Corporate Citizenship- Final

8/11/2019 Corporate Citizenship- Final

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Corporate Citizenship

Making the Business Case.

Public Affairs Management, New Delhi


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Milton Friedmans position that the responsibility ofbusiness is exclusively to maximize profit forshareholders, has lost the debate. Alice Tepper-Marlin, President, Council on Economic

Priorities

If we are the leading corporate citizen --- we will

attract better employees and the highest caliber ofpeople. Theyre going to want to come work for acompany like Ford. William Clay Ford. Jr., Ford Motor Company

The 21 st Century company will be different. Many ofBritains best -known companies are recognizing thatevery customer is part of the community and thatsocial responsibility is not an optional extra. Tony Blair, Prime Minister of United Kingdom


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What is Corporate Citizenship:

To manage effectively a companys actual andpotential economic, environmental, and social

impacton the COMMUNITIES where it operatesand on SOCIETY as a whole,

while enhancing corporate REPUTATION and increasing PROFITS.

STRATEGIC PHILANTHROPHY


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Whats behind the timing?

1. Globalization and growth in competition2. Increased size and influence of companies,

particularly through mergers and acquisitions3. Retrenchment or repositioning of government

and its roles4. Information

5. War for Talent 6. Growth of global civil society activism7. Increased importance of intangibles


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Business Goals of Social Investments

Enhance Corporate ImageDevelop Trust in the CompanyDevelop Local Talent

Support Programs with Specific Goals

Improve Ability to Recruit Protect Current Investment

Retain Employees Broaden Tax Base

Expand Customer Base Create New Markets

Meet Compliance Requirements Operate More economically


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Business Impact Of Corporate

Citizenship

Reputation DevelopmentRisk ManagementProduct, marketing and distribution innovation

Organization and network developmentStrategic design and management


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The 10 Largest Corporate Contributors(U.S.: 1996)

($ Millions)Merck & Company 140.5IBM 100.8 Johnson & Johnson 88.5

Pfizer Inc. 85.5 Hewlett-Packard 71.6 General Motors 66.7

Eli Lilly 66.3 Bristol Myers Squibb 64.7 Microsoft 59.2 Intel 55.6


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10 Largest Corporate FoundationsBy Total Grants (U.S. : 1996)

Foundation Grant ($) AT&T 37,738,769Wal-Mart 32,571,556

Ford Motor Company 28,948,869 GE 28,637,618Proctor & Gamble 27,341,322General Motors 27,041,994 GTE 23,558,526General Mills 23,000,048Chrysler Corporation 22,701,371

SBC 21,261,053


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Corporate Leaders in Educational Reform:

Arthur Anderson Community Learning Center AT&T Learning Network Bell Atlantic Project Explorer

Bell South Superintendents Leadership Network Hewlett-Packard E-Mail Mentor ProgramIBM Corporation Reinventing Education GrantMicrosoft Corp. teacher.training@microsoft Panasonic Foundation Partnership ProgramUnited Airlines Virtual Trade Mission **Aditya Birla Group Aditya Birla India Centre,

London Business School
mailto:teacher.training@microsoftmailto:teacher.training@microsoft


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Managerial Challenges forCorporate Citizenship


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Managing New Directions

Mix cash, product, people, servicesIntegrate branding,marketing, image andreputation with community

Focus on long-term nonprofit/NGO partnershipsGlobal scope, local emphases

Even more alignment with business

Venture philanthropySocially responsible / sustainable investing


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Key Steps in New Citizenship

Define principles and values Define stakeholders Define key issues for stakeholders

Define and apply measures Benchmark performance Assess performance

Source: The Corporate CitizenshipCompany, David Logan


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Managerial Challenges

Measuring and reporting value ( e.g..Triple Bottom Line)Doing more with same or lessStrategic use of technologyStaying focused

Communicating values across cultures /applying global frameworksLinking programs with values


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Managerial Positions Before

Senior Vice President, CommunityActivities

Vice President, Corporate CommunityRelations

Vice President, Philanthropy

Vice President, Corporate SocialResponsibility


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Managerial Positions Emerging

President, International Foundation

Vice President, Global Community Affairs

Vice President, Global Social InvestmentVice President, Stakeholder Relations

Director, Community Partnerships

Director, Emerging Issues


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Critical Success Factors

Top level Leadership and CommunicationTransparency

Stakeholder EngagementManagement SystemsPerformance MeasurementConsistencyInternal buy-in and coordinationAlign message and performance

Source: Enron


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Facts to Remember

1. CEOs say the environment & sustainabledevelopment is the prime future success factor

2. Boards say citizenship on their agenda or basis of adecision in past six months

3. Managers say challenge is growing one globalidentity and integrating with business decisions

4. All agree reputation, image, brand, and talent

recruitment are major drivers


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Corporate Citizenship in the 21st Century

Demonstrate commitment to societys values

Insulate society from negative impacts ofoperations, products, and services

Share benefits with stakeholders and

shareholdersDemonstrate do well by doing good


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New Roles of Business inSociety


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The Body Shops Key Principles

The relationship between value creation andresource consumption determines sustainablesuccessMeasuring the broader impact of business is key tocontinuous improvementBusiness success is dependent on relationships

with key stakeholders


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Shells Strategy Principles

Key audiences are special publics - the opiniondriversSocial responsibility is just one issue: addressing

all reputation components requires a PR-ledapproachGlobalization of special publics needs a globalstrategy with local nuance

Centre-led but operation unit ownedCredible engagement on an adult to adultapproach


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Redefining Corporate Excellence

Traditional Formula

Excellence = f [ Turnover

ProfitabilityExportsSalesCosts . ]


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New Economy DefinitionExcellence = f [ Business Conduct

Business EthicsShareholder ValueCRMCorporate Governance

Employee BrandingSocially Sensitive Investment FundsPeople PracticesInnovation

ImaginationSpeedTechnologyNetworked Culture

Knowledge Management ..]


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Key Players / StakeholdersE = f [ Corporate Leaders

Civil societyNgos Mncs

Think-tanksdonor AgenciesHR Specialists ]


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Trendsin Glo b al Corp o rate

Ci t izenship


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The increasing tendency to look to corporations, notgovernment, for leadership in social and environmental problems

Philanthrophy will increasingly be required to make a strategiccontribution to business by leading to enhanced reputations andfinancial gain

Strategic Philanthropy and corporate citizenship will go global

More companies will accept and value a broadened social andenvironmental performance role


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Shareholder activism and socially screened investment funds will

proliferate.

Positive corporate images will continue to influence consumerchoice.

NGO partners will serve as informal consultants to business

Corporate conduct will come under increased scrutiny fromcompetitive high-tech media, which will monitor and exposeirresponsible practices.


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The business of auditing corporate performance will expandbeyond financial statements to social and sustainable developmentperformance reporting

Employees will be more attracted to socially responsiblecompanies.


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Public Affairs ManagementD-3/3492 Vasant Kunj

New Delhi 110 070 (India)email : [email protected]

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Corporate Citizenship- Final