decade Ahead." The Economist, July 2011. Web. 29 May 2013. <static.bdo.uk.com/.../Service_2020_megatrends_for_the_decade_ahead....>. MNGT 5990. Corporate Responsibility and Society
Sustainability • “Sustainable development is development that meets the needs of the present without compromising the ability of future generations to meet their own needs.” • Gro Harlem Bruntland. 1987 Bruntland Report MNGT 5990. Corporate Responsibility and Society
Costa Coffee MNGT 5990. Corporate Responsibility and Society
http://www.costa.co.uk/costa-coffee/responsible-coffee/ MNGT 5990. Corporate Responsibility and Society
What companies can do in the future to remain competitive(2020 Megatrends) • “Recognize that service will be the most important competitive differentiator in the future. 55% of respondents expect to compete on service in 2020, well ahead of quality (33%) and price (9%) • Track feedback and complaints. 48% more of those companies that provide excellent service have developed proper feedback and complaints systems in place. They're also more likely to use them for identifying service weaknesses. • Empower your employees. 76% of leading companies have devolved decision making to their staff, compared with 44% of the others. They prioritize training and defining service standards and goals over investing in standardized service processes. • Look at information-enabled customers rather than technological changes. In other words, the technology behind social media is secondary to what it allows customers and organizations to do.” MNGT 5990. Corporate Responsibility and Society
Ecological sustainability Climate change Resource depletion MNGT 5990. Corporate Responsibility and Society
Remember - Walmart and sustainability • Walmart’senvironmental goals • “To be supplied 100% renewable energy • To create zero waste • To sell products that sustain our resources and environment” MNGT 5990. Corporate Responsibility and Society
The “market” for sustainability • “Perhaps more interesting is the fast emerging trend of sustainability being seen as a source - even the source -of revenue and business growth.” • Accenture. "Long-term Growth, Short Term Differentiation and Profits from Sustainable Products and Services. a Global Survey of Business Executives." Accenture, 2012. Web. 29 May 2013. <www.accenture.com/.../PDF/Accenture-Long-Term-Growth-Short-Term-...>. MNGT 5990. Corporate Responsibility and Society
The “market” for sustainability • Accenture. "Long-term Growth, Short Term Differentiation and Profits from Sustainable Products and Services. a Global Survey of Business Executives." Accenture, 2012. Web. 29 May 2013. <www.accenture.com/.../PDF/Accenture-Long-Term-Growth-Short-Term-...>. MNGT 5990. Corporate Responsibility and Society
The “market” for sustainability • Accenture. "Long-term Growth, Short Term Differentiation and Profits from Sustainable Products and Services. a Global Survey of Business Executives." Accenture, 2012. Web. 29 May 2013. <www.accenture.com/.../PDF/Accenture-Long-Term-Growth-Short-Term-...>. MNGT 5990. Corporate Responsibility and Society
Globalization – and local Stakeholder access to information 1. Industrialization 2. International trade 3. Globalization Time/extent of globalization MNGT 5990. Corporate Responsibility and Society
Internet growth MNGT 5990. Corporate Responsibility and Society
Free flow of information • Empowered consumers • Increased the influence of NGOs • Enhanced the power of the media MNGT 5990. Corporate Responsibility and Society
Stakeholder perspective– in action May 15, 2013 http://abcnews.go.com/Blotter/wal-mart-fires-supplier-bangladesh-revelation/story?id=19188673 MNGT 5990. Corporate Responsibility and Society
Free flow of information • “Businesses spend millions to cultivate the reputations; now consumer evaluations can make or break them instantly.” • Amazon.com – ratings • iTunes Apps – ratings • Service companies - ratings MNGT 5990. Corporate Responsibility and Society
Value of brands • Positive brand building • The body shop • Brand insurance • Nike • Crisis management • Tylenol – 1982 MNGT 5990. Corporate Responsibility and Society
Brand valuations Web location: http://www.slashgear.com/apple-and-google-rated-as-top-two-most-valuable-global-brands-22283092/ MNGT 5990. Corporate Responsibility and Society
“Green washing” • An abuse of CSR • Definition: • The act of misleading consumers regarding the environmental practices of the company or the environmental benefits of a product or service. (p.109) MNGT 5990. Corporate Responsibility and Society
Green washing • Six “sins” • Hidden trade-off • No proof • Vagueness • Irrelevance • Fibbing • Lesser of the two evils • Web location: http://sinsofgreenwashing.org/findings/the-seven-sins/index.html MNGT 5990. Corporate Responsibility and Society
Green washing – consequences? “The notion of green washing was born from a critical view of companies’ environmental responsibility and focuses on why the public should be skeptical of companies’ green claims. The term was coined in the 1980s by Jay Westerveld who saw the inconsistency in hotels that didn’t have recycling programs but encouraged the reuse of towels (Romero, 2008). Westerveld accused hotels of making false claims about being environmentally responsible because hotels only adopted environmentally responsible practices that would reduce costs.” DervilleGallicano, Tiffany. "A Critical Analysis of Green washing Claims." Public Relations Journal 5.3 (2011): 2. Web. 24 May 2013 MNGT 5990. Corporate Responsibility and Society
The Strategic CSR model – page 111 Vision statement Mission statement Strategy External environment Internal competencies Corporate operations Strategic imperatives Strategic initiatives MNGT 5990. Corporate Responsibility and Society
Sustainability • Australia will begin pricing carbon in July 2012 • Australian firms feel less prepared now than last year for a low carbon future • More Australian firms are taking action to prepare for carbon pricing…. • Carbon pricing is here to stay… Price uncertainty… biggest barrier to progress • The corporate carbon agenda has shifted towards cost reduction Economist Intelligence Unit. "Cleaning Up: Australia's Readiness for a Low Carbon Future. 2012 Progress Report." The Economist, May 2012. Web. 29 May 2013. http://www.managementthinking.eiu.com/cleaning-2012-progress-report.html MNGT 5990. Corporate Responsibility and Society
Risk management www.hks.harvard.edu/m-rcbg/.../workingpaper_10_kytle_ruggie.pdf MNGT 5990. Corporate Responsibility and Society
From the syllabus – course grading MNGT 5990. Corporate Responsibility and Society
Weeks 7 and 8 • Week 7 – September 28 • Team presentations • Week 8 – October • Review for final exam MNGT 5990. Corporate Responsibility and Society
Online documents MNGT 5990. Corporate Responsibility and Society
Presentation structure: Your team will offer a PowerPoint presentation to address seven CSR strategy questions. The PowerPoint will act as guide the audience’s visual guide to your presentation. You will have up to 20 minutes for your presentation. At the conclusion of your presentation, your team will offer to address questions from either the professor or class members. Team presentation – week 7 MNGT 5990. Corporate Responsibility and Society
PowerPoint format: Every team presentation will have a title slide with the title of your presentation, the name of your firm, the number of your class team. The second page will contain the name (printed in English) and student number of you team. Every PowerPoint slide will be numbered. Team presentation – week 7 MNGT 5990. Corporate Responsibility and Society
Evaluation Your team’s presentation will be evaluated on: Participation in the presentation by all team members Quality and specificity of information presented in the questions addressed by your presentation Use of course concepts and principles in the presentation Team presentation – week 7 MNGT 5990. Corporate Responsibility and Society
A copy of your team’s presentation will be sent to the professor prior the Saturday it is presented Team presentation – week 7 MNGT 5990. Corporate Responsibility and Society
Next week MNGT 5990. Corporate Responsibility and Society