Tag Archives: Synergistic Value

The Way Forward: Corporate Sustainability and Responsibility

An Excerpt from: Camilleri, M.A. (2017). Corporate Sustainability and Responsibility: Creating Value for Business, Society and the Environment. Asian Journal of Sustainability and Social Responsibility 2(1) 59-74. https://link.springer.com/article/10.1186/s41180-017-0016-5

In the past, CSR may have been more associated with corporate philanthropy, stewardship principles, contributions-in-kind toward social and environmental causes, environmental protection, employees’ engagement in community works, volunteerism and pro-bono service among other responsible initiatives. Very often, such altruistic CSR activities may have not resulted in financial performance to the business per se. On the contrary, certain discretionary
expenses in corporate philanthropy could have usurped the businesses’ slack resources (including financial assets, labour and time) without adding much value (in terms of corporate reputation and goodwill) to the businesses. Nevertheless, this research reported that the contemporary discourses on corporate social responsibility are opening new opportunities for the businesses themselves. The academic discourse about CSR is moving away from ‘nice-to
do’ to ‘doing-well-by-doing-good’ mantra. Evidently, the value-based approaches that were discussed in this paper could be considered as guiding principles that will lead tomorrow’s businesses to long term sustainability (in social and economic terms). Debatably, the profit motive (the business case or corporate sustainability concepts) could be linked with the corporate responsibility agenda. This way, the multinational corporations could be better prepared to address their societal and environmental deficits across the globe, whilst adding value to their business.

This review paper has built on the previous theoretical underpinnings of the corporate social responsibility agenda including Stakeholder Management, Corporate Citizenship and Creating Shared Value as it presents the latest Corporate Sustainability and Responsibility perspective. This value-based model reconciles strategic CSR and environmental management with a stakeholder approach to bring long term corporate sustainability, in terms of economic performance for the business, as well as corporate responsibility’s social outcomes. Recently, some international conferences including Humboldt University’s gatherings in 2014 and 2016 have also raised awareness on this proposition. The corporate sustainability and responsibility concept is linked to improvements to the companies’ internal processes including environmental management, human resource management, operations management and marketing (i.e. Corporate Sustainability). At the same time, it raises awareness on the
businesses’ responsible behaviours (i.e. Corporate Responsibility) toward stakeholders including the government, suppliers, customers and the community, among others. The fundamental motivation behind this approach is the view that creating connections between stakeholders in the value chain will open-up unseen opportunities for the competitive advantage of responsible businesses, as illustrated in Figure 1.

cs model

Multinational organizations are under increased pressures from stakeholders (particularly customers and consumer associations) to revisit their numerous processes in their value chain activities. Each stage of the company’s production process, from the supply chain to the transformation of resources could add value to their businesses’ operational costs as they produce end-products. However, the businesses are always expected to be responsible in their internal processes toward their employees or toward their suppliers’ labour force. Therefore, this corporate sustainability and responsibility perspective demands that businesses create economic and societal value by re-aligning their corporate objectives with stakeholder management and environmental responsibility. In sum, corporate sustainability and responsibility may only happen when companies demonstrate their genuine willingness to add corporate responsible dimensions and stakeholder engagement to their value propositions. This occurs when businesses opt for responsible managerial practices that are integral to their overall corporate strategy. These strategic behaviours create opportunities for them to improve the well-being of stakeholders as they reduce negative externalities on the environment. The negative externalities can be eliminated by developing integrated approaches that are driven by ethical and sustainability principles. Very often, multinational businesses are in a position to mitigate risk and to avoid inconveniences to third parties. For instance, major accidents including BP’s Deep Horizon oil spill in 2010, or the collapse of Primark’s Rana Plaza factory in Bangladesh, back in 2013, could have been prevented if the big businesses were responsible beforehand.

In conclusion, the corporate sustainability and responsibility construct is about embedding sustainability and responsibility by seeking out and connecting with the stakeholders’ varied interests. As firms reap profits and grow, there is a possibility that they generate virtuous circlesof positive multiplier effects (Camilleri, 2017). Therefore, corporate sustainability and responsibility can be considered as strategic in its intents and purposes. Indeed, the businesses are capable of being socially and environmentally responsible ‘citizens’ as they are doing well, economically. This theoretical paper has contributed to academic knowledge as it explained the foundations for corporate sustainability and responsibility. Although this concept is still evolving, the debate among academic commentators is slowly but surely raising awareness on responsible managerial practices and on the skills and competences that are needed to deliver strategic results that create value for businesses, society and the environment.

Advertisements

Leave a comment

Filed under Corporate Social Responsibility, Corporate Sustainability and Responsibility, CSR, Marketing, Shared Value, Stakeholder Engagement, Sustainability

Re-conceiving Corporate Sustainability and Responsibility for Education

employees

(This contribution also appeared on CSRwire)

During their learning journey, individuals acquire knowledge and skills that ought to be relevant for their prospective employment. The provision of their education is the responsibility of national governments. Yet, business and industry seldom offer continuous professional development and training to their human resources that supplement formal education (although they are rarely involved in setting outcomes of curriculum programmes). Very often, companies have to respond to challenging issues such as skill mismatches where candidates lack certain competencies that may be too deep to bridge through corporate training courses. Perhaps, global businesses may compensate to a certain extent as they can shift their operations elsewhere to tap more qualified employees. However, the constraints on their growth can be halted by the broad impact of inadequate education and training in some industries or regions. Therefore, corporations may possibly become a key player in addressing unmet needs in education. Several companies have the resources and the political influence to help improve educational outcomes which will in turn help them to nurture local talent. Leading businesses are already devising Corporate Sustainability and Responsibility (CSR) programmes that are actively supporting education across many contexts:

For instance; Cisco (a provider of networking equipment), has created more than 10,000 networking academies in 165 countries. 4.75 million individuals have improved their employment prospects as they attended training to become network administrators. At the same time, these individuals have increased the demand for Cisco’s equipment. Similarly, SAP and Verizon have often partnered with local universities and education institutions in order to deliver courses, career coaching and customised degrees on site for employees. The companies have discovered that employees that pursue such programmes are more likely to remain loyal to their company. Naturally, it is in the interest of employees to attend educational programmes that may ultimately lead to their career progression and better prospects. Moreover, continuous professional development and training may considerably reduce high employee turnover. Interestingly, SAP employs people with autism in technology-focused roles. In doing so, SAP concentrates on these individuals’ unique strengths. This way, the company can gain access to a wider pool of untapped talent that will help to foster a climate of creativity and innovation. In a similar vein, Intel has also invested in training programmes and partnerships that strengthen education. The company has recognised that its business growth is constrained by a chronic shortage of talent in science, technology, engineering, and maths (STEM) disciplines. Through programmes like Intel Math and Intel Teach, the global multinational has delivered instructional materials, online resources, and professional development tools for hundreds of thousands of educators across the United States. The students’ have acquired STEM and other 21st century skills, including critical thinking with data as well as scientific inquiry. This is a relevant example of a corporate business that has successfully addressed its workforce needs. Intel has recognised specific skill gaps in its central areas like technology and engineering. Accordingly, the company has committed itself for further investment in education. The company has created higher education curricula in demand areas like microelectronics, nanotechnology, security systems and entrepreneurship. Undoubtedly, Intel’s efforts affected millions of US students. At the same time, the company has increased its productivity and competitiveness. In addition, there are many big businesses that contribute in stewardship, charitable and philanthropic causes. In the past, the GE Foundation has supported systemic improvements in urban school districts that were close to GE’s business. These investments have surely helped to close the interplay between corporate sustainability and responsibility (CSR) and corporate philanthropy, while strengthening GE’s long-term talent pipeline.

In a nutshell, this contribution redefines the private sector’s role in the realms of education. It posits that there are win-win opportunities for companies and national governments as they cultivate human capital. Indeed, companies can create synergistic value for both business and society. In the main, such a strategic approach can result in new business models and cross-sector collaborations that will inevitably lead to operational efficiencies, cost savings and significant improvements to the firms’ bottom lines. Notwithstanding, the businesses’ involvement in setting curricula may also help to improve the effectiveness of education systems in many contexts. Businesses can become key stakeholders in this regard. Their CSR programmes can reconnect their economic success with societal progress.

Leave a comment

Filed under Corporate Sustainability and Responsibility, Education, Marketing

Generating Synergistic Value for Business and Society

images

Synergistic value integrates insights from the stakeholder theory [1] [2] [3] and the resource based view theory [4] [5].

The stakeholder theory [1] provides opportunities to align business practices with societal expectations and sustainable environmental needs. Businesses ought to reconcile disparate stakeholders’ wants and needs (e.g. employees, customers, investors, government, suppliers etc.). Firms can create synergistic value opportunities by forging alliances with internal and external stakeholders.  This may lead to an improvement in mutual trust and understanding. As a result, there are also benefits for corporate reputation, brand image, customer loyalty and investor confidence. This societal engagement also responds to third party pressures, it lowers criticisms from the public and minimises regulatory problems by anticipating legal compliance.

The synergistic value model [6] as featured in Figure 1. presents the potential effect of the government’s relationship on the organisation’s slack resources. Moreover, scarce resources are a facilitator for quality and innovation. Therefore, discretionary expenditures in laudable practices may result in strategic CSR [7] outcomes  including; effective human resources management, employee motivation, operational efficiencies and cost savings (which often translate in healthier financial results) [6]. business-comment_05_temp-1359037349-510143a5-620x348(source: Camilleri, 2012)

This promising notion suggests that there is scope for governments in their capacity as regulators to take a more proactive stance in promoting responsible behaviours. They can possibly raise awareness of social and sustainable practices through dissemination of information; the provision of training programmes and continuous professional development for entrepreneurs [6]. They may assist businesses by fostering the right type of environment for responsible behaviours; through various incentives (e.g. grants, tax relief, sustainable reporting guidelines, frequent audits et cetera) [6].

 

Synergistic value implies that socially responsible and environmentally-sound behaviours will ultimately bring financial results – as organisational capabilities are positively linked to organisational performance. Synergistic value is based on the availability of slack resources, stakeholder engagement and regulatory intervention which transcend strategic CSR benefits for both business and society.

References:

[1] Freeman, E.E. (1994). The Politics of Stakeholder Theory: Some Future Directions Business Ethics Quarterly, 4(4), 409

[2] Jones, T. M. (1995). Instrumental stakeholder theory: A synthesis of ethics and economics. Academy of Management Review, 20(2), 404–437.

[3] Donaldson, T., and Preston, L. E. (1995). The stakeholder theory of the corporation: Concepts, Evidence and implications. Academy of Management Review, 20(1), 65–91.

[4] Orlitzky, M., Siegel, D. S. and Waldman, D. A. (2011). Strategic Corporate Social Responsibility and Environmental Sustainability. Business & Society, 50(1), 6-27.

[5]McWilliams, A. and Siegel, D. 2011. Creating and capturing value: Strategic corporate social responsibility, resource-based theory and sustainable competitive advantage. Journal of Management, 37(5), 1480-1495.

[6] Camilleri, M. A. (2012). Creating shared value through strategic CSR in tourism.. University of Edinburgh. https://www.era.lib.ed.ac.uk/handle/1842/6564 accessed 10th July 2014.

[7] Werther, W. and Chandler, D. (2006). Strategic Corporate Social Responsibility: Stakeholders in a Global Environment. London: Sage Publications.

[8] Porter, M. E. and Kramer, M.R. (2011) Creating shared value. Harvard business review 89.1/2 (2011): 62-77.

 

Links:

http://www.timesofmalta.com/articles/view/20131010/business-comment/Unleashing-shared-value-through-content-marketing.489766

http://www.timesofmalta.com/articles/view/20130523/business-comment/Leveraging-organisational-performance-through-shared-value-propositions.470940

http://www.timesofmalta.com/articles/view/20130124/business-comment/Creating-shared-value-for-long-term-sustainability.454548

2 Comments

Filed under Marketing