SUSTAINABLE CREATION OF SHARED VALUES OF

ENTREPRENEURSHIP IN THE CONTEXT OF

SUSTAINABLE CORPORATE SOCIAL RESPONSIBILITY

Ing. Lubomir SmidaProf. Ing. Peter Sakal, CSc.

2nd ICEESDJilin City, Jilin, ChinaOctober 12 – 14, 2012

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• Established in 1937.• 7 faculties:– Faculty of Civil

Engineering,– Faculty of Mechanical

Engineering,– Faculty of Electrical

Engineering and Information Technology,

75th anniversaryof the establishment

– Faculty of Chemical and Food Technology,

– Faculty of Architecture,– Faculty of Materials Science

and Technology,– Faculty of Informatics and

Information Technology.

http://www.stuba.sk/english.html?page_id=132

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• Institutes: 8 Institute of Materials Science,8 Institute of Production Technologies,8 Institute of Production Systems and Applied Mechanics,8 Institute of Applied Informatics, Automation and Mathematics,8 Institute of Safety and Environmental Engineering,8 Institute of Industrial Engineering, Management and Quality.

Information DVD about the faculty

http://www.mtf.stuba.sk/english/on-faculty/dvd-about-faculty.html?page_id=2980

http://www.mtf.stuba.sk/english.html?page_id=760

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Institute of Industrial Engineering, Management and Quality· Study programmes:

8 Industrial Management,8 Production Quality.

http://www.comattech.sk/eng/uvod.php

• Organized under the auspic of Minister of Education, Science, Research and Sport of the Slovak Republic Doc. Dusan CAPLOVIC.

• Research activities:– research and pedagogical projects within VEGA & KEGA grant agencies,– international programmes and projects of MVTS,– internally funded projects,– contractual research and development projects funded by business and

industry.

http://www.mtf.stuba.sk/english/research.html?page_id=2948

Guarantee of the study programme Industrial management.Follower of the idea of sustainable development and corporate social responsibility.

Prof. Ing. Peter Sakal, CSc.

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• This paper was supported by the Slovak Research and Development Agency under the contract No. LPP-0384-09: “Concept HCS model 3E vs. Concept Corporate Social Responsibility (CSR).”

• http://www.apvv.sk/agentura?lang=en

• The paper is also a part of submitted KEGA project No. 037STU-4/2012 “Implementation of the subject “Sustainable Corporate Social Responsibility” into the study programme Industrial management in the second degree at MTF STU Trnava”.

• http://www.portalvs.sk/en/prehlad-projektov/6838

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• Main objective of presentation:– presentation of the basis and model of

sustainable creation of shared values.• Partial objectives of presentation:

– presentation of sustainable corporate social responsibility,

– presentation of amoeba system within the project KEGA, “Implementation of the subject “Sustainable Corporate Social Responsibility” into the study programme Industrial management in the second degree at MTF STU Trnava”.

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CONTENTS

INTRODUCTION1. SUSTAINABLE DEVELOPMENT

1.1. Corporate Social Responsibility1.2. Creating Shared Values1.3 .Sustainable Corporate Social Responsibility

2. THE AMOEBA SYSTEM2.1. Sustainable creation of shared values by the amoeba system

SUMMARY

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INTRODUCTION• Sustainable society index (2010) – Criteria: Preparation for the future:

Post-war crisis,Financial crisis,

Raw material crisis, ...

Food crisis,

Human thinking

crisis

The need of a system that supports long-term development.

9Beginning - mid-20th century1968 – The Club of Rome1987 – Brundtland report1992 – Rio declaration

2002 – Johannesburg summit2005 – Millenium ecosystem assesment2012 – Rio – „The Future We Want“ document

• Aimed at creating and maintaining a balance between the individual components of the Earth.

• ISO 26000: "Development that meets the needs of the present without compromising the ability of future generations to meet their own needs.„

1. SUSTAINABLE DEVELOPMENT

• Social, economic and environmental objectives

are interdependent and mutually reinforcing.

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1. SUSTAINABLE DEVELOPMENT

Growth of world population World energy consumption

Sustainable society index Happy planet index

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1. SUSTAINABLE DEVELOPMENT OF ENTREPRENEURSHIP

70% of chief executives and 49% of Boards are engaged in corporate

sustainability strategy.

• Representatives acknowledge that the implementation of sustainable development will depend on the active engagement of both, the public and the private sector.

• Representatives support national regulatory and policy frameworks that enable business and industry to advance SD initiatives, taking into account the importance of corporate social responsibility.

• Representatives call on the private sector to engage in responsible enterprise practices, such as those promoted by the United Nations Global Compact.

www.scss.sk

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1.1. Corporate Social Responsibility• Gradually have exapanded from individuals to national and global level.• Pioneers - Owen, Bata, Carnegie, Bowen.

• Strategy Europe 2020 - smart, sustainable and inclusive economy delivering high levels of employment, productivity and social cohesion.

• Strategy Enterprise 2020 - address the European and global challenges which are increasingly bringing into question our current patterns of living, working, learning, communicating, consuming and sharing resources.

• A renewed EU strategy 2011-14 for Corporate Social Responsibility – CSR:

“The responsibility of enterprises for their impacts on society”.

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The age of greed

The age of philantropy

The age of marketing

The age of management

The age of responsibility

1.1. Corporate Social Responsibility

Wayne Visser – Corporate Sustainability and Responsibility

• Economic sustainability requires financial responsibility.

• Human sustainability requires labour responsibility.

• Social sustainability requires community responsibility.

• Environmental sustainability requires moral responsibility.

http://www.waynevisser.com/wp-content/uploads/2012/04/chapter_wvisser_age_responsibility.pdf

Enterprises in spite of worldwide efforts of organizations to improve the quality of life of mankind came to CSR only as to marginal or non-economic concept that is not included in the core of entrepreneurship.

SUSTAINABILITY RESPONSIBILITY

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1.2. Creating Shared Values

• In response to the slow development of CSR.

• Based on previously overlooked opportunities for:– designing customer needs,

products and markets,– the new definition of

productivity in the value chain and

– enabling the development of local clusters.

Michael Porter and Mark Kramer

http://www.waterhealth.com/sites/default/files/Harvard_Buiness_Review_Shared_Value.pdf

CSR CSV

Added value Financial support of socially responsible activities

Economic and at the same time societal benefits from the main activities

Manifestation Philanthropic activities, care for the environment, corporate citizenship

Cooperation in the development of shared values

Application As a voluntary autonomic response to requests from outside independent from effort to increase business performance

Integral part of the implementation of enterprise strategy, in direct connection with the fulfilment of financial goals

Agenda Defined by external standards and requires separate reporting, prepared by established organizational unit

It is part of the specific measures contributing to the implementation of business plans by standard departments

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1.3. Sustainable Corporate Social Responsiblity• Sustainable corporate social responsibility is based on the

idea of enterprise oriented to economic development aimed at promoting social and environmental development.

• Social innovation means new ideas, business models, products and services resolving existing sustainable challenges, such as demographic change, human rights violations, financial crisis, environmental degradation, and poverty.

http://www.csreurope.org/pages/en/enterprise2020.html

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1.3. Sustainable Corporate Social Responsiblity• "The system of interconnected activities performed by the

entrepreneur long-term, independently and on own responsibility with participation of stakeholders,

• able to self-management and participating on created sustainable added value and

• serving to promote social and environmental development in order to create a suitable local environment for long-term development of sustainable corporate social responsibility

• and in line with global aspirations of mankind to maintain a balance between all elements of the global ecosystem.„

• Implementation to the practice is a systematic and long-term process.

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2. THE AMOEBA SYSTEM

• A metaphor on comparison of independent units to individual cells.• Practical organizational expression in the system of Kyocera Corporation,

founded in 1959 by Dr. Kazuo Inamori as Kyoto Ceramic Co., Ltd.• Each amoeba provides own strategic management, system of profit, cost

accounting and personnel management.

• Division and disintegration of amoebas is managed according to the level of production and value added on member per hour, for example:– At low production and high added value, the amoeba system is

divided into smaller units.– The high production and high added value, the amoeba system

maintains.– The high production and low value-added amoeba system reduces

the number of members, radically reorganized and the lack of improvement is dissolved.

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2. THE AMOEBA SYSTEM

http://global.kyocera.com/inamori/management/amoeba/index.html

" Management has been based on the Kyocera

Philosophy, with "What is the right thing to do as a

human being" as the decision-making

criterion.

• The advantage of the amoeba system in terms of CSR lies in creating work teams, amoebas, which carry out various activities in the value chain.

• It is therefore the creation of internal amoebas, but also external, those participate in the enterprise development, while increasing their quality of life.

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2.1. Sustainable creation of shared values• The elements of the system are: – Internal stock. It consists of

employees of the enterprise. – External stock. It consists of

stakeholders other than employees.

– Production. The process of compiling amoebas from internal (1) and external stock (2).

– Interconnection. Amoebas build market relations (3).

– Disintegration. The break-up of amoebas, which do not create added value. Employees return to stock, or leave the enterprise (4), (5).

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• Partly applied within the project KEGA “Implementation of the subject “Sustainable Corporate Social Responsibility” at MTF STU Trnava.

2.1. Sustainable creation of shared values

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• Development of SCSR requires:– development of cooperation with the enterprise stakeholders,– according to CSV, involvment of external subjects in the value chain,– long-term focus,– creation of internal and external working teams, amoebas, that should

increase dynamics of SCSR develpment and simultanously local community,

– creation of external stock that is center of the dynamic competition,– understanding that GDP is not suitable indicator of Human Happiness.

SUMMARY

http://www.wbcsd.org/web/projects/BZrole/Vision2050-FullReport_Final.pdf

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REFERENCES1. ISO 26000: 2010, Guidance on social responsibility.2. United Nations: The future we want. Information on

http://daccess-dds-ny.un.org/doc/UNDOC/GEN/N12/381/64/PDF/N1238164.pdf?OpenElement

3. Z. Pitra: Jak zachranit prednosti kapitalistickeho systemu? Information on http://www.cma.cz/Upload/Documents/aktuality/HBR11-Porter.pdf

4. E. Thomasova: Sietova struktura zlozena z ameb. Information on: http://www.akademickyrepozitar.sk/sk/repozitar/ameby.pdf

5. M.E. Porter, M.R. Kramer: How to Fix Capitalism? Creating Shared Value. In: Hardvard Business Review, January-February 2011, p. 63-77.

6. R. Adler, T. Hiromoto: AMOEBA MANAGEMENT: LESSONS FROM KYOCERA ON HOW TO PROMOTE ORGANIZATION GROWTH, PROFITABILITY, INTEGRATION, AND COORDINATED ACTION. Information on: http://www.pma.otago.ac.nz/pma-cd/papers/1039.pdf

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REFERENCES27. http://www.happyplanetindex.org/data/28. http://www.un.org/apps/news/story.asp?NewsID=42281#.UHIA35gmSSo29. http://www.unglobalcompact.org/docs/news_events/8.1/2011_Global_

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w_Shared_Value.pdf39. http://www.csreurope.org/pages/en/enterprise2020.html40. http://global.kyocera.com/41. http://global.kyocera.com/ecology/csr/index.html42. http://global.kyocera.com/inamori/management/amoeba/index.html43. http://www.wbcsd.org/web/projects/BZrole/Vision2050-FullReport_Final

.pdf

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Ing. Lubomir Smida Slovak University of TechnologyFaculty of Materials Science and TechnologyInstitute of Industrial Engineering, Management and QualityPaulinska 16917 24 TrnavaSLOVAKIA

Prof. Ing. Peter Sakal, CSc.Slovak University of TechnologyFaculty of Materials Science and TechnologyInstitute of Industrial Engineering, Management and QualityPaulinska 16917 24 TrnavaSLOVAKIA

lubomir.smida@stuba.skpeter.sakal@stuba.sk

THANK YOU FOR YOUR ATTENTION!