Manging for Sustainability

1. Study Material
For the course
Managing For sustainability
(3 credit course)
MBA Semester IV
Unit-I (48 slides)
by: Prof.S.V.BIDGAR
PIRENS TECHNICAL CAMPUS
INSTITUTE OF BUSINESS MANAGEMENT AND ADMINISTRATION

2. Introduction to CSR
• Increasing awareness of business and its environment
interdependency.
• Discontinued totally private bodies view of business.
• Shifted managers responsibility from business owners to the
society.
• Effect of enterprise functions on the linked persons.
• Here comes the need to strike the social balance of opposing
forces.
• Kenneth and Andrews concept-in terms of objective for
societal welfare and restrained individual or organizational
activities.

3. Concept of CSR
• Coined in different ways
-business responsibility to perform its economic functions
efficiently.
-obligation to consider societal interest while…
-Philanthropic and charitable activities
• Social responsibility in fact beyond economic function
• On the contrary, utilization of its economic power to protect
society.
• H.R. Bowen’s definition-in terms of obligations and policies.
• Difference between Social obligations and Social
Responsibility

4. Nature of CSR
• Survival-organizational environmental interactions-
responsibilities towards society
• Two types of Responsibilities(due to organizational,societal
and environmental governance)
• Social responsibility as decision taken by Management that…
• Two principles
• Significant for the growth
• Areas of Social Responsibility.
• Social Responsibility in terms of Stakeholder
• CSR is proactive in Nature
• Pattern varies according to the organization

5. Forces for CSR
Consumerism
Self Interest
Trade Unions
Gov. Control
Trusteeship(societal caretaker concept)
Professionalization

6. Relevance of CSR in present day
Business environment
Business as society creation
Work for all enterprise interest
Public Image improvement
Social Power
Leadership and Competence

7. Relevance of CSR in present day
Business environment
Economic Objectives Promotion
Professional Managers demand
Free enterprise and avoid Govt Control
Social Impact

8. Critics to CSR
Economic Goals Dilution
Vague Concept
Burden on Consumers
Unfamiliarity of managers with social affairs
Misdirection of Resources

9. Critics to CSR
Responsibility without power
Unjust overburden
Un measurable
Improper role

10. Limits to CSR
• Ensuring Profitability and Viability
• Not Encroaching Government authority
• Competent managers
• Reciprocity principle
• Socioeconomic power Balance
• Social Cost Benefit Analysis

11. Enforcing CSR
I. Legislative Measures
i. Representation of Social Groups
ii. Social Audit
iii. Clause in Memorandum

12. Enforcing CSR
II. Voluntary Measures(consumer and business view)
i. Consumer organization to compel Businessmen
ii. Exercising effective control forming trade unions
iii. Control over Management forming SH associations
iv. Developing suitable organizational Culture

13. Barriers to CSR
I. The Organization(profitability objective)
II. The Division(again profitability issue arises)
III. The Individual Manager(ability to take
employee into confidence)
IV. The Industry(seems very clear and
understandable)

14. Meaning of Corporate Citizenship
• Degree to which business is responsible to meet SH
requirements.
• Aim of business to elevate the quality and standard of living
• Increase in demand for socially responsible corporations and
thereby punishment exists.
• Negative Corporate Citizenship practices.
• Act of proactively addressing societal issues while building SH
partnership.
• Integration of philanthropic values in Good Corporate
Citizenship.
• Management of organizations wider influence within the
society for mutual benefits(Marsden and Andriof1968)

15. Nature of Corporate Citizenship
1. Universality
2. Strategic oriented
3. Social Responsibility fulfillment
4. SH Oriented
5. Globalized

16. Benefits of Corporate Citizenship
1. Improves environment
2. Goodwill creation
3. Sharpens about company in minds
4. Improves HR
5. Promotes Development

17. Stages of Corporate Citizenship
• Studied by Philip Mirvis and Bradley Googins at
Centre for Corporate Citizeship,Boston (keep in mind)
• Refer table…

18. Formulating and Implementing CSR
Policy
• Simple meaning of CSR implementation(daily decisions and
process) TALKING THE TALK AND WALKING THE TAILK
• Necessity (avoidance of dissatisfaction, less chances of trouble)
• Steps of strategies to implement CSR commitments:
I. Develop CSR decision making structure
II. Planning and executing CSR business plan
III. Setting targets
IV. Employee engagement
V. CSR training
VI. Addressing problematic behavior
VII. Build communication plans

19. Develop an Integrated CSR Decision
making structure
• Alignment of CSR into overall objectives and goals-automatic
customers consideration while taking corporate decisions.
• Different CSR decision making structures
• Transparency, accountability and performance dimensions
• Assignment of CSR to board members
• Appointing CSR expert member on the board
• Adding CSR responsibilities to the board
• Appointment of senior officer and committee having
particular departmental CSR responsibility

20. Plan and Execute CSR Business Plan
• After structure identifies accountable personalities
• It should be incorporated into company’s business
plan
• Transforms words into action

21. Setting Measurable Targets and Making
out Performance Measures
• Intermediate targets for effective implementation
• A broadly used approach (making out commitment
objectives-building up KPI-working out measurement
methods-measure the results)
• SMART Guidelines
• Exemplified
• Modification of the objectives and thereby…

22. Engage Employees and others related to
CSR commitment
• Vital role of the employees in implementation
• Success with Senior managers and for success implementation
in the hands of employees
• This necessitates the proper communication between both
• When believed that CSR is just HOT AIR,becomes difficult…
so senior managers need to be serious.
• Act of engaging implies act of awareness creation.

23. Design and Conduct CSR Training
• Continuous training implementation
• Languages of the employees to be accounted for training
module design
• 5 step approach
1. Need analysis
2. Learning objectives
3. Programme designing
4. Programme implementation
5. Evaluation

24. Creating Mechanisms for Addressing
Problematic Behavior
• Detecting against bad going by auditing and
monitoring
• Most sensitive part of the CSR activities
• Approach creation for employees trying to be
illegal or disobedient.
• Assigning responsibility with the senior
managers.

25. Building Internal and External
Communications
• CSR info should be communicated to employess
by all means possible
• Up to date agenda put up in meetings at all levels
• Fine external communication through selected
people of the organization
• Commuication comprises of awareness
campaigns,advertising,speeches
• Websites importance in this.
• Customization of communications

26. Meaning of stakeholders
• Individual, groups or organizations associated
• Affected directly or indirectly by Business
performance
• Variety of information used from stakeholders
for decision making.
• The type of information disseminated
depends upon the type of stakeholders

27. Types of Stakeholders
I. Internal Stakeholders( insiders, direct effect, involved
directly with the actions)
II. External stakeholder
-no need to put up a chart over here.
III.Difference between the two(very clear)
Employees
• 1
Managers
• 2
Owners
• 3

28. Responsibility of Business towards
Stakeholders(Customers)
• Meet the ultimate aim first
• Paramount importance of this responsibility
• Perfection in all terms as expected by the customers
• Some basic responsibilities:
Production according to requirement
Prompt and adequate service
Attention towards complaints and
objections

29. Reply to enquiries
Co-Operation
Consumer-product research
Correction step in distribution system
Efficiency enhancemnt

30. Responsibility towards shareholders
Safety of Investment
Dividend
Direct participation in management
Information dissemination

31. Innovation and Growth
Public Image
Shareholders obligation(reversed responsibility)

32. Responsibility towards
workers/employees
Fair wages and security
Opportunities to the workers
Proper working conditions and welfare
Trade Union Rights

33. Continued…
Proper Recognition
Proper training and promotion
Grievance Handling System
Company code of conduct

34. Responsibility towards Community
Education spread
Meetings
Help to Local Government
Fair competition
Other responsibilities

35. Responsibility towards State
Abide by Laws
Co-operation
Taxes and Duties
Other like….

36. Stakeholders Interest
• Necessary after identifying stakeholders.
• Some interested in further investments while
others not.
• Stakeholder mapping tool.
• So…
Identify
Stakeholders
Discover
Interest

37. Identifying Stakeholders
• Thinking beyond obvious.
• Easy to identify primary stakeholders but indirectly
affected isn’t that easy.
• Some recommended ways:
1. Brainstorm
2. From the community of interested geographical
area.
3. Advice from organization related in the effort.
4. Getting ideas from the stakeholders themselves or
itself.
5. If possible and as you feel…ADVERTISE.

38. Discovering Stakeholders Interest
• Potential beneficiaries with FOR
• Self centered or greedy
• Examples of economic concerns in support.
• Organizations ,agencies and institutions having stake
• Cultural reasons blocking interest
• Ideology of people like for example those against
government
• Legislators and policy makers view
• Staff members added or reduced work in carrying out a
effort
• Family concerns….Example

39. Influence of Stakeholders
Governance
and Social
Responsibility
Customers
and
Community
Employees
Business
Partners

40. Bottom of the Pyramid opportunities
• Aspiring poor's >handful of rich
• Investment in Bottom of Pyramid means
-reducing povety
-prevent social decay,
-prevent terror
• If not will the difference betwee poor and rich countries will
get broaden
• Needs innovation of technology and models

41. BOP(4 CONSUMER TIERS)
Tier 1
75-100 million
$20,000
Tier 2 & 3
1,500-1,750 million
$1,500-20,000
Tier 4
4,000 milliion
< $1,500

42. BOP(Invisible opportunity)
• MNC,s judges markets on the basis of income levels
• The result is discarding of BOP opportunities
• Need of influencing view of developing countries by MNC’s
• Some assumptions needed to be re-examined
1. Poor not the target customers
2. Poor's inability to afford
3. Poor’s can use outdated technologies
4. Managers not interested in humanitarian.
5. Can leave BOP to governmental
6. Hard to find managers interested in BOP

43. Strategies for tapping BOP
• Investmnet
intensity
• Margins
• Volume
• Reduction in
resources
• Recyclability
• Renewableenergy
• New Delivery
formats
• Robust product
creation
• Prod Dev.
• Manufacturing
• Distribution
Price
Performance
Duality views
ProfitabilitySustainability

44. 4 Keys to flourish BOP
BOP
KEYS
Creating Buying
power
1.Credit access
2.Generate income
Shaping
Aspirations
1.Con edu
2.Sust Dev.
Tailoring local
solutions
1.Targeted Prod Dev
2.Bottom up
innovation
Improving
access
1.Distribution
systems
2.Comm links

45. Putting it all together
Innovation is
the answer

46. How Environmental-social issues
shape the market
• Considerable impact on company’s performance
• Extent of impact varies from company to company

47. Some issues depicted in Global Risks 2011 sixth
edition of World Economic Forum
Water quality and Scarcity
Climate change
Energy
Air pollution
Waste and Waste management

48. Biodiversity Loss
Forest and Soil Degradation
Earthquakes and Volcanic eruption
Population growth and Demographics
Food production and safety

49. Poverty
Human health and safety
Human Rights
Corruption
Social unrest