Strategic: Test 4
CSR strategy
- a company's specific contributions combination of socially beneficial activities with contributions of time, money, and other resources
case: Royal Dutch Shell
-Brent Spar Incident and Ogoni unrest in Nigeria 1993-95-->develop well known stakeholder analysis -show transition from Gen 1 CSR to Gen 2 CSR
Whole Foods: successful alignment
-ambitious vision for the future of the world and the company's role in it -value creating strategy that can be pursued many ways over time -conscious development of skills to accomplish the value creation -relentless encouragement to do more and better -create a strong adaptable organization
ethical behavior
-behavior consistent with societal expectations and judgments of what is right or wrong -not materially different from exception of individuals -corporations are created by society for a purpose~~engine of social and economic values
social responsibility
-big areas of CSR to balance: economic returns, legal compliance, ethical performance, philanthropic or prosocial activities
Patagonia mission
-build the best product -cause no unnecessary harm -use business to inspire and implement solutions to the environmental crisis
Patagonia: production and logistics
-choose business partners carefully -work with them over time to do better environmentally and with quality -identify new suppliers who can help implement new capabilities -be a good business partner for them
1st generation CSR
-corporate responsibilities in hierarchal order -"old school" now-->be a good corporate citizen is of least importance -"philanthropic" model of CSR-->emphasizes donations to charity~~not core businesses -if all businesses are responsible, make money and donate~~world is a better place
CSR
-corporate social responsibility -a company's duty to operate in a honorable manner, provide good working conditions for employees, encourage workforce diversity, be a good stewart of the environment and actively work to better the quality of life in local communities where it operates and in society at large
rationale for 2nd generations CSR
-corporations have responsibilities that go beyond the production of goods and services at a profit -these responsibilities involve helping to solve important social problems, especially those they have helped create -corporations have a broader constituency than stockholders alone -corporations have impacts that go beyond basic marketplace transactions -corporations serve a wider range of human values than can be captured by a sole focus on economic values
Herman Miller core values
-curiosity and exploration: these values are underground by encouraging risk and practicing forgiveness -engagement about "ownership" of the company, its problems, responsibility to step forward with solutions-engaged in company and community -performance: its everyone's job at the company-->high performance at all levels is necessary to enrich lives of employees, delight customers and create shareholder value -inclusiveness: in order to succeed here, must value whole person-->all workers have special talent and potential according to De Pree (founder) -design: related to "how" the company solves problems, satisfying is not good enough at Herman Miller -foundations: the company values its past without being ruled by it a better world: by pursuing sustainability and environmental wisdom~~better place to work -transparency: if you "own" a decision, then let people see how it was made
Whole Foods: higher purpose statement
-embrace responsibility to co-create a world where each of us, our communities and our planet can flourish
modern 3rd generation CSR-->Patagonia
-emphasizes "sustainability" as an integrating concept -requires more innovation and constant improvement -responsible leadership, rather than compliance or narrow sphere of influence -not afraid to push conventions -much more long term, global, societal in nature -companies will lead the way to a healthier, more sustainable society and world
modern 3rd generation CSR
-emphasizes "sustainability" as integrating concept -requires more innovation and constant improvement -responsible leadership, rather than compliance or narrow sphere of influence -not afraid to push conventions -much more long term, global, societal in nature -companies will lead the way to a healthier, more sustainable society and world
2nd generation CSR
-emphasizes stakeholder well-being~~affect by varying degrees -key assumption stakeholders and corporation have open communication channels -donations should be targeted for relevance -integrate decisions around the mission to include making everyone better off -our business takes care of all of its stakeholders -firm is a network of interactive stakeholder groups
corporate citizenship
-emphasizes the goal of exceeding, not just meeting society's needs
Patagonia: human resource
-employee "fit" at company is important -serious playfulness on the job -brutal honestly about results -frequent at the top of "best companies to work for" lists -less than 5% turnover
ethical universalism
-everyone everywhere would agree with this or should agree with this -trust, respect, fairness, responsibility, caring, citizenship
Whole Foods: philosophy
-expensive/transparent commitment to vision, mission and core values
Patagonia: governance
-few large shareholders-->"family firm" model strong continued involvement of founder, Chouinard -very strong corporate culture -bold and innovative firm-->donations of 1% of revenue compared to other firms is a lot -unclear if this would work for a publicly owned firm
Herman Miller
-furniture company over 100 year old -known as a great place to work -produces award winning decision -interesting human capital model -strategy involves a mix of product and market development -adopted Toyota Production System for manufacturing quality and efficiency -new 2013 initiative around "living office"-->open space, connections, group work -known to be very sustainable~~care about what goes into their products
task 1: people, skills, structure
-get the right people -managerial talent can be acquired or developed from within -motivation matters often as much as talent or experience -good at figuring out what needs to be done; skilled at execution -develop the right skills (capabilities): -resources and capabilities produce competencies-above adequate performance -three methods: internal, acquired, accessed through partnerships -structure: decentralized vs. centralized
Herman Miller: people, structure, and culture
-goal is high performance and adaptive culture
benefits at Herman Miller
-health insurance, vision care, and prescription plans -flexible spending accounts short term and long term disability insurance -life insurance and accidental death insurance -long term care insurance -gym memberships -employee assistance programs -100% tuition reimbursement -concierge services-->dry cleaning, greeting cards, take-home meals -on site services-->massage therapy, banking and person trainers
Shell pioneered stakeholder engagement
-identify a broad group of stakeholders, especially those impacted by business behavior -assess the stakeholders regularly to clarify and discuss these impacts -strategize in a collaborative way about what is possible and practical in future -deliver and accepts info among stakeholders to remind disagreements -key goal: create meaningful lasting relationships
Whole Foods: declaration of independence
-leaders in quality of food business~~standard of excellence for food retailers
task 2-8
-make sure the resources flow to the strategic units for strategic units for strategic behavior -ensure thoughtful policies and procedures reward the right behavior and not barriers -continuous improvement needs to be continuous -enough of the most useful information must be tracked as efficiently as possible -rewards and incentives keep everyone moving in the right direction -high performance and adaptive cultures can align and correct misalignments -leaders need to communicate, focus attention, support others and show their commitment to the strategy
ethical relativism
-norms vary from place to place so "when in Rome, do as the Romans do"
triple botom line
-people, planet, profit -"shared prosperity" model-->take care of all stakeholders -express leadership on societal challenges -main claim: all of these produce a profit for the company
typical ethical problems
-poor oversight of individual rent-seeking behavior within an organization -pressure to meet or beat performance goals, especially short term-->also known as "end to justify the means" -a problem of alignment and goal setting -company culture that confuses individual wealth, greed, or money along with competitive performance and value creation
triple bottom line
-profit, planet, profit-->"share prosperity model" -at Patagonia, environmental stewardship allows care for customers, employees, and suppliers -all of these produce a profit for the company
Patagonia: products
-quality: -build and take care of a great product -"throwaway consumerism" is not sustainable -reduce environmental impact: -dig into material and supply chain -identify new solution~~repair network -innovation: -create new materials and new products~Synchilla and Capilene -pioneer emerging markets such as organic cotton
Whole Foods: core values
-sell highest quality natural and organic products available -satisfy, delight and nourish our customers -support team members excellence and happiness -create wealth through profits and growth -support and serve our local and global communities -practice and advance environmental stewardship -create ongoing win-win partnerships with suppliers promote the health of our stakeholders through healthy eating education
integrative social contracts
-universalism first wherever possible, then relativism after, and subservient to universal norms
Whole Foods: sustainability
-vision of sustainability includes a future of children and grandchildren living in a world that values human creativity, diversity, and choice
Patagonia: sales and distributions
-whole sale to small speciality retailers (1000 retailers, $145 m in sales, 45% gross margin) -retail stores (52 stores, $100 m, 65% gross margin) -synergies around environmental messaging and customer care levels
8 "rights": top managerial tasks
1. right organization-->people, skills, and structure 2. right resources in the right places-->allocating to strategy~~critical activities 3. right policies and procedures, no more than necessary-->should aid in strategy execution 4. right continuous improvement programs-->or at least have one 5. right information the right way for the right people-IOS to aid strategy implementation 6. right rewards for the right performance objectives 7. right culture for the mission 8. right leadership to aid implementation
