The CSR Newsletters are a freely-available resource generated as a dynamic complement to the textbook, Strategic Corporate Social Responsibility: Sustainable Value Creation.

To sign-up to receive the CSR Newsletters regularly during the fall and spring academic semesters, e-mail author David Chandler at david.chandler@ucdenver.edu


Friday, February 29, 2008

Strategic CSR - Art

This url (http://www.chrisjordan.com/current_set2.php?id=7) is the home of a web site that presents Chris Jordan’s photographic art in dramatic fashion. Jordan seeks to use his art to portray statistics in a way that constitutes a powerful commentary on the mass consumer society in which we live:

“Each image portrays a specific quantity of something: fifteen million sheets of office paper (five minutes of paper use); 106,000 aluminum cans (thirty seconds of can consumption) and so on. My hope is that images representing these quantities might have a different effect than the raw numbers alone, such as we find daily in articles and books. Statistics can feel abstract and anesthetizing, making it difficult to connect with and make meaning of 3.6 million SUV sales in one year, for example, or 2.3 million Americans in prison, or 410,000 paper cups used every fifteen minutes. This project visually examines these vast and bizarre measures of our society, in large intricately detailed prints assembled from thousands of smaller photographs. The underlying desire is to emphasize the role of the individual in a society that is increasingly enormous, incomprehensible, and overwhelming.”

A more general collection of the artist’s work can be found at: http://www.chrisjordan.com/

Have a good weekend.
Dave

Bill Werther & David Chandler
Strategic Corporate Social Responsibility
© Sage Publications, 2006
http://www.sagepub.com/Werther

Thursday, February 28, 2008

Strategic CSR - Oil

The article in the url link below takes a step that I think is vital in order to evaluate more accurately a firm’s CSR Profile (Issues: Auditing CSR, p94):

“Oil prices are soaring. Returns on energy stocks have been fat. The 30 largest oil companies account for some 6% of the entire global equities market. In building wealth to pay for your kids' college or your own retirement, ignoring energy stocks can be costly. … But if you care about the environment, or how companies treat their employees in developing countries where oil extraction is often a nasty business, you confront an inconvenient question: Can you calm your conscience without hobbling your portfolio?”

Rather than use very blunt indicators of CSR activity (i.e., many SRI funds currently ignore firms that produce certain kinds of ‘sin’ products, such as cigarettes or oil—Issues: Investing, p184), this article outlines a process that begins to draw more subtle distinctions among firms:

“Fast Company turned to the sustainability experts at HIP Investor Inc. and the Social Venture Technology Group, both based in San Francisco, for help. These firms have together developed an exclusive methodology they call HIP™--Human Impact + Profit--for measuring the environmental and social impacts of business.”

Although this article only focuses on one specific industry, such a method of evaluation allows for comparisons across industries. For example, it allows for the possibility that a ‘good’ company in a ‘sin’ industry might have a better CSR profile (in terms of total social value) than a ‘bad’ company that operates in an industry that SRI Funds currently consider ‘acceptable’ (Issues: Brands, p153):

“Still, there are significant differences among the 10 largest players. Consider the volume of greenhouse gases released by their corporate actions. Marathon has taken real steps to cut emissions of carbon, methane, and other pollutants. Last year, the company released 49 tons of greenhouse gases per 1,000 barrels of oil produced. In contrast, ExxonMobil produced 104 tons of greenhouse gases per 1,000 barrels.”

Recognizing this distinction and beginning to account for it by avoiding stereotypes and other generalized statements moves the CSR auditing industry in a positive direction.

Take care
Dave

Bill Werther & David Chandler
Strategic Corporate Social Responsibility
© Sage Publications, 2006
http://www.sagepub.com/Werther

Oil
It's a dilemma for investors who want hefty returns and a clean green conscience: Can you own Big Oil and still feel good in the morning?
Fast Company Magazine
From: Issue 122 | February 2008 | Page 90 | By: Amy Feldman With R. Paul Herman and Sara Olsen | Photographs By: Plamen Petkov
http://www.fastcompany.com/investing/2008/index.html
http://www.fastcompany.com/magazine/122/oil.html

Wednesday, February 27, 2008

Strategic CSR - Apologies

The articles in the two urls below both deal with the issue of apologies by firms for actions that have not met stakeholder expectations (Issues: Stakeholder Relations, p138). The first article emphasizes that the internet and related communication technologies are forcing greater transparency and accountability among firms (Figure 3.4: Free Flow of Information, p56):

“As if being a successful CEO wasn't tough enough, now you may have to learn a new skill: the art of apologizing. The number of public C-level apologies is growing daily as Mattel's Robert Eckert, Ameritrade's Joe Moglia, Apple's Steve Jobs and JetBlue's David Neeleman join a very long list. … What's happening? Have business leaders suddenly abdicated control? Are financial expectations overtaking common sense and good business judgment? Or have corporations lost touch with their customers? "All of the above" could be one answer. But a more accurate explanation is that our world of instantaneous and ubiquitous communication has given customers more power to hold CEOs and companies accountable than ever before.”

The second article contains a number of anecdotes of firms apologizing well and many more of them doing it badly. Both articles detail the potential consequences for firms that fail to apologize quickly and genuinely:

“Business leaders have not always found apologising so easy. Here, timing is every bit as important as in politics - it's just that the time horizons are so much shorter. In the summer of 1999 Doug Ivester, then chief executive of Coca-Cola, waited over a week before apologising to Belgian customers for the contamination of his product that appeared to cause widespread sickness. While the company hesitated, Coca-Cola was being taken off the shelves in France and the Netherlands as well. In 1989, Exxon's response to the Valdez oil spill off Alaska was even worse: silence, followed by grudging acceptance and a Dollars 4.5bn fine.”

The issue of apologies and the potential positive consequences for firms that do it well and genuinely is worth keeping in mind as the U.S. Supreme Court re-visits the Exxon Valdez case today—an error of judgment that continues to generate negative headlines for Exxon (Special Cases of CSR: ExxonMobil, p292), almost two decades after the event.

Take care
Dave

Bill Werther & David Chandler
Strategic Corporate Social Responsibility
© Sage Publications, 2006
http://www.sagepub.com/Werther

Nothing Is Insignificant When It Comes to Brand Fulfillment
Go Beyond: In Every Single Way, Marketers Must Do More to Lock in Customer Loyalty
By Don Frischmann
January 21, 2008
http://adage.com/cmostrategy/article?article_id=123169
The article is posted in full at:
http://yummythinking.com/tt/entry/Nothing-Is-Insignificant-When-It-Comes-to-Brand-Fulfillment

Say sorry and mean it - or don't say anything at all.
By STEFAN STERN
929 words
19 February 2008
Financial Times
USA Ed1
Page 13
http://www.ft.com/cms/s/0/7c87c596-de47-11dc-9de3-0000779fd2ac.html

Tuesday, February 26, 2008

Strategic CSR - FCPA

The article in the url link below maps out the history behind the 1977 Foreign Corrupt Practices Act (Issues: Corruption and Bribery, p218), which, I didn’t realize, emerged as part of the fallout from the Watergate scandal and the fall of the Nixon Presidency:

“It is often forgotten that the Watergate scandal of the 1970s was not only about the misdeeds of the Nixon Administration. Investigations by the Senate and the Watergate Special Prosecutor forced companies such as 3M, American Airlines and Goodyear Tire & Rubber to admit that they or their executives had made illegal contributions to the infamous Committee to Re-Elect the President. Subsequent inquiries into illegal payments of all kinds led to revelations that companies such as Lockheed, Northrop and Gulf Oil had engaged in widespread foreign bribery. Under pressure from the SEC, more than 150 publicly traded companies admitted that they had been involved in questionable overseas payments or outright bribes to obtain contracts from foreign governments. … Congress responded to the revelations by enacting the FCPA in late 1977. For the first time, bribery of foreign government officials was a criminal offense under U.S. law, with fines up to $1 million and prison sentences of up to five years.”

In outlining how subsequent US Administrations dealt with implementing and enforcing the FCPA, the article argues that, rather than a deterrent, the legislation merely pushed bribery underground, a move that was aided by the unwillingness of successive US Administrations to ensure its adequate enforcement:

“Any illusion that commercial bribery was a rarity was dispelled in 2005, when former Federal Reserve Chairman Paul Volcker released the final results of the investigation he had been asked to conduct of the Oil-for-Food Program. Volcker’s group found that more than half of the 4,500 companies participating in the program … had paid illegal surcharges and kickbacks to the government of Saddam Hussein. Among those companies were Siemens, DaimlerChrysler and the French bank BNP Paribas.”

This has all changed in recent years, with the current Administration both pursuing investigations against US firms, as well as against foreign-based firms with a significant US presence. The author concludes, however, that the recent increase in investigations merely reflects the fact that corporate bribery continues unabated. In addition, the social stigma associate with such behavior has diminished markedly:

“Whereas the bribery revelations of the 1970s elicited a public outcry, the recent cases have generated little comment in the United States. Companies like Chevron pay their fine and go right on using their ad campaigns to present themselves as paragons of virtue.”

Take care
Dave

Bill Werther & David Chandler
Strategic Corporate Social Responsibility
© Sage Publications, 2006
http://www.sagepub.com/Werther

The New Business Watergate: Prosecution of International Corporate Bribery is on the Rise
by Philip Mattera
December 18th, 2007
http://www.corpwatch.org/article.php?id=14859

Monday, February 25, 2008

Strategic CSR - Social Entrepreneurship

The article in the url link below reviews a new book by Muhammad Yunus (“Creating a World Without Poverty: How Social Business Can Transform Our Lives”), the 2006 winner of the Nobel Peace Prize (Issues: Loans, p188). The book is a detour from the idea that made Yunus famous, microfinance, focusing instead on:

“his other big idea: that of ''social business''.”

His idea of social entrepreneurship, or “social business” as he terms it, is described as “a new sector of the economy made up of companies run as private businesses but making no profits” and sounds a lot like Bill Gates’ “creative capitalism” (http://www.gatesfoundation.org/MediaCenter/Speeches/Co-ChairSpeeches/BillgSpeeches/BGSpeechWEF-080124.htm). Similar to Gates, Yunus envisages businesses that:

“… focus on products and services that conventional companies do not find profitable, such as healthcare, nutrition, housing and sanitation for the poor. It is predicated on the view that investors will be happy to get zero return as long as they can see returns in social benefits.”

Whereas the reviewer thinks Yunus’ idea of microfinance is effective because it involves “harnessing market forces to overcome a market failure,” he is skeptical that altruism constitutes sufficient incentive to mobilize the private sector as a whole:

“The genius of microfinance was in getting the profit motive to work for the very poorest. The drawback of social business is that it depends on the kindness of strangers.”

Take care
Dave

Bill Werther & David Chandler
Strategic Corporate Social Responsibility
© Sage Publications, 2006
http://www.sagepub.com/Werther

Poor returns.
By ALAN BEATTIE
578 words
2 February 2008
Financial Times
Surveys MAG1
Page 33
http://www.ft.com/cms/s/0/7c524468-cd51-11dc-9b2b-000077b07658.html

Friday, February 22, 2008

Strategic CSR - Nike

The article in the url below demonstrates again the extent to which Nike has re-dedicated its supply chain to focus on issues of social responsibility (Issues: Cultural Conflict, p160). During the NBA’s All-Star Game last weekend, Nike unveiled a new shoe that, it is claimed:

“… represents a systemic shake-up of the company that is supposed to result in manufacturing operations that are both carbon neutral and cheaper. … what really distinguishes the shoe from its predecessors: the near absence of chemical-based glues and an outsole made of recycled material.”

While appealing to those who are concerned with the firm’s carbon footprint, in launching the new shoe, Nike’s CEO (Mark Parker) made it clear that it represents the cornerstone of an effort by the firm to minimize costs and increase efficiency:

“The elaborately stitched Air Jordan XX3 is part of Nike's "Considered" program -- a broad plan to reduce greenhouse gases and trim factory inefficiency by making cleaner, more sustainable designs in Nike's own labs. … All footwear is scheduled to meet baseline requirements for the new program by 2011.”

The newest Air Jordan was released together with another shoe, made for Steve Nash of the Phoenix Suns, which takes the definition of recycling to another level in shoe manufacturing and, as such, is perceived as a risk for Nike in appealing to its core consumers:

“… young athletes looking to jump higher, land softly and most importantly look cool. How that consumer will respond to "green" products remains unclear. Equally dicey is a new Nike basketball shoe made largely from manufacturing waste. The so-called Nike Trash Talk features an upper portion made from leather salvaged from the Chinese factory where the shoe was made and attached to a sole molded out of reground material from other shoes.”

Have a good weekend.
Dave

Bill Werther & David Chandler
Strategic Corporate Social Responsibility
© Sage Publications, 2006
http://www.sagepub.com/Werther

New Nike Sneaker Targets Jocks, Greens, Wall Street
By Nicholas Casey
1095 words
15 February 2008
The Wall Street Journal
B1
http://online.wsj.com/article/SB120303911940170393.html

Tuesday, February 19, 2008

Strategic CSR - Responsibility

The issue of interest in the article in the url below centers on the locus of responsibility for ensuring the health and welfare of battery-making factory employees in China (Issues: Auditing CSR, p94; Human Rights, p234):

“But in China, workers making goods for American consumers have long borne the brunt of a global manufacturing system that puts cost cutting ahead of safety. The search for cheaper production means dirty industries are migrating to countries with few worker protections and lenient regulatory environments.”

Clearly, the workers’ employers share some of the responsibility, although the firm in this article claimed not to have known the extent of the danger. But, what about the American firms that contract out production to Chinese suppliers? The dangers of cadmium have long been known in the US and it is not hard to imagine that the constant pressure on suppliers to reduce costs would likely discourage adequate employee protection (Issues: Litigation, p245). What about the role of American consumers in the story? Do they bear any responsibility? Do they care about the welfare of Chinese factory employees and are they willing to pay for adequate protection? Should they care and pay for it? Surely, the Chinese government also has a responsibility to enforce its own regulatory standards and the US government has a responsibility to inspect goods being imported into the US market?

The answers to these (and other) questions are not at all clear. Perhaps everyone is to blame, which means holding anyone accountable is almost impossible and, as usual, the buck is passed down the line:

“After revelations of its cadmium-battery problems arose, GP [Batteries] quit making them at its plants, and now outsources that production to independent factories in China.”

Take care
Dave

Bill Werther & David Chandler
Strategic Corporate Social Responsibility
© Sage Publications, 2006
http://www.sagepub.com/Werther

Toxic Factories Take Toll On China's Labor Force
By Jane Spencer and Juliet Ye
2172 words
15 January 2008
The Wall Street Journal
A1
http://online.wsj.com/article/SB119972343587572351.html

Tuesday, February 12, 2008

Strategic CSR - Philanthropy

The article in the url below explores the growing potential for philanthropy online—“Pixelanthropy” as the article terms it (Figure 3.4: The Free Flow of Information in a Globalizing World, p56; Issues: Philanthropy, p196):

“Second Life [the focus of this article] now has an office park called the Nonprofit Commons that is filled to capacity with 32 charities (there is a waiting list to get in), from the avant-garde Transgender Resource Center to the more traditional America’s Second Harvest and CARE USA.”

Charities are establishing virtual presences and utilizing them to raise real world dollars:

“… the American Cancer Society, one of the first traditional nonprofits to raise money for a cause in Second Life. … organize[d] a virtual Relay for Life, as the cancer society’s annual walkathons are known. A couple hundred avatars did that walk in 2005, raising $5,100. About 1,000 avatars showed up in 2006 and raised $40,000. This year’s walk in July raised $115,000 from 1,700 participating avatars.

Fund-raising activities are not merely extensions of real world events, however, but are taking advantage of characteristics of the online experience to involve donors in more immediate and imaginative ways:

“Save The Children … created a virtual, online 3-D animal pageant in Second Life last fall, called Yak Shack, after it sold out of the real yaks being auctioned on its 2006 holiday Wish List. Hundreds participated in the online event, buying yaks for 1,000 Lindens (the currency in Second Life), or about $3.50 in real money. Each player who bought a yak for a poor family was able to milk, ride, and customize a yak avatar online and take care of it in a virtual yak barn, culminating in a December contest for Best Yak.”

Another example:

“Plant-It 2020, a nonprofit founded by the late singer John Denver, has launched an island on Second Life on which residents can pay 300 Lindens (or $1.11) to plant a tree from among a list of endangered species. For every tree planted on Second Life, Plant-It 2020 will plant the same species of the tree in the real-world rainforest to which it is indigenous.”

While still in its infancy, and with the online community an evolving legal frontier (Are virtual donations tax deductible?), the article claims that the potential for growth is significant:

“In April, market research firm Gartner predicted that by the end of 2011, 80 percent of active Internet users will have some sort of presence in a virtual world, with Second Life currently one of the most populous.”

Take care
Dave

Bill Werther & David Chandler
Strategic Corporate Social Responsibility
© Sage Publications, 2006
http://www.sagepub.com/Werther

‘Pixelanthropy’ takes hold on Second Life
Nonprofits move into virtual world and champion causes in new ways
By Janet Rae-Dupree
MSNBC.com
January 10, 2008
http://www.msnbc.msn.com/id/22574057

Monday, February 11, 2008

Strategic CSR - Biofuels

The article in the url link below reports a proposal by the UN Food and Agriculture Organization to expand the production and international trade of bioenergy beyond its current narrow concentration of producing countries (Issues: Environmental Sustainability, p171):

“The US, Europe and Brazil last year accounted for almost 95 per cent of the world's biofuel production. Canada, China and India produced most of the rest.”

By encouraging production in a broader range of countries, the hope is that greater demand will be met, while allowing farmers in many developing countries to exploit the potential that exists for them to generate bioenergy:

“Biofuel production, mostly of corn-derived ethanol in the US and rapeseed-derived biodiesel in Europe, doubled between 2000 and 2005, according to the IEA. In 2005, however, that was still just 1 per cent of global road-transport fuel.”

The article argues that because the developed countries generating bioenergy are diverting resources that would otherwise be used for food production, the current production strategy is unsustainable in the long run:

“Corn prices this year reached an 11-year high of Dollars 4.30 a bushel while wheat prices last week rose to Dollars 6.96 a bushel, the highest since 1996. The US biofuel industry last year consumed about 20 per cent of the country's corn crop, far more than in the past.”

Take care
Dave

Bill Werther & David Chandler
Strategic Corporate Social Responsibility
© Sage Publications, 2006
http://www.sagepub.com/Werther

UN food chief urges rethink on biofuels.
By JAVIER BLAS
416 words
15 August 2007
Financial Times
London Ed1
Page 7
http://www.ft.com/cms/s/0/9d17df58-4ac7-11dc-95b5-0000779fd2ac.html

Friday, February 8, 2008

Strategic CSR - Bill Gates

The article in the first url below reports on Bill Gates’ (Special Cases of CSR: Microsoft (Bill Gates), p285) recent speech in Davos in which he called for more “creative capitalism.” While appealing at first glance, however, I am unconvinced by Gates’ argument. Ultimately, I am unsure what he actually means by “creative capitalism” and how it is to be realized in practice. For example, it is easy to say that:

“… private companies should be encouraged to tweak their structure slightly to free up their innovative thinkers to work on solutions to problems in the developing world. It's gung-ho, rather than hairshirt, philanthropy.”

But, in reality, what does “encouraged” mean? How are firms to determine exactly what is an ‘appropriate’ project and what is not? Do firms need to calculate a certain level of potential ‘social goodness’ in advance? And, if firms need to be encouraged, who is going to do the “encouraging”? Governments? If so, how are they going to “encourage” them? None of these questions are addressed sufficiently and, at the moment, Gates argument rests on an appeal to the altruistic side of firms and their shareholders:

“While companies or individuals may ultimately profit from this work in developing nations, the reward primarily comes in the form recognition and enjoyment.”

On an individual/micro level, such arguments are appealing, romantic even; but at a macro level, they quickly fall apart. I suggest the market, while imperfect, remains the best means society has for allocating scarce resources. This skepticism of the details behind Gates’ vision is evident in the article in the second url below, which balances the first article’s claim that Gates “gets it” with the assertion that he “misses the point”:

“If [Gates’ idea] sounds familiar, it should. It's an attractively repackaged call for activism that's been kicking around for more than four decades under labels like "corporate social responsibility" and "caring capitalism." Gates' well-intentioned suggestions would shift these efforts from domestic charity to international charity aimed at poorer nations.”

Although the author’s argument is a bit crude in places, he is on firm ground in stating that:

“… there is a stronger argument to be made against "creative capitalism," and it is that profits come from serving society. The larger the profits, the better job the company tends to have done. Profit maximization is a worthy goal by itself.”

I also agree with his implication that Milton Friedman’s ideas (expressed in his 1970 article, “The Social Responsibility of Business is to Increase Profits” http://www.colorado.edu/studentgroups/libertarians/issues/friedman-soc-resp-business.html) demonstrate the social value of business. I would add that Friedman’s argument (inflammatory sound bites notwithstanding) is perfectly compatible with a business argument for strategic CSR—that CSR, implemented throughout an organization that adopts a stakeholder perspective and a focus on long term value creation, maximizes social value. A number of these thoughts are included in the article in the third url below:

“Sure, let those who have become rich under capitalism try to do good things for those who are still poor, as Mr. Gates has admirably chosen to do. But a New-Age blend of market incentives and feel-good recognition will not end poverty. History has shown that profit-motivated capitalism is still the best hope for the poor.”

Have a good weekend.
Dave

Bill Werther & David Chandler
Strategic Corporate Social Responsibility
© Sage Publications, 2006
http://www.sagepub.com/Werther

On 'creative capitalism,' Gates gets it
By Michael Kanellos
CNET News.com
January 25, 2008
http://www.news.com/On-creative-capitalism%2C-Gates-gets-it/2010-1014_3-6227712.html

Gates misses the point on 'creative capitalism'
By Declan McCullagh
CNET News.com 
January 25, 2008
http://www.news.com/Gates-misses-the-point-on-creative-capitalism/2010-1014_3-6227726.html

Why Bill Gates Hates My Book
By William R. Easterly
850 words
7 February 2008
The Wall Street Journal
A18
http://online.wsj.com/article/SB120235183917849631.html

Thursday, February 7, 2008

Strategic CSR - McDonald's (Update)

The article in the url below demonstrates a rapid response from McDonald’s to the NYT article (“Straight A's, With a Burger as a Prize”) that was featured in last Thursday’s CSR Newsletter (Issues: Wages, p204; Special Cases of CSR: Fast-Food Industry, p283; McDonald’s, p295 and p305):

“McDonald's has decided to stop sponsoring Happy Meals as rewards for children with good grades and attendance records in elementary schools in Seminole County, Fla.”

To its credit, McDonald’s realized quickly the potential damage this story posed once the national media (i.e., NYT) got hold of it and the firm offered to re-print the school district’s report card jackets immediately. What I find most interesting about this story, however, is that it indicates the difficulties for corporations that license their global brand to relatively independent franchise operations who make decisions locally that have the potential to affect that brand:

“The ''food prize'' program, as it was called, for students of the Seminole County Public Schools in kindergarten through fifth grade was sponsored by the owners of the McDonald's restaurants in Seminole County, in central Florida northeast of Orlando. The decision to end the promotions for the program, appearing on children's report-card jackets, came from executives at McDonald's USA, part of the McDonald's Corporation, the world's largest fast-food business.”

The goal of implementing a strategic CSR perspective throughout an organization, of course, is to prevent such mistakes from arising in the first place and avoid the associated, often predictable, stakeholder backlash:

“In the absence of needed government regulation to protect schoolchildren from predatory companies like McDonald's,'' [Susan Linn, director of the Campaign for a Commercial-Free Childhood] added, ''the burden is on parents to be vigilant about exploitative marketing aimed at children.”

Have a good weekend.
Dave

Bill Werther & David Chandler
Strategic Corporate Social Responsibility
© Sage Publications, 2006
http://www.sagepub.com/Werther

McDonald's Ending Promotion on Jackets of Children's Report Cards
By STUART ELLIOTT
494 words
18 January 2008
The New York Times
Late Edition - Final
4
http://www.nytimes.com/2008/01/18/business/media/18card.html

Strategic CSR - Auditing CSR

The article in the url link below outlines a new idea to standardize and certify a firm’s degree of environmental and social responsibility (Issues: Auditing CSR, p94):

“… a company that seeks certification to become a B Corporation (the B stands for “beneficial”) is required to amend its articles of incorporation to say that managers must consider the interests of not just shareholders, but also employees, the community, and the environment. Companies are also ranked on their answers to a survey of more than 100 questions, covering topics that include the company’s policies on the environment, philanthropy, diversity, and transparency.”

In introducing yet another CSR evaluation standard, however, I am suspicious of the definition this organization uses in determining what constitutes social value:

“A new nonprofit organization called B Lab is hoping to address this challenge by creating a set of strict standards to protect companies and consumers that seek to work for the greater good.”

Surely, all firms that remain in business are adding some value somewhere. The net effect might be negative, but it is important to recognize sales, profits, number of jobs created, amount of taxes paid, etc., etc., as part of a firm’s social responsibility profile. Some CSR advocates will just write this off as a “bare minimum”—i.e., all firms must pay taxes. But, in fact, many firms avoid taxes by registering offshore, and some pay much more in taxes than others (Issues: Patriotism, p258). I think attempts to evaluate social value need to incorporate basic operational issues such as these, as much as they incorporate sexier issues such as the amount of carbon off-setting a firm does (which, after all, usually only involves the firm writing a check).

Take care
Dave

Bill Werther & David Chandler
Strategic Corporate Social Responsibility
© Sage Publications, 2006
http://www.sagepub.com/Werther

New Certification Scheme Aims to Protect Socially Responsible Companies
By Alana Herro
The Worldwatch Institute
January 3, 2008
http://www.enn.com/business/article/28575
Alana Herro of the Worldwatch Institute reports on a new nonprofit organization called B Lab that will approach the challenge of maintaining the integrity of socially conscious businesses that become so successful that they are bought out by larger conglomerates.

Wednesday, February 6, 2008

Strategic CSR - Amazon.com

The article in the url link below is a good story of a firm focused on implementing a stakeholder perspective and being rewarded for its efforts (Issues: Stakeholder Relations, p138). In a way that reminds me of Costco’s continuing ability to ignore shareholder demands for short term returns, Amazon has identified its key stakeholder group (its customers) and, as a result, places customer service as its number one priority:

“When I spoke to analysts and investors, they had all kinds of reasons for Amazon's performance last year. … But I couldn't help wondering if maybe there wasn't something else at play here, something Wall Street never seems to take very seriously. Maybe, just maybe, taking care of customers is something worth doing when you are trying to create a lasting company. Maybe, in fact, it's the best way to build a real business -- even if it comes at the expense of short-term results.”

The article quotes Jeff Bezos (Amazon’s founder and CEO):

“I believe that the success we have had over the past 12 years has been driven exclusively by that customer experience. We are not great advertisers. So we start with customers, figure out what they want, and figure out how to get it to them.”

What is encouraging is the firm’s willingness to stick to its beliefs, irrespective of shareholders’ short term demands (Figure 1.4: The Shareholder Shift—From Investor to Speculator, p14):

“Amazon has really had only one stated goal since it began: to be the most customer-centric company in the world. … Wall Street, however, has never placed much value in Mr. Bezos' emphasis on customers. What he has viewed as money well spent -- building customer loyalty -- many investors saw as giving away money that should have gone to the bottom line. … What Wall Street wanted from Amazon is what it always wants: short-term results.”

Amazon’s success, the article argues, was worth building and waiting for:

“Amazon says it has somewhere on the order of 72 million active customers, who, in the last quarter, were spending an average of $184 a year on the site. That's up from $150 or so the year before. Amazon's return customer business is off the charts. According to Forrester Research, 52 percent of people who shop online say they do their product research on Amazon. That is an astounding number.”

Take care
Dave

Bill Werther & David Chandler
Strategic Corporate Social Responsibility
© Sage Publications, 2006
http://www.sagepub.com/Werther

Put Buyers First? What A Concept
By JOE NOCERA
1843 words
5 January 2008
The New York Times
Late Edition - Final
1
http://www.nytimes.com/2008/01/05/technology/05nocera.html

Tuesday, February 5, 2008

Strategic CSR - Presidential Politics

The article in the url link below adopts a bi-partisan approach to evaluating the past interactions of specific presidential candidates with charitable groups (Issues: NGO and Corporate Cooperation, p192). The goal is to infer how the candidates might treat the non-profit sector if they are elected President or, at least, how they should act to correct perceived past inconsistencies:

“One might hope that a President Romney or Giuliani would advocate against the use of non-profit leadership posts as sinecures for ethically challenged individuals. … A President Obama might want to ensure his plan for national health insurance ensures that non-profit hospitals remember that they are meant to be charitable. … A President McCain or Edwards might want to rethink the ability of politicians to mix their charities and political operations, and to use non-profit law to cloak swathes of their financial operations behind “donor confidentiality”. … A second President Clinton might advocate lifting the secrecy around politicians’ charitable institutions.”

Most of the analysis is far from complimentary:

“At present, the platform of most of the presidential candidates of both parties equates to “I (heart) the non-profit sector”. As the campaign progresses, maybe they will embellish that with substantive commitments to the sector’s ethics, accountability and transparency.”

Take care
Dave

Bill Werther & David Chandler
Strategic Corporate Social Responsibility
© Sage Publications, 2006
http://www.sagepub.com/Werther

‘Presidents’ with thin promises
By RICK COHEN
711 words
19 January 2008
Financial Times
America Ed1
Life & Arts Page 4
http://www.ft.com/cms/s/0/b76d3c54-c623-11dc-8378-0000779fd2ac.html

Monday, February 4, 2008

Strategic CSR - Sustainability

The article in the url link below from BusinessWeek provides some relief from all the doom and gloom about climate change (Issues: Environmental Sustainability, p171). More specifically, it emphasizes the importance of selecting the correct discount rate and set of underlying assumptions in determining the costs of correcting huge social problems, such as climate change:

“… a new analysis from McKinsey & Co. not only pegs the price tag for making substantial cuts at just a few billion dollars, it also shows that at least 40% of the reductions bring actual savings to the economy, not costs.”

I would like to see some external validation of McKinsey’s methodology, and the report only deals with US emissions, rather than also tackling the problematic issue of emissions and economic growth in the developing world, but, if correct, this report presents climate change as a manageable project, rather than an all-or-nothing calamity. As such, it holds out hope that global action can be mobilized.

Take care
Dave

Bill Werther & David Chandler
Strategic Corporate Social Responsibility
© Sage Publications, 2006
http://www.sagepub.com/Werther

Business Week Online
Insider Newsletter
December 07, 2007
********************
The Real Costs of Saving the Planet
Critics say limiting carbon emissions could cost trillions. But a new study suggests the costs are much lower.
by John Carey
http://newsletters.businessweek.com/c.asp?685460&c55a2ee820194f0f&2