Engaging Business as Business

Threats to the environment. 

 

Threats to society.

 

Threats to the economy.
 

What if these problems were not threats? What if they were opportunities? The strategy of engaging businesses to social issues via charities and public relations is outdated. In this mindset, looking after social issues is seen as detrimental to a company’s bottom line. As a result, these initiatives are seen as secondary goals. When the going gets though, they will often be neglected or completely abandoned. This is where Creating Shared Value (CSV) comes into play; it allows a company to help solve societal issues while also improving their shareholder value. How? By engaging business as business. In a 2012 article by Mark Kramer, titled “Better ways of doing business: Creating shared value”, he explained how using business resources to drive social progress can be sustainable and profitable. According to Kramer, there are three primary facets to CSV
 

1) Reconceiving products and markets: GE has committed to spend $1 billion towards a cancer project and $100 million of this will be spent through their Healthymagination division. They are using this $100 million to develop a new business ecosystem. This is their way of reconceiving products and markets. When they spend money towards cancer research, it allows them to further the development of new equipment and procedures. This allows researchers to explore new avenues. In the long run, this should accelerate the development of cancer research. By being at the forefront of development, new opportunities and markets will be created. GE will be in a preferential position to provide for the market as they played a key role in creating it.

2) Redefining productivity in the value chain: Coca-Cola bottlers in East Africa have created micro distribution center (MCD) that involve thousands of micro-entrepreneurs serving as the local distribution centers to retail outlets. Many of the MDC owners are first-time entrepreneurs, and approximately a thousand are women. This model deals with a key distribution challenge for the company and accounts for more than 80% of the company’s sales in East African countries. By doing this, Coca-Cola has redefined the productivity in their value chain. They have found a way to meet a core business need while also providing local economic development opportunities in a high potential emerging market.    

3) Enabling local cluster development: In the “Creating Shared Value” article from Porter and Kramer, the authors give a great example to demonstrate this concept. Yara, the Norwegian-based mineral fertilizer company, realized that there was a logistical problem in Africa due to a lack of proper infrastructure. Farmers were not able to get efficient access to fertilizers and other agricultural supplies. Additionally, they had difficulty transporting their crops to market efficiently. To solve this issue, Yara teamed up with the local governments in Tanzania and Mozambique as well as with the norwegian government. They invested $60 million in a program to develop roads and ports in those areas. The impact in Mozambique alone is expected to benefit more than 200,000 small farmers and create 350,000 new jobs. This will help grow the local agriculture, which will in turn help Yara grow its business.     

The article and the examples show how CSV enables companies to benefit from the threats to the environment, to society and to the economy without leading to its detriment. By engaging businesses as business, it allows them to better serve society by doing what they do best. When they take a CSV approach to an issue, they are more likely to be committed to improving the situation at hand in the long run. Companies are more deeply invested in the process, as they have many levels of resources at work as opposed to a strictly financial contribution. At the end of the day, businesses need to be sustainable. Creating shared value demonstrates that it is possible to solve societal issues while also turning a profit.

 

Marcel Dupuis and Justin Landry

Creating Shared Value

In this video, several senior managers discuss creating shared value (CSV).  Their views often resort back to sustainability and long-term profitability.  To these managers, CSV is not about doing good and philanthropy, but about recognizing and taking advantage of business opportunities that also cater to societal values and needs.  Corporate social responsibility (CSR) is somewhat incorporated into CSV by showing care and compassion for local communities, however the main difference includes the fact that CSV creates value in the form of increased profits for the corporation, while also helping society.
However, these increased benefits do not come without costs; companies have to invest both time and money to investigate where they can change their processes and alter certain aspects of their products.
In order for this concept to be accepted within the workplace, managers and CEOs have to buy in and take the lead in grounding the institution.  This means that by examining workplace culture, these managers can alter certain aspects in order to shift the focus on to creating shared value.
None of this is possible without complete cooperation between the organizations involved as well as local governments and NGOs.  By working together and combining resources, corporations can make huge, positive impacts throughout the world, and hopefully set positive trends for the future.


- Alex Healy

Thank You!

In the digital age, it has become a reality that email, texting, and interactions over social media have replaced what would otherwise have been face-to-face communication in an previous era.  Tens of emails are swapped back and forth over the course of a day and I think that it is important to remember context and to be mindful of basic social courtesies.

Do You Really Need To Say Thank You, a Harvard Business Review blog article written by Peter Bregman discusses best practices when dealing with email.  It tells the story of a CEO sending an email to an employee several levels below to pay him compliment for his performance at a recent meeting.  The employee doesn't bother to respond to the email and how later, when Tim was being considered for a promotion, his lack of response may have contributed to him not having received a promotion.

As a generation having grown up in the digital age, what can be said about the way we interact with others by email and online?  Do you make a practice of acknowledging such emails and if so, for what reason?  As soon-to-be graduates about to enter the workforce, what practices should be observed when interacting with others digitally?

-Patrick

CSR

This is a short article about Corporate Social Responsibility. The author
talks about the consequences of CSR and if is important to your company.  He
gives an example of Pepsi Co. when they tried to launch a competition to its
consumers called the “Refresh Project”, and that it would give away $20 million
to the winner.  The competition was about who could invent the best refreshing
idea that would change the world.  During this time Pepsi actually lost part of
its market share and sales declined 10% in early 2010!


The author says that there is four keys to a healthy growth strategy and those
are; Internal Alignment, Clear Focus, Aggressive Marketing, and Undistracted
Consistency.  And he says that as long as the company behaves responsibly,
makes a profit, and creates jobs, increases wealth of the shareholders – which
these things are the only thing that matters in the end.


My question to you is; how does a large corporation balance CSR while
maintaining high returns for its shareholder, should it only focus on
shareholders wealth?  And when does CSR become contradicting with Shareholders
returns ?

http://www.businessweek.com/articles/2012-08-09/corporate-social-responsibility-distinction-or-distraction


-- Mario Basque

The business case for gender equality in the workplace

Yesterday in class, we discussed about how women have become more active than in the past at workplace. Women are getting advantages over men in the job market. And even in the top level positions of university and college, numbers of women are growing.

http://www.computerweekly.com/blogs/witsend/2011/09/the-business-case-for-gender-equality-in-the-workplace.html

This article mainly talks about gender equality in the workplace.  The article points out that one reason why women should be treated as equal as men. It is because there is an increase in profits when women are in senior positions of company. It is proved by the study of 500 firms in US that promoting women to senior positions are 18%-69% more profitable than the median Fortune 500 firms in their industries. Today, however, most of companies treat their employees especially women with lack of full understanding of gender equality. It could cause more problems in the future. Therefore, companies with more knowledge would be more successful later in the future.

As I am a Korean I will talk about Korea as an example. Now in Korea, there is the upcoming presidential election. There are three leading candidates and one of them is female from the ruling party. This becomes a big issue in Korea and there are many people who support her. People cannot imagine about female president in the past, but now there is an increasing of female who belong to in high positions. So I think there will be more female participation and leaders in the future.

By. Sangjun Kim, Jihyun Shin

Economics is telling me no, but my body's telling me yes!

In 2008, The liberal party suggested a carbon tax be put in place in Canada. They wanted to impose a $10 a tonne carbon tax on all green house gas emissions. I recently came across an article written by David Murrell who teaches economics at UNB. His article titled "Eight Arguments Against a Carbon Tax", describe the economic effects of charging businesses for their amount of green house gas emissions. This got me to wondering, can a country with such a small population like Canada have an effect on total global pollution?

The article argues that it is somewhat redundant for Canada to impose a tax on emissions because other countries such as China and India who have no intent to stop this pollution will make up for our lack of pollution. We are therefore slowing our economic growth while allowing other countries to become even more dominant in certain industries. How are we to decide if it is worth us to stop pollution, which will have a minimum impact on global pollution, and by doing so slowing our internal economy? Perhaps a better question is: Is it worth slowing economic growth to do something which bigger countries have no  interest in? In compassion,  in game theory, would you put a lot of effort in a paper, if your partner was not going to put in half as much? You would most likely realize that you would benefit by putting in a similar amount of effort into the paper as your partner would opposed to putting in the extra amount. So why are we worrying about pollution if no other bigger countries are?

Another point made throughout the paper is that the end consumer will end up paying for this carbon tax. The companies who are imposed with these taxes, will end up increasing their prices. By doing so, we are making our economy more challenging then it must be. This could encourage Canadians to leave to more economically friendly countries. This is in no way going to punish the companies. We know that good such as oil are income inelastic, meaning that even if the price increases, consumer will still purchase it. Therefore, we are just hurting end consumers, not the companies.

There are other points throughout the paper, but what I am questioning to you, Canadians, is how are you to choose between moral, and economic choices. Would it be worth possibly damaging our economy to make a minimal amount on the world pollution levels? Is Canada able be economically sustainable with such options? or are we just a follower, opposed to a leader in the industry?

Cheers,
Dustin Caissie

http://www.policystudies.ca/documents/Eight_Arguments_against_a_Carbon_Tax.pdf

CEOs & Leadership Culture

 We seem to encounter this concept of leadership quite regularly in the business community, but we still struggle to clearly define it and understand the role it plays within organizations.  When we think about leadership in business, we often think of the CEO of the organization.  Thus, not surprisingly we have focused much of our discussion on the impact and power of the CEO. 

I came across an interesting article in Forbes magazine, which is relevant to the subject http://www.forbes.com. The author makes the argument that leadership and strong business performance is not all about the CEO, but that “long term business performance comes from leadership culture and careful and continuous development of leadership at all levels.” Now this is not exactly a revolutionary idea, and you might be wondering, as I was, what does leadership culture actually mean?

Well apparently, research shows that certain best practices in leadership development have a greater impact on long-term business performance than almost any other factor.  Certain high performing companies such as IBM, General Mills, and Procter & Gamble actually invest a significantly larger portion of money than their counterparts in developing their own leadership development programs.  This does not mean sending managers away to leadership seminars, but more so supporting and training employees to better achieve the goals and vision of the organization in their everyday work, whether that is global citizenship, collaboration, or innovation, for example.

I thought it was interesting how the author’s view of leadership strategy had an internal rather than external focus.  I agree that in order to lead the organization CEOs need to align the business strategy with the human side of the organization.  Thus, they must first understand the mission and goals of their organization and then clearly communicate it to their managers and teams to drive motivation towards this common purpose.  It’s about building leaders within all levels of the organization so that a legacy of leadership remains even as CEOs come and go.

But then I considered, who is responsible for developing the leadership culture in the first place, was it not the CEO?  And what about changing environments, does the CEO not then have to change the organization’s mission and values, thereby changing its leadership values?  I would say that today’s rapidly changing business environment calls for transformational leadership; a process in which I believe the CEO is quite instrumental.   This type of leadership calls for a charismatic leader who is able to transform the organization; this requires the ability to articulate a vision, coach individuals, and set high performance standards.  But would the leadership culture disappear under the direction of a CEO lacking in these qualities? Does it not require both a CEO capable of transformational leadership as well as an established leadership culture within the organization in order to achieve long-term success?

- Rebecca Hebb