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


Monday, August 31, 2009

Strategic CSR - Wall Street

The article in the url below argues that public disenchantment with Wall Street as a result of the financial crisis risks spreading into a general resentment against business. This, the author suggests, could result in legislative backlash that impedes the recovery and set-back “American capitalism” for years to come. The author highlights three issues on which he thinks business leaders need to speak that can help turn public opinion back in businesses’ favor:

“… executive pay; the need for an updated "social contract" that fits 21st-century realities; and a strategy to make service jobs that cannot be offshored a path to the middle class. … failure to address them will fuel a backlash that affects every company's licence to operate. Let us take them in turn.”

In short: First, on executive pay, there needs to be a strong correlation between risk, performance, and reward; second, a more complete social contract allows firms to adopt responsibilities, while also tackling intractable social problems, such as healthcare provisions; and, third, building sustainable jobs at home that emphasize highest services and quality over lowest cost will help ensure the public views business as part of the solution, rather than one of the main causes of the problem:

“Chief executives face a choice. They can help bolster workers' security, or they can hire more security guards and hunker down. … A group of 10 far-sighted business leaders who sense the threat (and the opportunity) could get this ball rolling. With business nearing the brink, who will answer the call?”

Take care
David

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


Business needs to speak out against greed
Matt Miller
967 words
21 April 2009
Financial Times
USA Ed2
11
http://www.ft.com/cms/s/0/2717447c-2dda-11de-9eba-00144feabdc0.html

Friday, August 28, 2009

Strategic CSR - United Airlines

You may have heard about or seen the YouTube video over the summer by the musician whose guitar was broken on a United Airlines flight in March, 2008:

http://www.youtube.com/watch?v=5YGc4zOqozo

The article in the first url below outlines the background to the event:

“Canadian singer Dave Carroll is now on the map, courtesy of United Airlines (UAUA). In March 2008 he was changing planes in Chicago on the way to a gig when he saw baggage handlers tossing instruments. Finding his $3,500 Taylor acoustic guitar damaged, Carroll tried for more than a year to get United to pay for the $1,200 repair.”

When United continued to deny any responsibility (largely based on a technicality—the firm claimed he had failed to file a complaint within 24 hours; a claim Carroll denies in his video), Carroll responded by writing the song and posting it on YouTube, where, as the article in the second url below reports, it quickly became a hit:

“According to the Times of London, "...within four days of the song going online, the gathering thunderclouds of bad PR caused United Airlines' stock price to suffer a mid-flight stall, and it plunged by 10%, costing shareholders $180 million. Which, incidentally, would have bought Carroll more than 51,000 replacement guitars."”

At present, this video has had over 5,250,000 views on YouTube and there are multiple postings:

“Can United's 180 million dollar loss be chalked up entirely to a song on YouTube? Probably not. Did the song have a very real and very negative effect on United's brand equity? Absolutely.”

A strategic approach to CSR involves firms putting systems in place to meet the needs of as broad a number of stakeholders as possible. The goal is to avoid the backlash often associated with a short term focus on minimizing costs, which, as United demonstrates, can turn out to be more expensive in the long run.

To see the benefits of doing things differently, see this response video posted by a musician who has been flying Southwest for many years and, as he says, “Southwest Never Broke My Guitar.” The song is not as good, but I think the value of having a loyal consumer base, rather than one that is suspicious, quickly becomes apparent:

http://www.youtube.com/watch?v=u1SMcaVekVE

Have a good weekend.
David

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


Broken-Guitar Hero

Christopher Palmeri
Businessweek
August 3, 2009, p17.
http://www.businessweek.com/magazine/content/09_31/c4141btw643725.htm

Broken Guitar Has United Playing the Blues to the Tune of $180 Million

July 30, 2009
By: Ravi Sawhney
Fast Company Magazine
http://www.fastcompany.com/blog/ravi-sawhney/design-reach/youtube-serves-180-million-heartbreak

Wednesday, August 26, 2009

Strategic CSR - Welcome back!

Welcome back to the Strategic CSR Newsletter!
The first Newsletter of the Fall semester is below. As always, your comments and ideas are welcome.


The article in the url below discusses the idea that the ecological environment is an identifiable stakeholder of the firm with rights that are protected by law (Figure 1.1: A Firm’s Stakeholders, p4). These rights are being realized in the U.S. by a dozen municipalities that have passed laws to this effect. The article leads with the example of the small town of Shapleigh, Maine:

“At a town meeting, residents voted, 114-66, to endow all of the town’s natural assets with legal rights: “Natural communities and ecosystems possess inalienable and fundamental rights to exist, flourish and naturally evolve within the Town of Shapleigh.” It further decreed that any town resident had “standing” to seek relief for damages caused to nature - permitting, for example, a lawsuit on behalf of a stream.”

But, the article points out that a similar sentiment is also being expressed elsewhere in the world:

“… in 2008, when Ecuador adopted a new constitution, it recognized nature’s “right to exist, persist, maintain itself and regenerate its own vital cycles, structure, functions and its evolutionary processes.” A campaign is also underway in Europe for a UN Universal Declaration of Planetary Rights, which would attempt to enshrine such principles in international law, following the model of the Universal Declaration of Human Rights.”

Advocates for legal representation of the environment present their case as a natural extension of the granting of human rights to other groups in society that have not always had them:

“After all, not so long ago, slaves and women were in some legal regimes deemed property, just as nature is today. Now we all accept universal human rights. The concept of animal rights has also become familiar, if much more contested. Advocates of this agenda see the extension of rights to ecosystems as the natural next step. And they believe it could spark a profound shift in our relations with nature, leading to more effective environmental protections.”

In addition:

“Other nonhuman entities have long enjoyed certain rights under our legal system: ships and corporations are two examples of entities entitled to “personhood,” meaning they can bring lawsuits to court.”

The idea is controversial and the article has an interesting discussion of some of the legal and philosophical questions it raises. It also discusses less controversial solutions. One example, which does not involve recognizing that non-human life has legal rights and standing to sue, is for society simply to pass a law that assigns value to the things it seeks to protect:

“The distinction can be subtle. It doesn’t mean we must diminish the worth we assign to nature; it just means acknowledging that we as a society are assigning the value. We could, for example, liberalize standing for humans - make it easy for people to sue to protect nature, without granting official standing to the natural objects.”

Although controversial, the issue is central to the stakeholder model we present in Strategic CSR—all organizations (whether for-profit or nonprofit) have a vested interest in identifying their key stakeholders and working to meet their needs and expectations wherever possible. In addition, however, the rationale a firm uses to identify its key stakeholders is central to its ability to integrate a CSR perspective throughout all aspects of operations. The principle that the environment is a common resource that should be protected from the self-interest of a minority, for example, is an important component of the Moral Argument for CSR (Chapter 1, p15). Those firms, however, for whom the environment is a key strategic resource (Nestle is mentioned in the article) have a vested interest in protecting it from over-exploitation (Chapter 1: The Economic Argument for CSR, p18). Alternatively, even firms that do not draw on the environment for key raw materials or do not care about over-exploitation should, at a minimum, recognize that they likely have many other key stakeholder groups (consumers, government, NGOs) who do care and, therefore, that it is counter-productive to act in a way that contravenes these stakeholder expectations (Chapter 1: The Rational Argument for CSR, p17).

Take care
David

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


U.S.: Sued by the forest
by Rebecca Tuhus-Dubrow
The Boston Globe
July 19th, 2009
http://www.corpwatch.org/article.php?id=15413