5 . Winning Strategies P art 2

• 1. This mini-project builds on the previous mini-projects 2a or 2b. Review your plan for inclusion of Corporate Social Responsibility (CSR) obligations. Demonstrate that you have taken an ethical approach in the creation and deployment of your plan. Corporate Social Responsibility is one of the fundamental concepts of excellence; leaders wishing to develop their organizations towards excellence should ensure that all aspects of the organization operate in a sustainable and ethical manner.2. Create a presentation (10-15 minutes) that you will deliver to the Board of WaveRiders. The presentation should include a description of best practices in CSR and how you recommend that these practices be applied where appropriate in WaveRiders. Whilst a costed proposal is not required, be prepared to justify your proposal to the Board which has to justify its expenditure to its shareholders.3. Make sure that in your presentation you cite all reference sources that you use, using APA format, and provide a reference list (as the last slide if you are using a slide show to support your presentation).4. Use your wiki to develop your ideas and use the library database and other sources appropriately to support your work.5. Present your work on Thursday 24 February at 1.30 pm in IMC Room 249.

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5. Winning Strategies Part 2MBE A-1

23/02/2011

Leadership and Excellence

UKFM-LE 10MB0107/02/2011 to

25/02/2011OV

A Path for the Responsible and Sustainable Deployment of

Strategy

The Concept of CSR

Organizations have moral, ethical, and philanthropic responsibilities in addition to their responsibilities to earn a fair return for investors and comply with the law.

Corporate social responsibility (CSR) can be defined as the “economic, legal, ethical, and discretionary expectations that society has of organizations at a given point in time” (Carroll and Buchholtz ,2003)

A traditional view of the corporation suggests that its primary, if not sole, responsibility is to its owners, or stockholders (Smith, 1990).

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FOR AGAINST

The rise of the modern corporation created and continues to create many social problems. Therefore, the corporate world should assume responsibility for addressing these problems.

Taking on social and moral issues is not economically feasible. Corporations should focus on earning a profit for their shareholders and leave social issues to others.

In the long run, it is in corporations' best interest to assume social responsibilities. It will increase the chances that they will have a future and reduce the chances of increased governmental regulation.

Assuming social responsibilities places those corporations doing so at a competitive disadvantage relative to those who do not.

Large corporations have huge reserves of human and financial capital. They should devote at least some of their resources to addressing social issues.

Those who are most capable should address social issues. Those in the corporate world are not equipped to deal with social problems.

Source: Smith (1990)

Pyramid Concept of CSR

Discretionary Responsibilities

Ethical Responsibilities

Legal Responsibilities

Economic Responsibilities

Contribute resources to the community: improve quality of life

Obligation to do what is right, & fair. Avoid harm

Law is society’s codification of right & wrong. Play by the rules of the game

The foundation upon which all others rest.

Be a good corporation citizen

Be ethical

Obey the law

Be profitable

Source: Carroll (1991)4

Definition & Justification

The Contribution of CSR to Excellence (EFQM)

EFQM results are of course achieved by enablers.

• Role models for values and ethics, secure the future by defining/communicating core purpose/vision, ensure their people act with integrity and high ethical standards

Leadership

• Developed to ensure economic, societal, and ecological sustainability, through deployed plans

Strategy

• Are cared for, expected to act ethically.

People

• Managed for sustainable benefit

Partnerships and Resources

• Designed to optimise stakeholder value, and optimum value for customers

Processes, Products and Services

• Split 50:50 between perception and performance

Society Results

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Definition & Justification

Discretionary Responsibilities

Ethical Responsibilities



Best Practice Examples

• Levi's- Very successful company, selling around 120 million pairs of jeans per year.- But, throughout its lifecycle, a pair of jeans consumes as much energy as powering a personal computer for 556 hours. - Partnership with Goodwill to promote environmental benefits.- “Care Tag for Our Planet” (includes eco-friendly suggestions for caring for clothing, disposal).- Reinvention of product creation process (product life-cycle approach).- Moving to carbon neutral operations, with 100% renewable energy.- Improving resource efficiency: zero-waste, decreasing water usage.- Minimising impact of chemicals in product lifecycle.

• Toyota:

- Used a green focus to drive innovation: energy efficiency and environmental concern.- E.g. Hybrid engines, lighter materials, 'smart' systems improving efficiency of internal electronics.- Voluntary recall of Avensis in UK (though no accidents were reported), and 1.7 million cars worldwide. - Transparent approach hopes to win back confidence of media and public.

6Sources: Miratel Solutions (2010), Fisk (2010), Toyota UK 2011, BBC News 2011)

Best Practice Examples

• Interface Flooring:

- Mission Zero strategy hopes to eliminate any negative impacts on the environment by 2020.- New service model: from selling carpets to provision of carpeting.- Took responsibility for whole life cycle: leased, replaced, and recycled under one contract (closing the loop).- Between 1996 and June 2004: - 57 million lbs prevented from going to landfill, with half recycled. - Energy use per unit of carpet reduced by 45%.- 60% reduction in GHG emissions.- $330 million saved through resource waste reduction.

• British Airways:- Accused of computer hacking, poaching passengers, impersonation of Virgin staff, document shredding and press smears so as to gain market share.- Virgin sued BA for £4 million. Reflected badly on BA, lack of ethics cost customers.

7From Fisk (2011), Harrison (1993) and Cohen and Grace (2005)

The Strategy Process forWAVERIDER 2011

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Sales decreasingHigh cost

Continuous review

SWOT Internal Appraisal

Market developmentReview the cost

HR reduction

Restructuring in 5years

Cost reduction Market development

Increase market share in Europe

Action Plan (seen in as page-3)

Allocation Financial resource

Shift managersChanging Orgs

Actual results & outcomes

Adapted From Deming (1993), DuBrion (1998)

1. - Research European Market in order to Develop the new Market

2. - Sales Promotion (campaign) in European Market to enhance the business

3. - Price change, according to inflation (increasing contribution)

4. - HR Allocation Change (shift from Leisure Sales to European sales)

5. - Continue to invest in new tech to advance in competitive market

6. - HR moving between Finance & HR, with a reduction.

Strategy

CSR Factor Segmentations of WAVERIDERS

External Factors

-Research European Market in order to Develop the new

Market

-Sales Promotion (campaign) in

European Market to enhance the

business

-Price change, according to

inflation (increasing contribution)

-Continue to invest in new tech to

advance in competitive market

Internal Factors

-HR Allocation Change (shift from

Leisure Sales to European sales)

-HR moving between Finance & HR, as a kind of the

reduction

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Ethics

Environment

Political Environment

Legal

Economy

Community

External

Ethics

Environment

Legal

Economy

Community

Social

Internal

Ethical ImpactsUK Europe China

India

1Research European Market in order to Develop the new Market

　 ☑ ☑

2Sales Promotion (campaign) in European Market to enhance the business

　 ☑ ☑

3Price change, according to inflation (increasing contribution)

☑ ☑ ☑

4HR Allocation Change (shift from Leisure Sales to European sales)

☑ ☑ ☑　

5Continue to invest in new tech to advance in competitive market

☑ 　 ☑

6 HR moving between Finance & HR, as a kind of the reduction ☑ ☑ 　

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AnalysisReviewing WAVERIDERS’ Action Plan – Ethical Impacts

Environmental ImpactsUK Europe China

India


　 ☑


　 ☑ ☑




☑ ☑ ☑

6 HR moving between Finance & HR, as a kind of the reduction 　

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AnalysisReviewing WAVERIDERS’ Action Plan – Environmental Impacts

Political ImpactsUK Europe China

India


　 ☑ ☑


　 ☑ ☑


☑ ☑ ☑


　


☑


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AnalysisReviewing WAVERIDERS’ Action Plan – Political Impacts

Legal ImpactsUK Europe China

India


　 ☑ ☑


　 ☑ ☑


☑ ☑ ☑


　


☑ ☑ ☑


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AnalysisReviewing WAVERIDERS’ Action Plan – Legal Impacts

Economic ImpactsUK Europe China

India


　 ☑ ☑


　 ☑ ☑


☑ ☑ ☑


　


☑ ☑ ☑


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AnalysisReviewing WAVERIDERS’ Action Plan – Economic Impacts

Community ImpactsUK Europe China

India


　 ☑


　 ☑ ☑


☑


　



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AnalysisReviewing WAVERIDERS’ Action Plan – Community Impacts

Social ImpactsUK Europe China

India


　 ☑


☑ ☑


☑ ☑ ☑


☑　


　　 ☑

6 HR moving between Finance & HR, as a kind of the reduction ☑ ☑ ☑　

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AnalysisReviewing WAVERIDERS’ Action Plan – Social Impacts

Ethical Environment Political Environment Legal Economy Community Social

UK Europe China/India UK Europe China/

India UK Europe China/India UK Europe China/

India UK Europe China/India UK Europe China/

India UK Europe China/India

1 -Research European Market in order to Develop the new Market 　 ☑ ☑ 　　 ☑ 　 ☑ ☑ 　 ☑ ☑ 　 ☑ ☑ 　 ☑ 　　　 ☑

2-Sales Promotion (campaign) in European Market to enhance the business

　 ☑ ☑ 　 ☑ ☑ 　 ☑ ☑ 　 ☑ ☑ 　 ☑ ☑ 　 ☑ ☑ 　 ☑ ☑

3 -Price change, according to inflation (increasing contribution) ☑ ☑ ☑ 　　　 ☑ ☑ ☑ ☑ ☑ ☑ ☑ ☑ ☑ 　　 ☑ 　　 ☑

4 -HR Allocation Change (shift from Leisure Sales to European sales) ☑ ☑ 　　　　　　　　　　　　　　　　 ☑ ☑ ☑

5 -Continue to invest in new tech to advance in competitive market 　　 ☑ ☑ ☑ ☑ 　　 ☑ 　　 ☑ 　　　　　　　　 ☑

6 -HR moving between Finance & HR, as a kind of the reduction ☑ ☑ 　　　　　　　 ☑ ☑ 　 ☑ ☑ 　　　　 ☑ ☑ ☑

Impact Summary

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Proposal for CSR inclusion opportunities

• Market Research - Collate information from the regulatory bodies, competitors, and potential competitors. Ascertain importance of CSR values to consumers.

• Sales Promotion - Advertising without defaming our competitors. Look to enter untapped European markets.

• Price Change - Transparency in pricing information leading to customer confidence.

• HR Allocation - Assess vacant roles against existing staff to give opportunity for growth. Help those no longer required to find other employment.

• New technology - Provide training to operate new machines, investing in eco-friendly production techniques, materials, etc. This can help to reduce life-cycle energy use.

• Renewable energy commitment – moving to carbon neutrality.

• Life cycle approach – Advise customers on how best to maintain products, and look at how to recover at end of life, for appropriate disassembly and recycling.

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Justification of Proposal

• Not without associated costs.

• These strategies present opportunities for long-term, sustainable growth for company, and thus, shareholders (Grayson and Hodges, 2004).

• Financially, potential savings to be made from more efficient resource use. E.g. Interface Flooring, Levi’s, etc.

• Customers increasingly ethical in choice (Fisk, 2010).

• Not reacting to shifts in consumer/societal demands now could lead to greater risk and worse consequences in the long-term.

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Effectiveness of CSR

Reduction of Operation

Cost/Licence Cost

Customer Loyalty

Risk Management

Compliance

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CSR

Discretionary

ResponsibilitiesEthical

Responsibilities



Financial Performance Improvement

Enhance Brand Image & Reputation

Openness of Company Activities

Competitive Advantage

References

• BBC News (2011). Toyota recalls 1.7m vehicles globally over 'fuel leak'. Retrieved on February 22nd 2011 from http://www.bbc.co.uk/news/world-asia-pacific-12283732.

• Carroll, A.B. (1991), "The pyramid of corporate social responsibility: toward the moral management of organizational stakeholders",Business Horizons, July/August, pp.39-48.

• Cohen, S., Grace, D. (2005). Business Ethics: Problems and Cases. 3rd Edition. Australia: Oxford• Deming, E. W. (1982). Quality, productivity, and competitive position. Cambridge: MIT, Centre for Advanced

Engineering Study.• DuBrion, A. J. (1998). Leadership: Research findings, practice and skills. New York: Houghton Mifflin• Fisk, P. (2010). People, Planet, Profit. London: Kogan Page.• Grayson, D., Hodges, A. (2004). Corporate Social Opportunity! Sheffield: Greenleaf Publishing• Harrison, M. (1993). Battle of the Airlines, The Independent. Retrieved February 22nd 2011 from

http://www.independent.co.uk/news/battle-of-the-airlines-king-backed-dirty-tricks-ba-staff-hacked-into-virgin-computers-and-poached-passengers-1477973.html

• Miratel Solutions (2010). Levi’s wearing social responsibility with pride. Retrieved February 22nd 2011, from http://www.miratelinc.com/blog/levis-wearing-social-responsibility-with-pride

• Smith D., (1991). The Kraken Wakes: corporate social responsibility and the political dynamics of the hazardous waste issue. Industrial Crisis Quarterly, 5: 189-207.

• Toyota UK (2011). Avensis Voluntary Recall. Retrieved February 22nd 2011 from http://www.toyota.co.uk/cgi-bin/toyota/bv/frame_start.jsp?id=avensis_recall

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Documents

5 . Winning Strategies P art 2