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Strategic Corporate Social Responsibility Professor Kellie A. McElhaney 2.11.07

Exploring Social Responsibility Within Your Organization

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Page 1: Exploring Social Responsibility Within Your Organization

Strategic Corporate Social Responsibility

Professor Kellie A. McElhaney2.11.07

Page 2: Exploring Social Responsibility Within Your Organization

Every single pressing social and global issue of our time is a business opportunity.

Management is a matter of world affairs.

- Peter Drucker

Page 3: Exploring Social Responsibility Within Your Organization

Whirlpool & Habitat for Humanity

Page 4: Exploring Social Responsibility Within Your Organization

Whirlpool

Page 5: Exploring Social Responsibility Within Your Organization

The State of 2007: How Many Business Opportunities Do You See?

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Wal-Mart Has Entered…WSJ

Wal-Mart, infamous for its truculence on CSR, astounds observers with its $500M announcement of broad commitments to environmental and social responsibility. These include: 100% renewable energy Zero waste Reducing greenhouse gas emissions by 20% (by

2012) Increasing minimum wage Increasing the percentages of women and minority

managers…

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“As one of the largest companies in the world, with an expanding global presence, environmental problems are OUR problems. The supply of natural products (fish, food, water) can only be sustained if the ecosystems that provide them are sustained and protected. There are not two worlds out there, a Wal-Mart world and some other world.” – Lee Scott, CEO

Page 8: Exploring Social Responsibility Within Your Organization

GE Said Green is Green… NYT

In May, GE launched their $1.5B “Ecomagination" environmental responsibility initiative, a move that reverberated widely.

When a corporate giant such as GE places its stamp of approval on CSR as a legitimate mainstream business strategy, it suddenly becomes much harder to invalidate CSR…

Page 9: Exploring Social Responsibility Within Your Organization

GE’s EcomaginationGE’s Ecomagination

Page 10: Exploring Social Responsibility Within Your Organization

I Banks are Slowly Arriving….

Goldman Sachs became the first major investment bank to adopt a comprehensive environmental policy--and the fourth major US financial institution to do so, after JPMorgan Chase (JPM) earlier and Bank of America (BAC) and Citigroup in previous years…

Page 11: Exploring Social Responsibility Within Your Organization

Has CSR Gone Mainstream?

Page 12: Exploring Social Responsibility Within Your Organization

What Is Corporate Social Responsibility?

Philanthropy?

Employee volunteerism?

PR?

Transparent reporting?

Free give aways?

Sponsorships?

Workplace diversity?

PROFITABLE?

Human rights?

Citizenship responsibilities?

Sustainable development?

Corporate governance?

Business ethics?

Employee treatment?

Environmental impact?

Safe products?

Solving socialproblems?

Page 13: Exploring Social Responsibility Within Your Organization

What Is Corporate Social Responsibility?

Setting up offshoreaccounts?

Squandering employees’retirement funds?

Hiding income?

Using ‘I was notaware’ as CEO’s defense?

Hiding debt?

SUSTAINABLE?

Pre-texting?

Non-independentboard?

Cooking the books?

Domiciling in the Bahamas?

Insider trading?

Auditors serving as consultants?

Birthday party for wife in Italy?

SEC violations?

Dumping toxins in rivers?

Page 14: Exploring Social Responsibility Within Your Organization

Crowded Terminology Space

Corporate Social Responsibility

Corporate Responsibility

CSR Sustainable

Development Sustainability ESG CSER Social enterprise

Global Citizenship Corporate Citizenship Values-driven

Business Natural Capitalism Spiritual Capitalism Compassionate

Capitalism People, Planet, Profits

Or…Good Management/ Good Business?

Page 15: Exploring Social Responsibility Within Your Organization

Global Citizenship/ CSR/Sustainability

• Employee engagement

• Community engagement

• Corporate philanthropy

• Government and public relations

• Governance and ethics

• Corporate environmental footprint

• Socially and environmentally sound product design and production

“Deeper business purpose, great products, customer satisfaction, employee happiness, social and environmental responsibility— these are the keys to maximizing long-term profits.” -John Mackey, CEO Whole Foods

“People want to know your values and ethics demonstrated by how you treat employees, the community in which you operate, and many other things that are important to them.”-Howard Schultz, Chairman, Starbucks

“I believe that businesses today need to ensure that corporate social responsibility is a strategic component of their own planning and reporting.” -John Chambers, CEO Cisco

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Defining Corporate Responsibility

Net Impact: Using the power of business to create a better world.

Business for Social Responsibility (BSR): Companies being able to be commercially successful in ways that demonstrate respect for ethical values, people, community, and the environment.

Page 17: Exploring Social Responsibility Within Your Organization

Defining Corporate Responsibility

World Business Council for Sustainable Development: Corporate social responsibility is the continuing commitment by business to behave ethically and contribute to economic development while improving the quality of life of the workforce and their families as well as of the local community and society at large.

Page 18: Exploring Social Responsibility Within Your Organization

WBCSD Simplified

“CSR is about helping to meet people’s needs.”

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The Triple Bottom Line

Soci

al

Env

iron

men

tal

Eco

nom

ic

Triple Bottom Line

Economic

Triple

Bottom LineJ. Elkington, SustainAbility

Page 20: Exploring Social Responsibility Within Your Organization

ECONOMICECONOMICENVIRONMENTALENVIRONMENTAL SOCIALSOCIAL

“TRIPLEBOTTOM

LINE”

SINGLE BOTTOM LINE SUSTAINABILITY =

INCORPORATING INTO STRATEGY AND OPERATIONSENSURING AND ENHANCING VALUE CREATION

“DOING WELLBY

DOING GOOD”

Sustainability/Corporate Responsibility/Sustainability/Corporate Responsibility/

Global CitizenshipGlobal Citizenship

Page 21: Exploring Social Responsibility Within Your Organization

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

Philanthropy

Socio-political Issues

Reporting

Accountability

Page 22: Exploring Social Responsibility Within Your Organization

Strategic CSR

Strategic corporate responsibility is a business strategy that is integrated with core business objectives & core competencies to create business value and positive social change, and is embedded in day to day business operations.

McElhaney, 1998

Page 23: Exploring Social Responsibility Within Your Organization

It is About Fit

CSR Strategy must fit two things:

1. Core business objectives: Increase sales, penetrate new markets, engage

employees, reduce operating expenses, improve reputation, protect brand, beat competitors

2. Core competencies Technology, financial services, market making,

convenient fun food, automobiles and transportation systems

Page 24: Exploring Social Responsibility Within Your Organization

RESPONSIBILITYINCREASING

IN IMPORTANCE

RESPONSIBILITYINCREASING

IN IMPORTANCE

GOVERNMENTS

GOVERNMENTS

MARKET/ GROWTH OPPORTUNITIES

MARKET/ GROWTH OPPORTUNITIES

CONSUMERS CONSUMERS

COMPETITIONCOMPETITION

INVESTORS/ANALYSTSINVESTORS/ANALYSTS EMPLOYEESEMPLOYEES

Drivers of CSR

SOCIAL AND ENVIRONMENTAL

NON-GOVERNMENTAL

ORGANIZATIONS (NGOs)

SOCIAL AND ENVIRONMENTAL

NON-GOVERNMENTAL

ORGANIZATIONS (NGOs)

COLLEGE STUDENTS! COLLEGE STUDENTS!

YOU!

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Leadership Drivers

E & Y, 2002

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Reputation & Human Resource Drivers

BrandWho says social responsibility

is a big influence in their impressions of companies?

49%

Product PurchaseWho considers corporate citizenship when buying a

company’s product?

Product BoycottsHow many people would boycott a

product if they learned about negative citizenship practices?

79%

76%Employee Recruitment

Who considers social commitment when

choosing an employer?

77%

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CSR is a powerful predictor of reputation…if known

EmotionalAppeal

FinancialPerformance

WorkplaceEnvironment

Products &Services

Vision &Leadership

SocialResponsibility

ReputationReputationQuotientQuotientSMSM

(RQ)(RQ)

Feel Good AboutAdmire and RespectTrust

Market OpportunitiesExcellent LeadershipClear Vision for the Future

Rewards Employees FairlyGood Place to WorkGood Employees

Outperforms CompetitorsRecord of Profitability Low Risk InvestmentGrowth Prospects

Supports Good CausesEnvironmental ResponsibilityCommunity Responsibility

High Quality Innovative Value for MoneyStands Behind

Source: C. Fombrun, Reputation Institute, Harris Interactive

1

2

3

45

6

Page 28: Exploring Social Responsibility Within Your Organization

Females (employees, consumers, investors)

Gen Yers Ages 8-24 (cause focus)

Boomers (say v. do)

More educated

More diverse (gender, sexual orientation, ethnicity)

More affluent (enter Walmart)

Who Cares Most About CSR?

Page 29: Exploring Social Responsibility Within Your Organization

LeapFrog: Asthma Education LeapPad

Interactive LeapPad book for children ages 4-7 to learn key asthma messages to successfully

manage asthma.

•Most common chronic disease of childhood in the developed world.

•Affecting ~9 million children in the U.S. under 16.

•Americans with asthma: 26.3 million

•Emergency room visits for asthma: 1.9 million in 1995

Page 30: Exploring Social Responsibility Within Your Organization

Levi Strauss & Co

The Red Tab Foundation is a public, non-profit foundation which assists Levi Strauss & Co. employees, retirees, and their families who face problems caused by unexpected emergencies. The Red Tab Foundation (RTF) will provide financial assistance, education, and preventative programs to help these individuals in their own efforts to maintain their financial, physical and emotional health.

Among the first of "employer relief funds" set up to help employees in crisis

Based on employee-to-employee support, not coming from founders or the corporation

Includes retirees in its scope Programs include proactive education and support that

is designed for longer-term solutions: helping employees help themselves.

Page 31: Exploring Social Responsibility Within Your Organization

Campaign for Real Beauty Campaign began with a ''global study,'' commissioned by Dove

that posed questions about beauty to thousands of women in many countries.

Repositioned its brand around self-esteem issues Created CampaignForRealBeauty.com to allow women to

Vote on provocative images Join discussion groups on various beauty stereotypes Participate in the Dove Self-Esteem Fund

Established a “real beauty” section on Dove.com Uses un-retouched images of women rather than models on

Dove.com Commissioned and published a study called

The Dove Report: Challenging Beauty The uniquely Me! Girl Scouts of America self-esteem

program Works through the Unilever Foundation to donate money. In

addition, Unilever employees donate time to mentor girls as part of the program.

Program uses activity books and simple exercises to help build self-confidence in girls

Supports BodyTalk, an educational program for schools created by the Eating Disorders Association.

"This campaign is addressing key issues and connecting with women in ways that people have not connected in a long time."

- Retail analyst Marshall Cohen of the NPD Group.

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Impact

Increased sales. U.S. sales rose 6% in one year to $500 million. Dollar sales jumped 2% in the month the campaign started.

Heightened brand awareness. Ads received considerable press, more than 1 million women have visited dove.com and voted on images.

Created buzz with the "water cooler effect"

Page 33: Exploring Social Responsibility Within Your Organization

The only thing necessary for the The only thing necessary for the triumph of evil is for good men triumph of evil is for good men (and women!)(and women!) to do nothing. to do nothing.

- Edmund Burke

Page 34: Exploring Social Responsibility Within Your Organization

Things You Can Do: Take Fall semester BA 192 “Intro to CSR”

Taught by Kevin Sweeney

Enter CRB’s Gap Case Competition in the Spring Contact Joanna Trammell [email protected]

Ask about CSR in your job interviews

Ask companies from whom you buy about their CSR

Be the internal company change agents once you get inside of companies

Start a CSR conversation- help tip CSR