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, October 30, 2015

Strategic CSR - Philanthropy

In a roundabout way, the article in the url below makes the case for strategic CSR:
 
"Over half of companies increased their level of corporate giving from 2012 through 2014, and the data in the new Giving in Numbers report suggest self-interest is well served thereby."
 
Philanthropy is only justifiable, from an operations perspective, if it somehow meets the needs of some of the firm's key stakeholders. Whether that is matching the concerns or values of consumers, motivating employees, or furthering R&D, philanthropy can be justified when it creates value for stakeholders:
 
"Economist Milton Friedman once wrote that 'There is one and only one social responsibility of business–to use its resources and engage in activities designed to increase its profits.' The pattern of corporate giving is consistent with that green-eyeshade approach to social responsibility. More companies are giving to support education, especially STEM. … However, giving for disaster relief is down. An audience poll of 200 senior giving executives at the CECP Summit in May found 51% rethinking their donations for disaster relief, mainly because of the difficulty of making a business case."
 
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/
 
 
Corporate Philanthropy and Shareholder Value
By Gregory J. Millman
June 3, 2015
The Wall Street Journal – The Morning Risk Report
 

Wednesday, October 28, 2015

Strategic CSR - Unilever

The headline and opening sentence in the article in the url below suggests that we have discovered how to measure CSR, comprehensively:
 
"Unilever and Patagonia have cemented their position as the world's most sustainable brands, topping the list of sustainability leaders in a new report released Thursday."
 
In fact, the text should read that these companies are "perceived to be the world's most sustainable brands." The reason comes down to the question asked in the survey that generated the data on which the headline was based:
 
"The 2015 Sustainability Leaders Report, produced by think tank SustainAbility and research consultancy GlobeScan, asked 816 sustainability experts in 82 countries which company they thought best integrated sustainability into its business strategy."
 
When you are asking people "which company they thought best integrated sustainability into its business strategy," you are going to generate opinions rather than facts. This would be OK if the opinions were based on knowledge of what is actually going on inside these companies; instead, they are based on what people think is going on. The dangers of relying on perception-based understandings of reality are that, once a perception is formed, it (a) becomes susceptible to group think (i.e., I need to say what others are saying) and (b) becomes particularly difficult to dislodge (i.e., these companies are the best because they were the best last year). As a result, there is a great deal of inertia in lists like this:
 
"Unilever drew top honors for the fifth year in a row, while Patagonia ranked second, the same position it occupied last year. The two companies were followed, in order, by Interface, Marks and Spencer, Natura, Ikea and Nestle. … BASF is the only new company to make the top 11, while two companies – Walmart and Puma – fell off from last year's top 10 list."
 
The sorts of biases that infuse these kind of survey data become particularly apparent when you look at the regional breakdown of perceptions described in the article:
 
"In Asia, for example, India's Tata group is the fourth-highest regarded company, and Shell and Proctor and Gamble both make the top 10. In Africa and the Middle East, 5% of experts identified SABMiller as a top leader. Meanwhile, in Oceania, Westpac came in third, Tesla came in fourth, and HP, Siemens and Novo Nordisk all made the top 10. Unilever and Patagonia, in fact, were the only two companies to make the leader list in every region."
 
Until we are able to create a meaningful measure of CSR that allows us to capture all aspects of operations and compare across industries and cultures, this (no doubt profitable) industry of creating CSR/sustainability lists is going to be driven by anecdotes and perceptions (which is why companies like Enron and BP won so many CSR/ethics awards for so many years).
 
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/
 
 
Unilever, Patagonia cement their positions as the world's most sustainable brands, says new report
By Bruce Watson
May 28, 2015
The Guardian Sustainable Business
 

Monday, October 26, 2015

Strategic CSR - Boards of Directors

The article in the url below seems to me to be a big deal, yet I found it buried on the WSJ's website:
 
"Comptroller of the Currency Thomas Curry said banks' boards of directors are responsible for their firm's culture, the latest indication that regulators are expecting boardrooms to help keep Wall Street out of trouble. … 'It's the job of the board, in combination with management, to articulate what the institution stands for—as well as what it does not stand for—and to make clear what is not acceptable behavior,' Mr. Curry said."
 
If Directors are to be held equally responsible for corporate culture (and, therefore, for ethics transgressions committed by firms), it seems that will have a number of consequences in terms of the expectations that accompany such an appointment (as well as the appropriate level of compensation):
 
"Some directors have been frustrated by the scrutiny, saying regulators are asking too much of people who don't manage bank operations. Mr. Curry pushed back on those criticisms in a speech at the conference hosted by two industry groups, the Securities Industry and Financial Markets Association and The Clearing House."
 
While acknowledging the difficulties of shaping a firm's culture while not also overseeing day-to-day mangement, the government is still looking to Directors for accountability on this issue:
 
"'We don't expect directors to manage the bank, but we do expect the board to look at high level issues that relate to culture, from the compensation structure to how management deals with deviations from the standards the board has established,' [Curry] said in the prepared remarks."
 
The key, or course, will be whether any individual Directors are ever held accountable for their failure to build a healthy culture. Bottom-line:
 
"'Many of the compliance, operational, and safety and soundness problems we've seen over the past decade could never have happened in organizations with healthy cultures,' [Curry] said. 'We look to the board of directors and senior management to set a tone that encourages ethical and responsible behavior and demands individual accountability for failure to act accordingly.'"
 
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/
 
 
OCC Says Boards Responsible for Overseeing Banks' Culture
By Ryan Tracy
June 9, 2015
The Wall Street Journal
 

Tuesday, October 20, 2015

Strategic CSR - TOMS Shoes

The article in the url below deconstructs TOMS Shoes' business model, suggesting it is a means for consumers to feel good, rather than to do good:
 
"Did you buy TOMS shoes because you want to make the world a better place? If so, you should be a little mad. TOMS, of course, is an accessory company that markets itself like a charity … When someone buys a pair of TOMS shoes in the US, for instance, the company donates a pair of shoes to a child in a poor country like Haiti. … But TOMS and the many other companies like it are the charitable equivalents of yes men. They're telling you what they think you want to hear in order to get what they want (for you to purchase trendy, pricey accessories), not what you need to hear in order to do what you want (to have your purchase to do as much good in the world as it can)."
 
The point of the article is that, while TOMS may well be well-intentioned, it is not an efficient way to help those most in need:
 
"TOMS tells you that you that making the world a better place is all about you: that you know best how to help poor people, and that you are so powerful that it will take barely any effort on your part to make a huge difference in the world. … But the truth is that while that kind of messaging is evidently a great way to sell trendy shoes, or to otherwise raise money, it's not a very good way to do charity. At best, it's inefficient: It focuses on programs that waste your hard-earned cash by failing to do the most good per dollar. At worst, it promotes a view of the world's poor as helpless, ineffective people passively waiting for trinkets from shoe-buying Americans. While the shoes themselves probably won't lead to any kind of disaster, that worldview can lead to bad policies and real, serious harm."
 
The author argues that there is a series of assumptions that underpin the business models of firms like TOMS that do not necessarily make sense. For example, TOMS founder, Blake Mycoskie (see Strategic CSR – Toms Shoes) goes to a poor country and sees that the children there do not have shoes. As such, he decides to set-up a company that will provide them with shoes. The assumption is that they need shoes and that, if they have them, their lives will be better than they were without shoes. The author of the article says this is not necessarily so. Instead, she suggests that giving money is a lot more effective way to help those in need. Why should Mycoskie know what is best for these people when, if you give them money, they can decide for themselves? The author notes that there are even examples of TOMS shoes finding their way onto the black market in areas where they are distributed. In other words, rather than wear the shoes, people sell them to get money to help them buy what they really need to improve their lives:
 
"There's a different approach. Instead of giving shoes, why not give poor people cash? If shoes are really what the recipients need, then they can go ahead and buy them. But if not, their options are wide open: They can put the money toward medicine or a crop loan or school fees. Or they can use it to invest in some kind of income-generating venture, such as livestock or a small business."
 
For me, the article is valuable because it demonstrates the limits of what has come to be called 'social entrepreneurism.' There are two points that I want to make about social entrepreneurs:
 
1. I do not understand the difference between what people call a "social entrepreneur" and a regular entrepreneur. Usually, definitions of social entrepreneurs revolve around some desire to solve social problems using business solutions. Isn't that what all entrepreneurs do? If I set up a clothing business or a food store, I am trying to clothe people and feed people, respectively. Are those not social goals?
 
2. In fact, what people call social entrepreneurs today (e.g., TOMS Shoes) are really unsustainable business models that are propelled by consumers' philanthropy. In other words, TOMS Shoes survives because consumers are willing to pay a ridiculous amount of money for very cheap shoes and trust that TOMS Shoes will ensure someone who cannot afford a pair of shoes will receive one. Now, if purchasing shoes for the poor is the goal, I agree with the article's author that it would be more effective to donate the amount of money that TOMS is charging consumers to do this to a charity. TOMS Shoes may have become adept at establishing the supply chain necessary to donate shoes worldwide, but I am guessing there was a huge amount of inefficiency involved in setting it up and that TOMS was probably reinventing the wheel (i.e., that supply chain already existed through other means).
 
The combination of these two points brings me to the main point of today's newsletter – if any of my students approach me and ask how they can make a difference in the world, I tell them they should join a for-profit firm, rather than join a nonprofit or become a social entrepreneur. And I emphasize that the larger the firm they join, the more good they will likely be doing. For-profit firms exist to create value and are usually many times more efficient at doing so than "social entrepreneurs." As I have said a number of times in this newsletter, businesses are not perfect (which is why Strategic CSR exists), but it is these for-profit organizations, embedded within the structure of a market forces, that represent the future. If we want to build a sustainable economic model that does not transport us back to the nineteenth century (or before!), we need to work with what centuries of economic exchange and knowledge of human psychology have taught us about efficiency and progress.
 
For a similar analysis and more insight into the counter-productive effects of TOMS Shoes, see this short video: https://www.youtube.com/watch?v=hX0g66MWbrk
 
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/
 
 
Buying TOMS shoes is a terrible way to help poor people
By Amanda Taub
July 23, 2015
Vox Topics
 

Monday, October 19, 2015

Strategic CSR - The internet

The article in the url below questions the value of the internet from a society-wide perspective. It is a review of a book titled The Internet Is Not The Answer, which takes a broad look at how the internet has changed us and the way we interact, and questions whether we are better off as a result:
 
"Andrew Keen should proudly wear the label of 21st-century Luddite. His new book … is a packed compendium of all the ways digital life casts aside basic human virtues in favor of a rapacious, winner-takes-all economy."
 
The review highlights two aspects of Keen's argument – the effects of the internet on economic exchange and on social exchange. In terms of commerce, Keen notes that the most successful internet companies today employ a fraction of the people of the companies they are replacing:
 
"He points to what he describes as Amazon's brutally efficient business methodology, which has squeezed jobs out of every sector of retail, according to a 2013 Institute for Local Self-Reliance report that Keen cites. The report says brick-and-mortar retailers employ 47 people for every $10 million in sales, while Amazon employs only 14. … [Also] consider that the 700-person start-up Airbnb, which allows users to rent their apartments like hotel rooms, was valued at $10 billion this past spring [now $40 billion], about half as much as the Hilton corporation, which employs 152,000 people. Meanwhile, … the car-sharing company Uber employs 1,000 people and is valued at $18.2 billion, which gives it about the same valuation as Avis and Hertz combined — except that those two car-rental companies employ almost 60,000 people."
 
In terms of social exchange, Keen focuses on what David Brooks has called the "culture of me" (see Strategic CSR – Moral character):
 
"In a chapter called 'The Personal Revolution,' he describes our descent into 'the pre-Copernican belief' that the universe revolves around us: Social networks such as Instagram, Facebook and Twitter encourage an ahistorical mentality, and while they promise to get us in touch with others, they usually breed narcissists instead. … Consider: 'Almost 50% of the photos taken on Instagram in the United Kingdom by 14-21-year-olds are selfies, many of whom use this medium to reify their existence.'"
 
In conclusion, the reviewer states:
 
"The Internet is, indeed, not the answer. It is, rather, the all-consuming question of the first half of the 21st century."
 
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/
 
 
No, the Web isn't making the world a better place
By Michael Harris
January 2, 2015
The Washington Post
Late Edition – Final
36
 

Friday, October 16, 2015

Strategic CSR - Logos

If you think branding is easy, a quick look through the failed logos presented in the article in the url below should be a good reminder that it is surprisingly easy to screw things up. A good example is this logo advertising maple syrup from the state of Vermont:
 
 
No doubt these logos went through various stages of review. In spite of this, it is quite stunning how the creators failed to see what is obvious in hindsight. Clearly, many of the examples provided should have been caught ahead of time, such as this example of the logo for Sun Rise Sushi (a sun rising behind a Japanese temple or tea house):
 
 
For others, it only became apparent how inappropriate they are subsequently, such as the 1973 logo for the Catholic Church's Archdiocesan Youth Commission:
 
 
For the full article containing all the examples, see the url below.
 
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 15 Worst Corporate Logo Fails
By Laura Sampler and Aaron Taube
January 11, 2014
Business Insider
 

Wednesday, October 14, 2015

Strategic CSR - Wells Fargo

The article in the url below focuses on an initiative at Wells Fargo to measure the happiness of its 260,000 employees. The goal is to improve the general perception of the industry on the assumption that happy employees are less likely to act in a way that damages the finance industry's (and, by extension, Wells Fargo's) reputation:
 
"At Wells Fargo, managers have dreamt up a new ratio to track alongside such banking stalwarts as provision coverage and capital adequacy. It is called the happy:grumpy ratio, and measures how many cheery staff the bank employs for every curmudgeon."
 
And Wells Fargo is happy to report good progress:
 
"Only five years ago happy bankers (measured by their own assessment) outnumbered the grumpy ones by 3.8 to 1; by last year there were eight times as many Pollyannas at Wells Fargo as there were miserable sods."
 
In spite of Wells Fargo's optimism, others are less sure the bank is capturing what it purports to be measuring:
 
"If what makes bankers happy is taking risks and making money, they will be even happier when they are up to no good — provided it results in lots of money falling into their laps. Furthermore, if you are the sort of person who thinks it fine to diddle your bank out of billions of dollars, you are not going to worry about giving misleading answers on a staff satisfaction survey."
 
Perhaps the task is unrealistic simply due to many humans' attitude about their work:
 
"According to a Gallup survey of 25m workers there are twice as many unhappy as happy ones in the world."
 
And surveys, even if anonymous, are notoriously difficult methods to gauge the accurate intentions/beliefs of the individuals who are being asked:
 
"… there is little point in asking employees whether they are happy or not. The answer surely depends on who is asking, on what mood the subject is in, on their temperament and on what they consider 'happy' to mean. To aggregate 260,000 unreliable answers and then treat the result as data on a par with tier one capital, is really quite frightening."
 
In contrast, the author offers three alternative metrics that she believes represent a more effective measure of whether employees are truly content (and, therefore, less likely to commit harm):
 
"The first is staff turnover. If people are more than normally unhappy, they tend to leave. … The second measure is the ratio of what the bank's hotshots get paid to what the security guard gets. We know that perceived unfairness and inequality both make people unhappy; so when this gap gets wider the culture worsens. … [The] third measure … is to monitor how many friends people have at work. All the general happiness data show a powerful correlation between the number of close friends and happiness."
 
Whether these alternative measures of 'happiness' would enable firms (and regulators) to prevent future scandals is less clear. What it would do, however, is give an effective measure of the firm's culture, which "would give prospective employees an excellent idea as to whether they would like to work there, or not."
 
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/
 
 
Wells fargo's happy:grumpy ratio is no way to audit staff
By Mark Binelli
March 29, 2015
The New York Times Magazine
Late Edition – Final
36
 

Monday, October 12, 2015

Strategic CSR - Philanthropy

The article in the url below reports on a philosophy graduate student, Matt Wage, who took a job in finance. He did so not to earn as much money as possible, but so that he can donate as much money as possible:
 
"Wage reasoned that if he took a high-paying job in finance, he could contribute more to charity. Sure enough, he says that in 2013 he donated more than $100,000, roughly half his pretax income."
 
The article focuses on the effect Wage can have due to the amount of money that he earns (and donates):
 
"One of the major charities Wage gives to is the Against Malaria Foundation, which, by one analyst's calculation, can save a child's life on average for each $3,340 donated. All this suggests that Wage may save more lives with his donations than if he had become an aid worker."
 
Wage was a student of the moral philosopher Peter Singer, who argues in a book published earlier this year that a utilitarian approach should guide an individual's philanthropy:
 
"The book, The Most Good You Can Do, takes a dim view of conventional charitable donations, such as supporting art museums or universities, churches or dog shelters. Singer asks: Is supporting an art museum really as socially useful as, say, helping people avoid blindness? After all, an American aid group, Helen Keller International, corrects blindness in the developing world for less than $75 per patient. It's difficult to see how a modest contribution to a church, opera or university will be as transformative as helping the blind see again."
 
Although the author has some reservations about Singer's approach if taken to the extreme ("There is more to life than self-mortification, and obsessive cost-benefit calculus, it seems to me, subtracts from the zest of life"), he sees the value in what Singer is proposing:
 
"Singer's argument is powerful, provocative and, I think, basically right. The world would be a better place if we were as tough-minded in how we donate money as in how we make it."
 
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/
 
 
The Trader Who Donates Half His Pay
By Nicholas Kristof
April 5, 2015
The New York Times
Late Edition – Final
SR11
 

Friday, October 9, 2015

Strategic CSR - Bribery

The article in the url below indicates that, finally, the rest of the world is taking the issue of bribery seriously:
 
"Anti-bribery enforcement actions conducted outside the U.S. outnumbered the actions taken in the U.S. in 2014, according to a new report. Countries other than the U.S. took a total of 15 enforcement actions against foreign bribery, according to the 2014 edition of the Global Enforcement Report from business anti-bribery group Trace International. … The U.S. took 13 actions in 2014, the report said."
 
Hopefully 2014 indicates a trend that will continue because the rest-of-the-world has a lot of catching-up to do:
 
"Overall, the U.S. still dominates, however: it's taken 70% of the 269 total foreign bribery enforcement actions from 1977 to 2014 recorded by Trace International."
 
1977, of course, was when the Foreign Corrupt Practices Act was passed in the U.S. following the Congressional hearings into the Watergate scandal. One of the interesting things that investigation unearthed was the slush funds companies had created to make surreptitious payments to Nixon's re-election committee. What Congress also discovered, however, was the companies were also using these slush funds to make payments (bribes) to foreign elected officials in order to win business contracts. The FCPA was passed in an attempt to prevent such payments and begin holding corporations to account for the illegal and unethical actions of their employees overseas. The modern-day ethics and compliance profession traces its roots to this period.
 
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/
 
 
Global Anti-bribery Enforcement Actions Outnumber U.S. in 2014
By Samuel Rubenfeld
June 4, 2015
The Wall Street Journal
 

Wednesday, October 7, 2015

Strategic CSR - Meaningful work

The article in the url below challenges the idea that work, for human beings, is merely a transactional process. This effort, however, appears to fly in the face of the available data:
 
"How satisfied are we with our jobs? Gallup regularly polls workers around the world to find out. Its survey last year found that almost 90 percent of workers were either 'not engaged' with or 'actively disengaged' from their jobs. Think about that: Nine out of 10 workers spend half their waking lives doing things they don't really want to do in places they don't particularly want to be."
 
The article explores the argument that, contrary to what these data suggest, we actually seek meaningful work:
 
"We want work that is challenging and engaging, that enables us to exercise some discretion and control over what we do, and that provides us opportunities to learn and grow. We want to work with colleagues we respect and with supervisors who respect us. Most of all, we want work that is meaningful — that makes a difference to other people and thus ennobles us in at least some small way."
 
The danger is that, if the firms that employ us assume that we only show up because of the money, this ends up becoming a self-fulfilling prophesy that decreases, rather than increases, our productivity:
 
"Work is structured on the assumption that we do it only because we have to. The call center employee is monitored to ensure that he ends each call quickly. The office worker's keystrokes are overseen to guarantee productivity. I think that this cynical and pessimistic approach to work is entirely backward. It is making us dissatisfied with our jobs — and it is also making us worse at them. For our sakes, and for the sakes of those who employ us, things need to change."
 
In contrast, the author argues that, for the organizations that provide it, the benefits of creating meaningful work far outweigh any costs involved:
 
"In his 1998 book, 'The Human Equation,' which reviewed numerous studies across dozens of different industries, the Stanford organizational behavior professor Jeffrey Pfeffer found that workplaces that offered employees work that was challenging, engaging and meaningful, and over which they had some discretion, were more profitable than workplaces that treated employees as cogs in a production machine. For example, he cited a study of 136 companies across many different industries that had initial public offerings in 1988. It found that companies that placed a high value on human resources were almost 20 percent more likely to survive for at least five years than those that did not. Similar differences in success were found in studies that compared the management practices of steel mills. And a study of United States apparel manufacturers found that sales growth was more than 50 percent higher in companies with enlightened management practices than in those that did things the old-fashioned way."
 
Going back to the Gallup survey results—if 90% of us truly are unhappy in our work, we need to ask why that is. That we structure our society in a way that fails to take advantage of the innate creativity and enthusiasm that exists in all of us is mindboggling. I tell my students that the two things we do most of in our lives are sleeping and working. As such, after graduation, they need to make sure they buy a good mattress and get a good job. But that advice assumes there are good jobs (and mattresses) to be found. The data suggest that, for jobs, this is not the case. If true, why is it so difficult to build organizations that fulfill, rather than depress? Isn't that what we are supposed to be doing in business schools—identifying how to create managers that are capable of getting the most out of their employees (along all kinds of metrics)? If managers are failing to do this, then we have also failed (at least partly) in what we are supposed to be doing.
 
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/
 
 
Rethinking Work
By Barry Schwartz
August 30, 2015
The New York Times
Late Edition – Final
SR1
 

Monday, October 5, 2015

Strategic CSR - Reputation

I have often wondered why firms/CEOs worry so much about negative headlines. Sure, the unwanted attention is uncomfortable and there can be short-term consequences, but I am less confident that stakeholders have long enough memories to inflict lasting damage.
 
Perhaps the difference comes down to systemic issues versus one-off mistakes. In other words, Lumber Liquidators' mislabeling of their laminate flooring to mask the level of toxic materials the product contains was damaging because it was something built into the way the firm did (does?) business. Similarly, Nike's sweatshop issue still resonates (in spite of the firm's best-practice approach to its supply chain today) because it was so ingrained in operations. In contrast, mistakes like the hacking of Target's computer systems that resulted in the credit card details of 40 million customers being stolen does not appear to have affected revenues.
 
Along these lines, the article in the url below analyses the reputational consequences of the IT security breaches that are increasingly occurring at large companies:
 
"While reputational damage is often presented by technology suppliers as the consequence of security breaches, evidence suggests the public has a short memory, though senior executives will continue to pay the price for a bad leak."
 
Specific examples appear to support this perspective:
 
"Last year's hacking of Apple's iCloud service, for example, in which intimate photos of celebrities were stolen and published online, has done little to dent its financial performance. However, while the Sony Pictures breach did not lead to a boycott by movie-goers, the company's co-chair, Amy Pascal, stepped down after the scandal. Despite this, in its Q3 2014 financial statements, the company said it 'doesn't expect to suffer any long-term consequences' as a result of the attack."
 
The absence of long-term effects on firm performance are attributed to the lack of attention of key stakeholders, such as the firm's customers:
 
"'Negative reputational impacts are totally exaggerated, in my opinion,' says Gartner analyst Avivah Litan. 'I think customers forget about a breach very quickly and it doesn't impact their interest in buying goods or services from the breached company.'"
 
Ironically, the more security breaches that occur, the less impact they appear to have:
 
"Marc van Zadelhoff, vice-president of strategy in IBM's security division, agrees: 'The more frequently data breaches occur, the more desensitised people become, resulting in less of an impact to the brand's reputation.'"
 
The five examples of serious data breaches that the article discusses also make clear that the sooner a firm reveals the breach and the more transparent it is about the causes, the more forgiving the public is likely to be. Of course, the more forgiving the public is likely to be, the greater the chance that a similar event will occur elsewhere.
 
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/
 
 
Fear of reputational damage may be overhyped
By Jessica Twentyman
May 20, 2015
Financial Times
FT Special Report – The Connected Business
2
 

Thursday, October 1, 2015

Strategic CSR - Sugar

The article in the url below contains a quiz to test your knowledge about the amount of sugar (in terms of teaspoons, each of which is equivalent to 4g) in the following everyday foods:
 
     1.      330ml can of Coca-Cola
     2.      500ml bottle of Glaceau Vitamin Water
     3.      330ml can of Old Jamaica Ginger Beer
     4.      300g tin of Heinz Classic Tomato Soup
     5.      190g Rustlers Quarter Pounder Cheese
     6.      380g portion of Weight Watchers Macaroni Cheese
     7.      175g pot of Muller Light Banana And Custard Yoghurt
     8.      Mars Bar
     9.      215g bag of Haribo Starmix
    10.     25g portion of Tesco Yogurt Coated Strawberry Fruit Bites

There are 10 questions in all. Please go the article to complete the quiz if you would like to know the answers for each of these foods.

Have a good weekend.
David
David Chandler & Bill Werther
Strategic Corporate Social Responsibility: Stakeholders, Globalization, and Sustainable Value Creation (3e)
© Sage Publications, 2014

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/


Can you guess how many teaspoons of sugar are in these foods?
By Hannah Gould
June 4, 2015
Guardian Sustainable Business
http://www.theguardian.com/sustainable-business/quiz/can-you-guess-how-many-teaspoons-of-sugar-in-food-quiz