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, August 29, 2014

Strategic CSR - Carbon tax

Writing over the summer, Hank Paulson (yes, that Hank Paulson, George Bush's Treasury Secretary during the financial crisis) constructed one of the best arguments I have seen from the Republican Party in favor of action on climate change:
 
"The solution can be a fundamentally conservative one that will empower the marketplace to find the most efficient response. We can do this by putting a price on emissions of carbon dioxide — a carbon tax. Few in the United States now pay to emit this potent greenhouse gas into the atmosphere we all share. Putting a price on emissions will create incentives to develop new, cleaner energy technologies."
 
Of course, an intelligent argument on this issue from the right, does not mean many others on the right (or left, for that matter) will listen.
 
Have a good weekend.
David
 
David Chandler & Bill Werther
 
Instructor Teaching and Student Study Site: http://www.sagepub.com/chandler3e/
Strategic CSR Simulation: http://www.strategiccsrsim.com/
The library of CSR Newsletters are archived at: http://strategiccsr-sage.blogspot.com/


The Coming Climate Crash
By Henry M. Paulson, Jr.
July 17, 2014
The New York Times
Late Edition – Final
SR1
 

Wednesday, August 27, 2014

Strategic CSR - Philanthropy

The article in the url below is a story about the level of charitable donations by FTSE 100 companies:
 
“The amount donated to charity by FTSE 100 companies – including cash, in-kind donations and the value of volunteered hours – has almost doubled, rising by £1.2bn since 2007, an average of 0.7% of pre-tax profits in 2012. It's a significant increase especially given the difficult economic factors in play during that time.”
 
The article appears in a newsletter published by The Guardian Sustainable Business Network (http://www.theguardian.com/sustainable-business). In other words, The Guardian treats philanthropic donations as an important part of CSR/sustainability. It is unfortunate and counter-productive that this is the case—especially so since, essentially, the article also makes the case that such spending is not a very efficient investment for these firms. A big reason for this is that, apart from the nonprofit that received the gift, none of the firms’ other stakeholders are aware that these firms are spending their money in this way:
 
“When asked how many FTSE 100 companies make donations to charity every year, the average guess was just over a third. The reality is quite different – nearly all of the FTSE 100 companies (98%) – report giving every year. In 2012 all 100 reported making a donation.”
 
It is hard to understand why this situation persists. Why is philanthropy still considered a significant part of CSR? For some, no doubt, it is considered to be the primary component of CSR. But, this is ludicrous when you think through what it means. A common theme across definitions of CSR is the idea of “giving back.” In other words, how does the firm create value for society, broadly defined. It never ceases to amaze me that philanthropy should be considered by anyone to be the main vehicle in which a for-profit firm is supposed to “give back” to society. For-profit firms are efficient value-creating organizations. Now, to be sure, that value it not evenly distributed (and we can debate how effective they are at present and how effective they should be in an ideal world). But, nevertheless, for-profit firms create the most value for society as a whole when they focus on what they are good at, which is core operations.

The conclusion of the story below is that firms would benefit more from their donations if they just did a better job of communicating activity they are already doing (i.e., so that their donations become more widely known). What the article should have focused on is how much better off society would be if the firms just stopped giving charitable donations and, instead, invested that money in their core operations and product innovation.
 
Take care
David
 
David Chandler & Bill Werther
 
Instructor Teaching and Student Study Site: http://www.sagepub.com/chandler3e/
Strategic CSR Simulation: http://www.strategiccsrsim.com/
The library of CSR Newsletters are archived at: http://strategiccsr-sage.blogspot.com/


New survey shows FTSE 100 companies have increased charitable giving
By Klara Kozlov
August 14, 2014
The Guardian
 

Monday, August 25, 2014

Strategic CSR - Starbucks

The article in the url below covers the summer announcement by Starbucks that it is willing to pay for the tuition of its employees to attend university—even part-time employees. The article offers a good summary of the agreement:
 
"On June 16th Howard Schultz, the boss of the coffee retailer, told a meeting in New York of hundreds of top-performing employees—and their families—that the firm will pay for their university education. From later this year, it will cover all the tuition fees in the final two years of college for staff who work at least 20 hours a week, and may also contribute to the cost of their first two years. The only conditions are that they must get their degree online from Arizona State University, and achieve a certain number of course credits."
 
I have seen some commentators complain that the employees have to pay a large amount out-of-pocket before Starbucks starts contributing (i.e., the first two years of tuition). Nevertheless, the benefit strikes me as exceedingly generous. The interesting question, therefore, is why would Starbucks do this? Beyond the "highly caffeinated PR" suggested in the article, one fact mentioned (almost as an afterthought) suggests one of the primary motivating factors:
 
"Although the attrition rate at Starbucks is well below the fast-food industry's average of around 110% a year, it is still said to turn over two-thirds of its workforce annually."
 
That is amazing. An average of 110% turnover means that most fast-food companies lose their entire workforce, on average, every year. While some people obviously stay on, which means that other positions are filled multiple times over, this is a huge cost of doing business in this industry. As such, if the "average fast-food company" has got any sense whatsoever, I would think it is something they are trying to fix. While high-school students working for extra pocket money are never going to stay around for long, it seems that offering fulfilling careers for the adult proportion of the workforce would be a good investment:
 
"[Howard Schultz, Starbucks CEO] thinks shareholders will benefit because employees will be more motivated and loyal. … Reducing [employee attrition], and thus the cost of recruiting, training and integrating new workers, could save a fortune. Mr Schultz says he hopes eventually to offer similar help with higher-education costs to employees outside America. … Starbucks is hardly the first firm to pay college fees for some staff, though other employers typically do so only to give them specific skills needed by the firm, and require them to remain on the payroll for some period after completing the course. Starbucks employees will have no such obligation, though Mr Schultz says he hopes they will see enough career potential with the company to want to do so."
 
Take care
David
 
David Chandler & Bill Werther
 
Instructor Teaching and Student Study Site: http://www.sagepub.com/chandler3e/
Strategic CSR Simulation: http://www.strategiccsrsim.com/
The library of CSR Newsletters are archived at: http://strategiccsr-sage.blogspot.com/


From baristas to BA-ristas
June 21, 2014
The Economist
Late Edition – Final
63
 

Friday, August 22, 2014

Strategic CSR - Starbucks

The article in the url below, which reports on a series of events that occurred this week at a Starbucks in St. Petersburg, FL, is a good story to start the weekend:
 
"The acts of kindness began at 7 a.m. Wednesday with a woman, her iced coffee and a stranger's caramel macchiato. The woman paid for her own drink, then asked to pay for the drink of the person behind her in the drive-through. That person returned the favor and paid for the person behind, and so did that person, until the employees at the St. Petersburg Starbucks on Tyrone Boulevard began a tally on green laminated paper near the drive-through window. By 1:30 p.m., the chain had reached 260 customers."
 
How did the chain keep going?
 
"People ordered a drink at the speaker. When they pulled through to the next window, the barista, Vu Nguyen, 29, leaned through and said with a smile that their drinks had already been paid for by the person in front of them. Would they like to return the favor?"
 
Now, I recognize that a degree of peer group pressure was involved in extending the chain, with some customers saying "they didn't want to be the jerk to end it." But, still, there are not enough good stories to go around for me to pass this one up:
 
"The baristas inside began to think of what they might do if it lasted until 10 p.m., when the Starbucks closed. Perhaps they could put the final amount on a gift card and continue the next day? They tallied 378 people by early evening."
 
In the end, the chain lasted 11 hours. That is, an uninterrupted sequence of 378 customers who found out their drinks had been paid for by the customer in front and, in turn, agreed to pay for the customer behind them. There are stories of customers pulling up, hainvg only ordered a small coffee for themself, but being willing to pay for the order behind them of multiple drinks and sandwiches. There was also a report of one guy returning for another coffee later in the day to see if the chain was still going. Moreover, once news got out, it was reported that the line started up again the next day. The NPR story covering the event is here:
 
 
Now, if we could just get everyone to care about each other's planet to the same extent as they clearly care about each other's coffee!
 
Have a good weekend                                                  
David
 
David Chandler & Bill Werther
 
Instructor Teaching and Student Study Site: http://www.sagepub.com/chandler3e/
Strategic CSR Simulation: http://www.strategiccsrsim.com/
The library of CSR Newsletters are archived at: http://strategiccsr-sage.blogspot.com/


Nearly 400 people 'pay it forward' at St. Petersburg Starbucks 
By Weston Phippen
August 20, 2014
Tampa Bay Times
 

Wednesday, August 20, 2014

Strategic CSR - Welcome back!

 
 
Welcome back to the Strategic CSR Newsletter!
The first CSR Newsletter of the Fall semester is below.
As always, your comments and ideas are welcome.
 
 
I hope you all had a good summer.
 
As we dive into a new semester, the article in the url below offers a positive (??) thought to start us off on the right note—a lesson in how to convey power and authority:
 
"… a study called 'Using Abstract Language Signals Power,' published this month in the Journal of Personality and Social Psychology, shows that projecting power is incredibly simple. Just communicate in abstractions. Details convey weakness. In one of the seven experiments, participants read quotes from a politician who described an earthquake as killing 120 and injuring 400; later, when he simply said it was a national tragedy, subjects thought he was a better leader."
 
I find that as I go through life, navigating the complexities of trying to formulate the social responsibilities of the for-profit firm, what strikes me is the need for less complexity. Clearly, it is a little taxing for humanity to deal with the complexities of climate science, economic theory, and human psychology—much easier to stick our heads in the sand and hope it will all get better before we die. As the author of the study succinctly (but unhelpfully) put it:
 
"'Being completely vague will just make you sound stupid,' she explains. 'Bulls––– is best when it has a kernel of truth in it.'"
 
Just what we need in life—even less complex reality and even more duplicitous simplicity. I'll have to remember to pass that on to my students. After all, there's nothing much at stake, right?
 
Looking forward to a productive semester filled with complexity!
David
 
David Chandler & Bill Werther
 
Instructor Teaching and Student Study Site: http://www.sagepub.com/chandler3e/
Strategic CSR Simulation: http://www.strategiccsrsim.com/
The library of CSR Newsletters are archived at: http://strategiccsr-sage.blogspot.com/


How to get ahead by Speaking Vaguely
By Joel Stein
July 21-27, 2014
Bloomberg Businessweek
63