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LINK BETWEEN COMPETITIVE ADVANTAGE AND CORPORATE SOCIAL RESPONSIBILITY

By: Section D, Group 3 Abhishek Chopra Ankit Nahata Arun Singhal Mohit Gupta Rasik Pandita Sonia Agarwal 09P184 09P186 09P190 09P208 09P223 09P235

INTRODUCTION

Current scenario of CSR:


y

Reasons why efforts have not been productive


Business vs Society Doing Generic CSR

This article presents a new way to look at the interdependence of business and society. It shows that it is not a zero sum game.

EMERGENCE OF CSR

Reactive:
Acting after public responses to social issues y Eg Nike, Shell Oil, Pharmaceuticals companies, etc
y

Targeted by Activists
They play an instrumental role in voicing public concerns y Eg Nestle
y

Governmental regulations
y

Eg In UK, companies have to disclose environmental risk in annual report

Currently, most CSR for public relations and media

JUSTIFICATIONS FOR CSR

Moral Obligation SustainAll four ability operate Reputation

Companies have a duty to be good citizens Honor ethical values and respect cultures while achieving commercial success Eg. Google in China

Meeting needs of present without compromising on future Appeals to the same weakness: ideas share enlighten self interest- triple bottom line Eg. Dupoint, Mc Donalds

Focus on tension between business and society rather Tacit or explicit permission from govt., than their interdependence. communities and License to other stakeholders.
Satisfying stakeholders- transfer primary control of CSR Eg. Mining

CSR initiatives to improve company image Primary focus is to satisfy external stakeholders Eg. Ben N Jerrys, Patagonia and Body Shop

INTEGRATING BUSINESS AND SOCIETY


Business and Society are interdependent y Successful Companies Healthy Society


y

Education, health care and equal opportunities are essential to a productive workforce

y
y

Healthy Society

Successful Companies

No social program can create job, wealth and innovation better than successful companies

They must follow the principle of shared value

Identifying the points of intersection

Creating a social dimension to the value proposition

Frame work

Choosing which social issues to address

Integrating inside-out and outsidein practices

Creating a corporate social agenda

Identifying the points of intersection

Inside-out Linkages
Company affects society through every activity in its value chain. These effects depend on Location Eg: Manufacturing in China vs US Time Eg. Asbestos

Outside-in Linkages

External social conditions also influence corporations Every company operates within a competitive context Eg. Ability to recruit appropriate human resource.

CHOOSING WHICH SOCIAL ISSUES TO


ADDRESS

Social Issues
Generic social issues
Not significantly affected by a companys operations nor materially affect its long term competitiveness

Value chain social impacts


Significantly affected by a companys activities in the ordinary course of business

Social dimension of competitive context


Issues in the external environment, that significantly affect the underlying drivers of a companys competitiveness in the locations where it operates

Eg. Carbon emmission

CREATING A CORPORATE SOCIAL AGENDA


Good citizenship Mitigate harm from value chain activities Eg GE

Responsive CSR:

Transform value chain activities while reinforcing strategy Strategic philanthropy that leverages capabilities Eg Toyota Prius

Strategic CSR`

INTEGRATING INSIDE-OUT AND OUTSIDE-IN


PRACTICES

Integrating value chain practices and investments in competitive context makes CSR hard to distinguish from day to day business of the company. Eg:

Works directly with small farmers to source basic commodities Built a dairy in Northern district of Moga Invested in educating farmers, improving animal health etc.

CREATING SOCIAL DIMENSION TO THE


VALUE PROPOSITION

At the heart of any strategy is a unique value proposition. Eg:

Value proposition is to sell organic, natural and healthy food products. Screening of food Purchase of renewable wind energy credits Environmentally friendly cleaning products Animal Compassion Foundation

ORGANIZING FOR CSR


Adjust organization, reporting relationships and incentives

Shift focus from an emphasis on image to emphasis on substance. Incorporate value chain and competitive context investments in CSR into performance measures of managers with P& L responsibility Create shared value which should be viewed like R&D, a long term investment in companys future competitiveness.

MORAL PURPOSE OF BUSINESS


What CSR is about:


Making philanthropic contributions Correcting what businesses have done wrong

What CSR is about


Finding a fit between strategy and social responsibility Creating shared value to lead to self sustaining solution.

Shifting from Corporate Social Responsibility to Corporate Social Integration

THANK YOU!!

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