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Creating Value via Corporate Social Responsibility

Creating Value via Corporate Social Responsibility. Bradley Googins, Philip Mirvis, Mary Jo Hatch. Traditional View. Global Executives On Role Of Business. Which of the following statements best describes the role that large corporations should play in society.

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Creating Value via Corporate Social Responsibility

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  1. Creating Value via Corporate Social Responsibility Bradley Googins, Philip Mirvis, Mary Jo Hatch

  2. Traditional View

  3. Global Executives On Role Of Business Which of the following statements best describes the role that large corporations should play in society Focus solely on providing highest possible returns to investors while obeying all laws and regulations Generate high returns to investors but balance with contributing to the broader public good Source Dec 2005 McKinsey Quarterly survey of 4,238 global business executives

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  5. What is the meaning of CSR? Source: Fleishman Hillard/National Consumers League study, “Rethinking Corporate Social Responsibility”

  6. 60-70% Expectations Trust 10-20% Societal Views of Large Corporations Around the world... Sources: GlobeScan, Wirthlin, Edelman

  7. Expectations are high for Business Companies “Held Completely Responsible for,” Average of 25 Countries

  8. 2t. I am going to read a list of things some people say should be part of the responsibilities of large companies. For each one, please tell me to what extent you think companies should be held responsible. In answering, please use a scale of 1 to 5, where 1 is “Not held responsible,” 3 is “Held partially responsible,” and 5 is “Held completely responsible.” What about…?

  9. Stages Of Corporate Responsibility

  10. Brands feel the impact as activists target customers Financial Times Brands feel the impact as activists target customers Financial Times CSR from OUTSIDE IN

  11. To be more responsible….

  12. Success in tomorrow’s markets means working with stakeholders to understand, predict, and shape our future environment and ways of living. Tackling important problems together will require teamwork and respect.” Jeff Immelt Current CEO, General Electric

  13. Socially Responsible Business Models

  14. Climate Change Digital Divide, Youth Unemployment, Corruption Nationalization Access to Medicine Access to Credit Piracy Cheap Labor/Sourcing, Obesity/Consumerism, Environmental Damage, Bribery Base of the Pyramid, Micro-Finance, Eco-Effectiveness CSR Partnerships Business And Society: Risk And Opportunities SOCIETY Risk Opportunity BUSINESSS Risk Opportunity Source: Beyond Good Company

  15. Revolutionary Renewal Strategic activities contribute both to repairing and also to building society and environment Sustainable Enterprise All functions and actions are sustainable in economic, social and environmental terms Benefit to Society Social Responsibility Society and environmental initiatives are integral to strategy – “do good” Compliance & Disclosure “Do no harm”Act within legal and ethical codes of conduct Zone of Mutual Benefit Benefit to Business

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  17. CSR creates financial value along 4 dimensions Growth • Novo Nordisk: Earned market leadership in China with market share above 70% New markets New products New customers/ market share • Verizon: Increased sales by $6 million, with potential growth of a new market of over $600 million Innovation Reputation / differentiation Return on capital • Dow: Invested $1 billion over 10 years to reduce its energy consumption and improve its efficiency and has saved $7 billion in last 5 years Operational efficiency Workforce efficiency Reputation/price premium Risk management Regulatory risk License to operate • Nestlé: Earned $4.5 billion in 2007 through the sales of PPP (Popularly Positioned Products) Supply chain/security of supply Reputational risk • IBM: Improved global leadership skills, employee retention and commitment to IBM, new knowledge and skill contribution to IBM Management quality Leadership development Adaptability Long-term strategic view Source: Mirvis/McKinsey Study

  18. Although many companies create value from ESG, very few assess the financial value creation and even fewer communicate that to the markets 5 Creating value Assessing value Communicating value Percent of companies interviewed = 100% ESG program -40% -10% Maximizing value from ESG Established metrics to monitor program -40% -5% Converting ESG metrics to financial value Communicate ESG value to CFOs, investors Source: BCCCC/McKinsey Study

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  20. The Role of Citizenship on Corporate Reputation

  21. J&J Partnership with the American Association of Colleges of Nursing • Linking Johnson & Johnson with: • Caring, Education, and Hospitals • Key Drivers • Standing behind products and services • Vision for the futures • Supporting good causes • Meeting needs 23

  22. Brilliant! Bullshit! Corporate Branding and CSR

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