Monthly Archives: June 2015

CSR 2.0 – A Conceptual Framework For Corporate Sustainability and Responsibility

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Businesses are capable of implementing responsible behaviours as they pursue their profit-making activities. A thorough literature review suggests that many academic articles have dedicated their energies on organising and evaluating the evidence to establish a link, usually through regression analysis between corporate social responsibility (CSR) or corporate social performance (CSP) and financial performance. Other authors referred to similar concepts as corporate citizenship has evolved following the concepts of stakeholder engagement and business ethics. In the light of these past theoretical underpinnings, this article reports on the many facets of CSR. This contribution puts forward key constructs representing strategic CSR, creating shared value and systematic CSR. It sheds light on the corporate sustainability and responsibility (CSR2.0) notion. This latter perspective suggests that responsible behavioural practices may be strategically re-conceived to confer competitive advantage over rival firms. Therefore, article makes reference to specific examples of some the latest laudable investments that create shared value. It explains how CSR2.0 requires a focus on building adaptive approaches and directing resources towards the perceived demands of diverse stakeholders for the long term sustainability of business. In a pragmatic approach, this contribution indicates that societal demands are not viewed as constraints on the organisation, but more as challenging opportunities which can be leveraged for the benefit of the firm and its stakeholders.

The Business Case for Corporate Social Responsibility
CSR can help to build reputational benefits; it enhances the firms’ image among external stakeholders and could lead to a favourable climate of trust and cooperation within the company 1. It may lead to create value for both business and society 2 3 4. Several authors maintained that through strategic CSR engagement businesses may achieve a competitive advantage5 6. Empirical studies have shown that there is a correlation between CSR and financial performance 1 3 7. Yet, it may appear that to date there is no explicit, quantitative translation of socially responsible practices into specific results that affect the profit and loss account8. Nevertheless, many companies are defending the correlation between social practices and financial results. The working assumption revolving around the CSP research is that corporate social and financial performance are universally related3. Strategic CSR increases the financial performance; minimises costs through better operational efficiencies, boosts the employee morale and job satisfaction and reduces the staff turnover, along with other benefits3.

CSR can bring a competitive advantage only if there are ongoing communications and dialogue between all stakeholder groups9 10 (including the employees, customers, marketplace and societal groups). The stakeholder relationships are needed to bring external knowledge sources, which may in turn enhance organisational skills and performance. Acquiring new knowledge must be accompanied by mechanisms for dissemination. There is scope in sharing best practices, even with rival firms. It is necessary for responsible businesses to realise that they need to work in tandem with other organisations in order to move the CSR agenda forward3 4. A recent study has indicated that businesses were investing in environmental sustainability, as they minimised their waste by reducing, reusing and recycling resources11. Several others were becoming more conscientious about their environmental responsibilities, particularly in the areas that were in situated in close proximity to their business. They were increasingly protecting the environment as they reduced their pollution through carbon offsetting programmes and the like11. The researcher believes that there is still room for improvement. There are many business practitioners who ought to realise the business case for CSR. Their organisational culture and business ethos could become more attuned to embrace responsible behavioural practices.

Creating Shared Value – Seeking Win-Win Outcomes
In the past, the stakeholder theory has demonstrated how stakeholders could develop long-term mutual relationships, rather than simply focusing on immediate profits. Of course, this does not imply that profit and economic survival are unimportant. On the contrary, this argument is that it is in the businesses’ interest to engage with a variety of stakeholders, upon whom dependence is vital3 4. The businesses’ closer interactions with stakeholders are based on relational and process-oriented views9. Many corporations are already forging strategic alliances in their value chain in order to run their businesses profitably. Some successful businesses are also promoting the right conditions of employment in their supply chains. At the same time, they are instrumental in improving the lives of their suppliers. They do this as they want to enhance the quality and attributes of their products, which are ultimately delivered to customers and end consumers12.
Nestlé, Google, IBM, Intel, Johnson & Johnson, Unilever, and Wal-Mart are some of the multinationals who have somewhat embraced Porter and Kramer’s ‘shared value’ approach. In many cases they are building partnership and collaborative agreements with external stakeholders (including suppliers) hailing from different markets. The notion of shared value is opening up new opportunities for sustainability, particularly with its innovative approach to re-configure the value chain4. Yet, there are academics who argued that this concept ignores the tensions that are inherent in responsible business activity13. “Shared value” cannot cure all of society’s ills as not all businesses are good for society nor would the pursuit of shared value eliminate all injustice. However, the profit motive and the tools of corporate strategy will help to address societal problems14. As a matter of fact, many businesses are reconceiving their products as they take a broad view of their purchasing, procurement and production activities4.
Several multi-national organisations are looking beyond their short-term profits for shareholders. They are also looking after their marketplace stakeholders including suppliers who source their products. Many multinational organisations are redefining productivity in the value chain and enabling local cluster developments to mitigate risks, boost productivity and competitiveness. For instance, Nestlé’s business principles incorporated 10 United Nations Global Compact Principles on human rights, labour, the environment and corruption12. Nestlé is an active member of the Compact’s Working Groups and Initiatives. Nestlé maintains that it complies with international regulatory laws and acceptable codes of conduct, as it improves its company’s operations. Yet, at the same time it helps those suppliers hailing from the least in poorer rural regions of the world. Nestlé has revisited its numerous processes and its value chain activities. Each stage of the production process, from the supply chain to transforming resources adds value to the overall end product. This benefits the company itself. Nestlé sources its materials from thousands of farms from developing countries. The company maintains that it provides training to farmers in order to encourage sustainable production while protecting their procurement, standards and quality of their raw materials. This brings positive, long-term impacts on the local economy. At the same time, these suppliers are running profitable farms, as they are offering their children a better education. Moreover, both Nestlé and its suppliers are committed to protecting their natural environmental resources for their long term sustainability.
Corporate sustainability occurs when a company adds a social dimension to its value proposition, making social impact integral to its overall strategy. The rationale behind the corporate responsibility lies in creating value and finding win-win outcomes by seeking out and connecting stakeholders’ varied interests. Creating shared value (CSV) is about embedding sustainability and strategic corporate social responsibility into a brand’s portfolio. As firms reap profits and grow, they can generate virtuous circles of positive multiplier effects11.

 

Conclusion
This article provides the foundation of the conceptual theory and empirical enquiry of the discourse surrounding the corporate sustainability and responsibility (CSR2.0) agenda. A thorough literature review reveals that many authors have often investigated the relationship between corporate social responsibility (corporate social performance or corporate citizenship) and financial performance. This contribution maintains that CSR 2.0 initiatives can be re-conceived strategically to confer competitive advantage in the long term. The business case for CSR 2.0 focuses on building adaptive approaches and directing resources towards the perceived demands of stakeholders (Camilleri, 2015). Stakeholder demands are not viewed as constraints on the organisation, but more as challenging opportunities which can be leveraged for the benefit of the firm. This contribution looks at different aspects of CSR2.0, as it makes specific reference to responsible human resources management, environmental sustainability, forging relationships with marketplace stakeholders and strategic philanthropy towards the community. Engagement in these activities will ultimately create shared value for both the business and the society. CSR2.0 unlocks value, as the business and the community become mutually reinforcing. The value creation arguments focus on exploiting opportunities that reconcile differing stakeholder demands. Businesses ought to realise that laudable investments in CSR2.0 can lead to better organisational performance in the long run. This contribution indicates that there are future avenues for further research in this promising area of strategic management. Empirical studies may focus on how socially responsible behaviour, environmental sustainable practices, stakeholder engagement and regulatory interventions may create value for all.

References

  1. Camilleri, M.A. “Unlocking shared value through strategic social marketing” (paper presented at the American Marketing Association and the University of Massachusetts Amherst: Marketing & Public Policy Conference, Boston, 6th June 2014): 60-66 Accessed June 26, 2015. https://www.ama.org/events-training/Conferences/Documents/MPP14BO_Proceedings.pdf
  2. Sen, Sankar, Chitra Bhanu Bhattacharya, and Daniel Korschun. “The role of corporate social responsibility in strengthening multiple stakeholder relationships: A field experiment.” Journal of the Academy of Marketing science 34, no. 2 (2006): 158-166.
  3. Camilleri, M.A. “Creating Shared Value through Strategic CSR in Tourism” Saarbrucken: Lambert Academic Publishing, 2013 – ISBN 978-3-659-43106-7.
  4. Porter, Michael E., and Mark R. Kramer. “Creating shared value.” Harvard business review 89, no. 1/2 (2011): 62-77.
  5. Crane, Andrew, Abagail McWilliams, Dirk Matten, Jeremy Moon, and Donald S. Siegel, eds. The Oxford handbook of corporate social responsibility. Oxford University Press, (2008).
  6. Porter, Michael E., and Mark R. Kramer. “The link between competitive advantage and corporate social responsibility.” Harvard business review 84, no. 12 (2006): 78-92.
  7. Orlitzky, Marc, Frank L. Schmidt, and Sara L. Rynes. “Corporate social and financial performance: A meta-analysis.” Organization studies 24, no. 3 (2003): 403-441.
  8. Murillo, David, and Josep M. Lozano. “SMEs and CSR: An approach to CSR in their own words.” Journal of Business Ethics 67, no. 3 (2006): 227-240.
  9. Morsing, Mette, and Majken Schultz. “Corporate social responsibility communication: stakeholder information, response and involvement strategies.” Business Ethics: A European Review 15, no. 4 (2006): 323-338.
  10. European Union. “A renewed EU strategy 2011-14 for Corporate Social Responsibility” last modified December 10, 2014 http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=COM:2011:0681:FIN:EN:PDF European Commission Publications (2011).
  11. Camilleri, M.A. “The Business Case for Corporate Social Responsibility” (paper presented at the American Marketing Association in collaboration with the University of Wyoming, Oklahoma State University and Villanova University: Marketing & Public Policy as a Force for Social Change Conference. Washington D.C., 5th June 2014): 8-14, Accessed June 26, 2015. https://www.ama.org/events-training/Conferences/Documents/2015-AMA-Marketing-Public-Policy-Proceedings.pdf
  12. Camilleri, M.A. “Leveraging Organizational Performance through ‘Shared Value’ Propositions” Triple Pundit last modified November 22, 2013 http://www.triplepundit.com/2013/11/leveraging-organisational-performance-shared-value-propositions/
  13. Andrew Crane, Guido Palazzo, Laura J. Spence, and Dirk Matten. “Contesting the value of “creating shared value”.” California management review 56, no. 2 (2014): 130-153.
  14. A response to Andrew Crane13 article by Porter, Michael E., and Mark R. Kramer (2014) http://www.dirkmatten.com/Papers/C/Crane%20et%20al%202014%20in%20CMR.pdf
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Crunching Big Data for Operations Management

Big data

For decades businesses have been using data in some way or another to improve their operations. For instance, an IT software could support small enterprises in their customer-facing processes. Alternatively, large corporations may possess complex systems that monitor and detect any changes in consumer sentiment towards brands.

Recently, many industry leaders, including McKinsey, IBM and SAS among others have released relevant studies on big data. It transpires that they are using similar terminology to describe big data as a “situation where the volume, velocity and variety of data exceed an organisation’s ability to use that data for accurate and timely decision-making” (SAS). These providers of business intelligence solutions have developed technical approaches to storing and managing enormous volumes of new data.

The handling and untangling of such data requires advanced and unique storage, management, analysis and visualisation technologies. The terms of “big data” and “analytics” are increasingly being used to describe data sets and analytical techniques in applications ranging from sensor to social media. Usually, big data analytics are dependent on extensive storage capacity and quick processing power requiring a flexible grid that can be reconfigured for different needs. For instance, streaming analytics process big data in real time during events to improve their outcome.

Insightful data could easily be retrieved from the Web, social media content and video data among other content. Notwithstanding, such data could be presented in different forms; ranging from recorded vocal content (e.g. call centre voice data) or it can even be genomic and proteomic data that is derived from biological research and medicine.
Big data is often used to describe the latest advances in technologies and architectures. Nowadays, big data and marketing information systems predict customer purchase decisions. This data could indicate which products or services customers buy, where and what they eat, where and when they go on vacation, how much they buy, and the like.

Giant retailers such as Tesco or Sainsbury every single day receive long-range weather forecasts to work 8-10 days ahead. Evidently, the weather affects the shopping behaviour of customers. For example, hot and cold weather can lead to the sales of certain products. It may appear that weather forecasting dictates store placement, ordering and supply (and demand) logistics for supermarket chains. Other retailers like Walmart and Kohl’s also use big data to tailor product selections and determine the timing of price markdowns.

Shipping companies, like U.P.S. are mining data on truck delivery times and traffic patterns in order to fine-tune their routing. This way the business will become more efficient and incur less operational costs. Therefore, big data extracts value by capturing, discovering and analysing very large volumes of data in an economic and expeditious way. This has inevitably led to a significant reduction in the cost of keeping data.

Big data can also be linked with production applications and timely operational processes that enable continuous improvements. Credit card companies are a good illustration of this dynamic as direct marketing groups at credit card companies create models to select the most likely customer prospects from a large data warehouse. Previously, the process of data extraction, preparation and analysis took weeks to prepare and organise. Eventually, these companies realised that there was a quicker way to carry out the same task. In fact, they created a “ready-to-market” database and system that allowed their marketers to analyse, select and issue offers in a single day. Therefore, this case indicates that businesses became much more effective (and efficient) in their processes through iterations and monitoring of websites and call-centre activities. They could also make personalised offers to customers in milliseconds as they kept tracking responses over time.

Organisations are increasingly realising the utility of data that could bring value through continuous improvements in their operations. This contribution indicated that relevant data needs to be captured, filtered and analysed. Big data is already swamping traditional networks, storage arrays and relational database platforms. The increased pervasiveness of digital and mobile activity, particularly from e-commerce and social media is leading to the dissemination of meaningful data – that is being created each and every second. Successful, online businesses can gain a competitive advantage if they are capable of gathering and crunching data.

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CSR and Educational Leadership

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Adapted from my chapter, entitled; “Reconceiving CSR  programmes in Education” in Academic Insights and Impacts (Springer, Germany).

CSR and sustainability issues are increasingly becoming ubiquitous practices in different contexts, particularly among the youngest work force. This contribution suggests that there is a business case for responsible behaviours. Besides, minimising staff turnover, CSR may lead to strategic benefits including employee productivity, corporate reputation and operational efficiencies. Therefore, CSR can be the antecedent of financial performance (towards achieving profitability, increasing sales, return on investment et cetera).

Notwithstanding, the businesses’ involvement in setting curricula may also help to improve the effectiveness of education systems across many contexts. Businesses can become key stakeholders in this regard. Their CSR programmes can reconnect their economic success with societal progress. They could move away from seeking incremental gains from the market . Proactive companies who engage in CSR behaviours may possibly take fundamentally different positions with their stakeholders – as they uncover new business opportunities. This contribution showed how businesses could inspire their employees, build their reputations in the market and most importantly create value in education. This movement toward these positive outcomes may represent a leap forward in the right direction for global education.

This chapter has given specific examples of how different organisations were engaging in responsible behaviours with varying degrees of intensity and success. It has identified cost effective and efficient operations. It reported measures which were enhancing the human resources productivity. Other practices sought to engage in philanthropic practices and stewardship principles. At the same time, it was recognised that it was in the businesses’ interest to maintain good relations with different stakeholders, including the regulatory ones. Evidently, there is more to CSR than public relations and greenwashing among all stakeholder groups (including the employees, customers, marketplace and societal groups). Businesses ought to engage themselves in societal relationships and sustainable environmental practices. Responsible behaviours can bring reputational benefits, enhance the firms’ image among external stakeholders and often lead to a favourable climate of trust and cooperation within the company itself
(Herzberg et al., 2011). This chapter reported that participative leadership will boost the employees’ morale and job satisfaction which may often lead to lower staff turnover and greater productivity in workplace environments. However, it also indicates that there are many businesses that still need to realise the business case for responsible behaviours. Their organisational culture and business ethos will inevitably have to become attuned to embrace responsible behavioural practices.

Governments may also have an important role to play. The governments can take an active leading role in triggering corporate responsible behaviours in the realms of education. Greater efforts are required by governments, the private sector and other stakeholders to translate responsible behaviours into policies, strategies and regulations. Governments may give incentives (through financial resources in the form of grants or tax relief) and enforce regulation in certain areas where responsible behaviour is necessary. The governments ought to maintain two-way communication systems with stakeholders. The countries’ educational outcomes and curriculum programmes should be aligned with the employers’ requirements (Walker and Black, 2000). Therefore, adequate and sufficient schooling could instil students with relevant knowledge and skills that are required by business and industry (Allen and De Weert, 2007). The governments should come up with new solutions to help underprivileged populations and subgroups. New solutions could better address the diverse needs of learners. This chapter indicated that there is scope for governments to work in collaboration with corporations in order to nurture tomorrow’s human resources.

It must be recognised that there are various business operations, hailing from diverse sectors and industries. In addition, there are many stakeholder influences, which can possibly affect the firms’ level of social responsibility toward education. It is necessary for governments to realise that it needs to work alongside with the business practitioners in order to reconceive education and life-long learning. The majority of employers that were mentioned here in this chapter; were representative of a few businesses that hailed from the developed economies. There can be diverse practices across different contexts. Future studies could investigate the methods how big businesses are supporting education. Future research on this subject could consider different samples, methodologies and analyses which may obviously be more focused and will probably yield different outcomes. However, this contribution has puts forward the shared value’ approach. It is believed that since this relatively ‘new’ concept is relatively straightforward and uncomplicated, it may be more easily understood by business practitioners themselves. In a nutshell, this synergistic value proposition requires particular focus on the human resources’ educational requirements, at the same time it also looks after stakeholders’ needs (Camilleri, 2015). This notion could contribute towards long term sustainability by addressing economic and societal deficits in education. A longitudinal study in this area of research could possibly investigate the long term effects of involving the business and industry in setting curriculum programmes in education. Presumably, shared value can be sustained only if there is a genuine commitment to organisational learning for corporate sustainability and responsibility, and if there is a willingness to forge genuine relationships with key stakeholders.

Recommendations
This contribution contends that the notion of shared value is opening up new opportunities for education and professional development. Evidently, there are competitive advantages that may arise from nurturing human resources. As firms reap profits and grow, they can generate virtuous circles of positive multiplier effects. Many successful organisations are increasingly engaging themselves in socially responsible practices. There are businesses that are already training and sponsoring individuals to pursue further studies for their career advancement (McKenzie and Woodruff, 2013; Kehoe and Wright, 2013; Hunt and Michael, 1983). It may appear that they are creating value for themselves as well as for society by delivering relevant courses for prospective employees. In conclusion, this chapter puts forward the following key recommendations to foster an environment where businesses become key stakeholders in education.

  • Promotion of business processes that bring economic, social and environmental value;
  • Encouragement of innovative and creative approaches in continuous professional development and training in sustainable and responsible practices;
  • Enhancement of collaborations and partnership agreements with governments, trade unions and society in general, including the educational leaders;
  • Ensuring that there are adequate levels of performance in areas such as employee health and safety, suitable working conditions and sustainable environmental practices among business and industry;
  • Increased CSR awareness, continuous dialogue, constructive communication and trust between all stakeholders;
  • National governments ought to create regulatory frameworks which encourage and enable the businesses’ participation in the formulation of educational programmes and their curricula.

References

Allen, J., & De Weert, E. (2007). What Do Educational Mismatches Tell Us About Skill Mismatches? A Cross‐country Analysis. European Journal of Education, 42(1), 59-73.

Camilleri, M.A. (2015) The Synergistic Value Notion in Idowu, S.O.; Capaldi, N.; Fifka, M.; Zu, L.; Schmidpeter, R. (Eds). Dictionary of Corporate Social Responsibility. Springer http://www.springer.com/new+%26+forthcoming+titles+%28default%29/book/978-3-319-10535-2

Herzberg, F., Mausner, B., & Snyderman, B. B. (2011). The motivation to work (Vol. 1). Transaction Publishers.

Hunt, D. M., & Michael, C. (1983). Mentorship: A career training and development tool. Academy of management Review, 8(3), 475-485.

McKenzie, D., & Woodruff, C. (2013). What are we learning from business training and entrepreneurship evaluations around the developing world?. The World Bank Research Observer, lkt007.

Walker, K. B., & Black, E. L. (2000). Reengineering the undergraduate business core curriculum: Aligning business schools with business for improved performance. Business Process Management Journal, 6(3), 194-213.

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