Week 7: Corporate Responsability in today's economic reality

Corporate Social Responsibility is a continuing reality for many US businesses, but as the US economy continues to stagger, businesses carefully measure what is affordable. Often, corporate programs that support communities simply become unaffordable, while others that support the “bottom line” integrate into the corporate culture.

In 2008, the Economist published the article; “Just good business: A special report on corporate social responsibility” describing the growth in corporate in social responsibility. The trend grew out of companies like Green Suites' Planet Green which asked people staying at hotels to reuse their towers to save on water (Green Suites 1993). The trend showed that corporate culture could save money and raise awareness. I have found that even hotels in Chisinau Moldova have cards on their sinks asking patrons to reuse towels to save local natural resources. It may be in Moldovan and Russian, but the graphics give it away.

Corporate Social Responsibility also reached out beyond a companies bottom line. Companies like Unilever, Levi Strauss, and GlaxoSmithKline have, for decades, worked social programs as part of their corporate model (Klein, P. 2012). Sometimes companies will charge more for products because they target a specific audience. For example, a co-worker was telling me that he paid an additional ten dollars for New Balance running shoes because they were made in the United States instead of at an overseas plant. He felt pride for supporting US workers and manufacturing.

While Corporate Social Responsibility has become more engrained in both corporate culture and US consumers, the current economic realities give pause to companies when social acts risk losses. (Klein 2012) Often, though, it is as much the consumer as leadership that promotes corporate responsibility.

So my question to this weeks readers is: What's you “Save the Planet” idea that promotes good business and the environment?

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Resources:

Franklin, D. (2008). Just good business: A special report on corporate social responsibility. The economist. January 19. pp.1-14. (full article).

Green Suites (1993) [Company website]. Retrieved from http://www.greensuites.com

Klein, P. (2012). Why has corporate social responsibility stalled? Forbes. October 22. Retrieved from http://www.forbes.com/sites/csr/2012/10/22/why-has-corporate-social-responsibility-stalled

Levick, R. (2012). Corporate social responsibility for profit. Forbs. January 11. Retrieved from http://www.forbes.com/sites/richardlevick/2012/01/11/corporate-social-responsibility-for-profit/

Application Week 7 - Erin Spaulding

Corporate social responsibility and financial performance are engrained in the majority of work I so for Habitat for Humanity East Bay/Silicon Valley. Almost daily, I work with corporations in the Silicon Valley and East Bay to help shape and fulfill their philanthropic and volunteer goals through our mission. Corporate social responsibility is not just about writing a check or mobilizing volunteers but involves measurable goals that have to be tracked (Porter & Kramer, 2006).  I have seen great strategy from some corporate leaders and less meaningful fulfillment from others. Recently, I have spent more time working with PG&E, a local utility company, than any other company as they continue to find ways for engagement in the community.

Many people in the Bay Area have mixed opinions of PG&E especially with recent rate hikes and the large gas pipe explosion of 2010. Regardless of some public perception, PG&E is an example of a great strategy around corporate social responsibility and alignment of their business goals and community needs. According to Porter & Kramer (2006), companies need to set measurable goals and need to consider shared value in their strategy. PG&E has defined their CSR mission in five main areas: education, local environment, community vitality, volunteerism, and playgrounds (Pacific Gas & Electric Company, 2012). The organization has had a established CSR program for many years and was awarded Overall Leader in CSR Practices in 2008 by PR News (Anonymous,2008).  "PG&E's deep commitment to corporate social responsibility is demonstrated in the values we hold as a company and the innovative campaigns we launch to engage our customers and employees in key initiatives," said Steven Kline, vice president of corporate environmental and federal affairs for PG&E (Anonymous, 2008). Kline points out innovated campaigns which is echoed by Porter & Kramer (2006), as a positive aspect for business operations.

PG&E has defined their CSR mission and have set measurable goals that increase every year, a best practice for organizations (Porter & Kramer, 2006). PG&E parallels their business functions and needs (providing energy, need for decreasing energy use, creation of sustainable energy sources) in their CSR plans for the community. “Since its inception in 2007, the PG&E Solar Habitat program has assisted in the construction of 416 solar-powered Habitat homes” (Habitat for humanity, 2012).  The relationship with Habitat for Humanity is a two-prong approach. PG&E provides solar panels for every Habitat home making a more sustainable community while significantly impacting low income families with decreased energy bills.  PG&E hopes to increase their goodwill within the community and with local officials while creating another source of energy that may feed the grid, depending on energy consumption. Last week, the partnership between PG&E and Habitat East Bay/Silicon Valley and the City of Oakland was shared in over 30 publications, including the New York Times, and generated a great amount of exposure to PG&E customers. In addition PG&E is also address a growing demand from employees asking to participate in volunteer activities (Franklin, 2008).

Anonymous. (2008, March 20). Pacific gas and electric company named overall leader in corporate social responsibility practices: Utility wins a total of four csr awards from pr news. PR Newswire. Retrieved from http://libproxy.usc.edu/login?url=http://search.proquest.com.libproxy.usc.edu/?url=http://search.proquest.com.libproxy.usc.edu/docview/448697287?accountid=14749

Habitat for humanity and pg&e join forces to brighten lives of families with solar-powered homes. (2012, October 17). The New York Times. Retrieved from http://markets.on.nytimes.com/research/stocks/news/press_release.asp?docTag=201210171700PR_NEWS_USPRX____SF95307&feedID=600&press_symbol=226189

Franklin, D. (2008) Just Good Business: A Special Report on Corporate Social Responsibility, The Economist, January 19, pp.1-14

Pacific Gas & Electric Company. (2012). Pg&e's community investment program. Retrieved from http://pge.com/about/community/contributions/

Porter , M., & Kramer, M. (2006). Strategy & society: The link between competitive advantage and

             corporate social responsibility. Harvard Business Review, 1-13.

Week 7 - Application Assignment -LeiLani Lemle-Macias

There are many companies that practice social responsibility and there are those that are criticized for the lack thereof. Wikipedia defines corporate social responsibility as "a form of corporate self regulation integrated into a business model. CSR is a process with the aim to embrace responsibility for the company’s actions and encourage a positive impact through it activities on the environment , consumers, employees, communities, stakeholders, and all other members of the public sphere who may be considered."

Is it corporate social responsibility when it is done for self interest? Social responsibility for companies use to mean acts of philanthropy. Now it has become mainstream and its what can social responsibility do for me (the companies) rather than what they can do to evoke change on the environment/society. There are still companies that really have social responsibility at the core and it permeates everything they do (Liodice, 2010). Burt Bees has always been for well being and the "greater good" and has helped develop the Natural Standard for Personal Care Products. Method was able to make safe and effective personal cleaning products from natural ingredients. Starbucks main focus is on its sustainable production of green coffee. Kenneth Coles supports AIDS awareness through fashion and promotes awareness of other social issues. Whole Foods supports sustainable agriculture and also promotes reduction of waste and nonrenewable resources. Whole Foods also created Whole Planet Foundation which fights poverty, in addition they created the Local Producer Loan program that gives low interest loans to small local producers to help grow their business. Lastly, Tom Shoes for every pair of Toms purchased a pair is donated to a child in need.

CSR is looked at by various companies as an investment, a policy and are looking to embed CSR in the business. "Strategic CSR unlocks shared value by investing in social aspects of context that strengthen company competitiveness" (Porter & Kramer, 2006). These companies are "giving" back to society they are picking a "social issue" that they can be closely tied to which offers them a greater opportunity to leverage the firm’s resources and benefit the society.

CSRs have been driven by philanthropy, now CSRs address a variety of issues relating to operations such as governance and ethics, worker hiring, opportunity and training, purchasing and supply chains policies, and energy and environmental impact (As You Sow). There have been companies who have been criticized for their lack of social responsibility. Walmart for the treatment of their employees. Nike for abusive labor practices at some of the Indonesian suppliers. Shell Oil for their decision to sink an obsolete oil rig. The new model in social responsibility for various companies is "helping others to help yourself." SO I pose the question again is it corporate social responsibility when it is done for self interest?

Porter & Kramer (2006). Strategy and Society. Harvard Business Review.

Liodice, B. (April 2010). 10 Companies With Social Responsibility at the Core. Retrieved from http://adage.com/article/cmo-strategy/10-companies-social-responsibility-core/143323/

As You Sow (n/a). Retrieved from http://www.asyousow.org/csr/

Week 07 Application Assignment- Jason Wilson

I found the topics for this week’s readings particularly engaging, especially from the perspective of branding. Corporate Social Responsibility is a fascinating subject, because there can be very strong opposing forces at work (Franklin, 2008). A business is in business to make a profit, and it owes a duty to its shareholders to maximize those profits. However, there is also a social contract that exists between the customer (and society as a whole) and the business, which states that the business ought to act, fairly, responsibly, and ethically (Franklin, 2008). Ideally, a business would have these forces in alignment, but it is sometimes impossible due largely to the inherent nature of the particular business itself. 

The interesting thing to note is that brand appeal does not necessarily accompany companies that have strong Corporate Social Responsibility (Porter & Kramer, 2006). A few examples of this spectrum are Apple, Exxon, and Warby Parker. Continuing from my last post, Apple has had several clashes when it comes to Corporate Social Responsibility. It has been excoriated several times for its labor issues in China and has dealt with privacy issues with regards to the iPhone (Clendaniel, 2011). Until recently, and in comparison with other profitable companies of its size, Apple has made very few charitable contributions (Clendaniel, 2011). Yet Apple still remains one of the most powerful brands in the world.

Conversely, Exxon gave close to $200 million in charitable donations in 2010, and is known as one of  “Americas Top Ten most Charitable Companies” (Emerson, 2011). However, Exxon’s public perception and brand power is nowhere near Apple’s brand power. I contend that this has more to do with the negative image of the oil industry as a whole then it does with Exxon in particular (although the remaining negative impact of the Exxon Valdez oil spill cannot be discounted).

Elsewhere on this spectrum is the company Warby Parker. For those unfamiliar, Warby Parker has disrupted the eyewear industry by offering inexpensive prescription glasses over the Internet. Other than the unique style and price, the significant value proposition for Warby Parker is the donation of a pair of glasses for every pair sold. This is comparable to the buy-one, give-one model that was made popular by Tom’s Shoes (Needleman, 2011).

The brand power of Warby Parker is significant because Corporate Social Responsibility is woven into the fabric of the company. It uses this mission statement as a core value that guides the business (Marquis & Villa, 2012). It is also a way to separate itself from the competition. I suspect that even if other eyewear companies began offering eyewear to charity, it would not have the same impact as Warby Parker, because it is not as engrained into their brand.

For a company to achieve the full benefit of Corporate Social Responsibility, those actions must align with the purpose of the business (Franklin, 2008). The purpose of Apple is to make innovative products. These products already enrich the social good, and their social contract is fulfilled. The purpose of Exxon is to produce and sell oil. Although this is extremely necessary to the function of our society, it is commonly seen with negative externalities.  Although it is important for Exxon to give charitably to improve the goodwill of the people, the net effect is not as significant because the whole of the oil industry is perceived negatively. The purpose of Warby Parker is to make and sell eyewear. This purpose is enriched and magnified by the charitable offering, and brand power is increased.

References

Clendaniel, M. (2011, September). Apple: Making Tons of Money, Still Not Giving It Away Or Paying Chinese Workers | Co.Exist: World changing ideas and innovation. Co.Exist: World changing ideas and innovation. Retrieved October 28, 2012, from http://www.fastcoexist.com/1677925/apple-making-tons-of-money-still-not-giving-it-away-or-paying-chinese-workers

Emerson, G. (2011, December 2). The 10 Most Charitable Companies in America - Yahoo! Finance. Yahoo! Finance - Business Finance, Stock Market, Quotes, News. Retrieved October 27, 2012, from http://finance.yahoo.com/news/the-10-most-charitable-companies-in-america.html

Emerson, R. (2012, February 3). Apple's Donations To Charity Surpassed $50 Million: REPORT. Breaking News and Opinion on The Huffington Post. Retrieved October 27, 2012, from http://www.huffingtonpost.com/2012/02/03/apple-charity-donation_n_1253185.html
Franklin, D. (2008) Just Good Business: A Special Report on Corporate Social Responsibility, The Economist, January 19, pp.1-14 (full article)

Marquis, Christopher, and Laura Velez Villa. Warby Parker: Vision of a "Good" Fashion Brand. Harvard Business School Case 413-051, July 2012.

Needleman, S. (n.d.). In Toms' Shoes: Startups Copy 'One-for-One' Model Business on Main. Business on Main | A community for small-business leaders. Retrieved from http://businessonmain.msn.com/browseresources/articles/print.aspx?cp-documentid=25920816#fbid=LAJWfzwZDgY

Porter & Kramer (2006). Strategy and Society. Harvard Business Review.

CMT 500 Week 7 Application--Tihanna McCleese

For this week’s application I decided to interview Tanya Monique Boyce, Owner/Operator of Affirm.  The company is a planning and land use-consulting firm organized in the form of an LLC.  It’s a relatively new company but because its strategy is built around environmental business I thought it’d be interesting to see just how corporate social responsibility is factored into the fabric of their operations. 

My conversation with Ms. Boyce was refreshing.  It’s inspiring to meet business owners who are not only onboard with the principle of CSR but actually focused on incorporating it even with no financial reward.  She seems to be very much focused and in tune with how CSR fits into her company’s strategy, unlike many companies (Franklin 2008). 

However, Ms. Boyce is also keenly aware of the importance of maintaining healthy relationships with Affirm investors and admits to there being a daily struggle in pushing her CSR mission with the blessing of stakeholders (Allen 2002).  Here is a transcript of our conversation:

Me:   First, lets start with your stance or take on CSR.  As the owner of your own business, is this a theme you try to incorporate into your small business or do you think it’s solely the responsibility of large corporations?

Tanya:  Yes, csr goes back to the biblical principle of stewardship.  We all are obligated and responsible for being good stewards of everything that we are given dominion over including the Earth, our finances, all these things are tied together.

Me:  It’s also a way for your business to make money right?

Tanya:  Well, obviously there is the ability to market your CSR and lots of people are doing that these days.  It’s become fashionable to be in support of ‘this’ or against ‘that’.  So yes, especially in the business that I’m in, real estate and housing, there is a big push to ‘green wash’ projects.  ‘Green’   is the catch word and everyone wants to be ‘green’ and so a lot of people try to do one or two little things and sell a project as ‘green’ that isn’t truly ‘green’.

Me:  That seems messed up.

Tanya:  It goes back to true CSR versus trying to use the veneer or visage of social responsibility to enhance one’s bottom line.  And true social responsibility recognizes that your bottom line is multi-faceted it isn’t just a financial bottom line because your bottom line should also be based on your footprint in the world as well as the dividends in your pocket.  Hopefully, those things will go hand-in-hand with a business owner’s personal happiness and definition of success.

Me:  Since your company is so new, have you thought about ways to use CSR to meet that definition of success while also boosting profits?

Tanya:  For me, like I said, providing high quality housing that really allows people to live with a lower environmental footprint is of utmost importance when it comes to things like appropriately cited housing, appropriate windows, appropriate insulation is one of the things I try to do even if it adds to the cost of the project and sometimes it eats into the financial bottom line, to me its more important because housing has a huge impact on the environment.  To the extent that the buildings I’m involved in we also must recycle.  For example, when I take out the chimney, I re-use those bricks.  I’m not throwing them in the dumpster and filling up a landfill.  I’m finding a way to re-use those things.  I’m reclaiming wood and using them in another part of the project when sometimes it’s easier and cheaper to throw it away in a dumpster and bring in some new wood.  But for me, it’s more important that we have a smaller footprint in the project even if these are services we can’t necessarily sell or explain to clients purchasing the home or building but I know it.  I know that this house has a smaller footprint that it could’ve had and to me that’s important.

Me:  So is this type of CSR something you try to incorporate into all of your projects?

Tanya:  Yes.  It’s part of corporate strategy because its part of my personal ethic and that’s something, as a small business owner, I’m able to have more control over unlike large corporations. 

Me:  What about your stakeholders or shareholders?  I know you have several key investors who fund a large part of your business.  Does their input impact how you are able to utilize CSR?

Tanya:  Definitely.  Their contribution is mostly financial.  Obviously, we have to make money so I have to explain to them why we are making a certain amount of money instead of say a higher profit if I would’ve not implemented some of the more environmentally-friendly strategies I lean toward.  Sometimes that’s hard.  Honestly it’s often a conversation, I don’t want to have.  I try to fold it in and not necessarily let the stakeholders or shareholders know that it’s happening unless it’s something that enhances the bottom line.  There are discussions about getting ‘green-certified’ or ‘LEED’ certified because it is marketable and we definitely try to highlight that.  My investors are invested for the purposes of making money.

Me:  How do you handle situations where your investors are against CSR related activities?

Tanya:  There is a push and shove and there is a give.  There are places where we compromise and I’m sure that other corporations make that determination on different levels about how much you can do versus how much you can eat into your bottom line. 

References

Franklin, D. (2008, January 19). Just good business: a special report on corporate social responsibility. The Economist. Retrieved from http://usc.edu

Porter, M.E. & Kramer, M.R. (2006, December). Strategy and society: the link between competitive advantage and corporate social responsibility. Harvard Business Review. Retrieved from http://www.usc.edu

Allen, C. (2002) Building Mountains in a Flat Landscape: Investor Relations in the post-Enron Era, Corporate Communications: An International Journal, Volume 7 (2)

Nicole Palacios: Week 7 Application Assignment

Although not on as major of an impact to investors’ financial well-being as the Enron scandal, when the Kardashian sisters released a prepaid Mastercard debit card in 2010 there was some controversy that resulted in angry fans and financial experts bashing the famous siblings. And as the Enron outrage proved, one should be leery when all the details aren’t in plain sight, or something is too good to be true (money.cnn.com).

As discussed by Porter and Kramer in “Strategy & Society,” corporate and social responsibility has heightened over the years. “Activist organizations of all kinds, both on the right and the left, have grown much more aggressive and effective in bringing public pressure to bear on corporations” (pg. 2). They also explain the four prevailing justifications for CSR: moral obligation, sustainability, license to operate, and reputation.

In the situation that arose with the Kardashian’s prepaid Mastercard (in partnership with Mobile Resource Card), the debit card was “gouging users with fees” and in some instances even before the user actually used the card. Here are the highlights of the card agreement for the Kardashian card:

• Fee for annual cardholder: $99.95
• Fee for initial purchase: One-time charge of $9.95
• Fees per month: $7.95
• Fee per ATM withdrawal: $1.50
• Fee for adding cash to card: $1.00
• Fee to close account: $6.00
• Fee to speak with customer service: $1.50
• Fee for automatic bill pay: $2.00 per transaction

It was marketed as a great tool to teach young adults about financial responsibility. Most financial analysts argued that it did quite the opposite, especially for such an impressionable target audience. As cbsnews.com put it, these teens may want to “Keep Up” with the Kardashians and cause themselves an unnecessary hardship. Here is what the Kardashian’s PR spokeswoman said about the product: "There are no other better people [Kardashian sisters] to represent this card because of their significant fan base, especially to reach the younger audience," says Eve Sarkisyan.

Sarkisyan goes on to say that the new card can "teach younger adults how to better manage their money." But most people disagreed. A CNN reporter stated, “They're not likely to see the card as an educational tool, but rather as something to flash around and swipe, swipe - in the spirit of 'Keeping Up' with the Kardashians.”

I would argue that the Kardashians had a moral responsibility to their fans, particularly the teenagers that it affected in this case. The three sisters present themselves to be “normal” girls that can relate to their fans, and in marketing themselves as such, then they should not have entered an agreement that could have been detrimental to a segment of their fan base. So how can Mobile Resource Card and the Kardashians get this kind of legalized robbery approved by financial regulators? The recent rules brought into effect by the CARD Act (Credit Card Accountability Responsibility and Disclosure Act of 2009) only apply to secured credit cards. Prepaid cards are still unregulated.

The Kardashian’s reputation was also at stake, which in turn played a significant role in the outcome. I believe the disapproval of their debit card urged the TV reality stars to withdraw from the venture. They eventually distanced themselves from the failed product before later breaking their contractual obligations. Was this a matter of being sorry it ever happened or sorry they got caught? “Most of the rhetoric on CSR may be about doing the right thing and trumping competitors, but of the reality is plain risk management. It involves limiting the damage to the brand and the bottom line can be inflicted by bad press and consumer boycotts, as well as dealing with the threat of legal action” (Franklin, p. 6).

This prepaid card venture could have ended disastrous. Fans of the Kardashian's could have felt cheated and betrayed. Parents could have been horrified that these figures would encourage their young adults to enter an agreement with such bad financial benefits (albeit parents would have also been an account holder with their teen). Activists groups could have jumped on board and led the discussion in an array of slanderous ways. All in all, it ended up being okay for these sisters. Their fans appear to be very forgiving of their behavior, as do the parents of this fan base. From scandalous sex videos to short-lived marriages, the Kardashians remain a popular press hot topic.

References

Franklin, D. (2008) Just Good Business: A Special Report on Corporate Social Responsibility, The Economist, January 19, pp.1-14.

McLean, B., (2006, January 19). Is Enron Overpriced? Retrieved July 22, 2011, from             http://money.cnn.com/2006/01/13/news/companies/enronoriginal_fortune/index.htm

Porter & Kramer (2006). Strategy and Society. Harvard Business Review.

Reeves, J. (2010, November 23). Kardashians Gouging Teens with Prepaid Credit Card. Retrieved from http://investorplace.com/2010/11/kardashians-prepaid-mastercard-credit-card-fees/

Torabi, F. (2010, November 10). Kardashian Prepaid Debit Card? Don’t Bother to ‘Keep Up’.     Retrieved from money.cnn.com/2006/01/13/news/companies/enronoriginal_fortune/index.htm

Week 7 App. Assign. M. Douponce

Application Assignment

As I read the article reprinted from March, 2001 “Is Enron Overpriced?” I recalled the past glorification of Enron in the business media, not anything specific but that I perceived it at the time as a big stock value and an innovative business before its bankruptcy in December of 2001.  Now as I read Mclean’s article I can see why I had that impression without any actual knowledge of Enron’s core businesses; metaphors. The number and the power of the metaphors in the article immediately reminded me of the reading from “Images of an Organization” (Morgan, 1998) which discusses the power, bias and paradoxical nature of metaphors in an organization.  By viewing Enron in the context financial ecosystem as an organizational form, it is clear how necessary and distorting metaphors can be in the various communication arteries of this space.

McLean describes Wall Street’s view of Enron as the “IT Girl” and “the Goldman Sachs of energy trading” (meaning it resembles a highly competitive and successful Wall Street firm) due to adoration by financial analysts, its high returns on share price and increased revenues. The irony of these metaphors in hindsight is that those metaphors at the time had little basis in the truth about Enron’s businesses due to the fact that Enron was extremely tight lipped about their operations.  No one, including those touting the metaphors knew how Enron made money. This is a model example of Morgan’s (1998) examination of metaphors in organization; “produces a one-sided insight,” “creates distortions” and “creates blindspots.” The metaphors served as a rationalization for phenomena that was happening to Enron that no one in the financial world could explain but should have been able to explain and in fact was their duty and function to understand on behalf of their clients and investors. As long as the stock was rising, the positive metaphors became the rationale for the performance of Enron instead of accurate and transparent financial fundamentals from Enron. The financial organizational ecosystem was benefitting from the metaphor so it was easier to accept the distortion the metaphor(s)created.

The irony is due to the positive metaphors, Enron’s profile went higher as did the expectations and the scrutiny.

A skeptical analyst in the article references “Enron is a big black box” due to Enron’s lack accounting and business disclosure. The black box metaphor refers to a machine that has an input and then an output but the inner workings are unknown.  Enron in the article disagrees with the “black box” metaphor as well as the positive metaphor of being similar to Goldman Sachs. (maybe Enron thought it was negative because GS is known to be a hardcore WS firm). Enron states there’s no mystery how they make money (Enron claimed they deliver energy) and they are unlike Goldman Sachs because they ‘re not affected by the swings in their market. Enron deflects by using another metaphor and dismisses the critics as having “…  sour grapes” and claiming the reason they can’t be transparent is because they’re competitive edge is similar to “Coca-Cola’s secret formula.” (Interesting they picked an exemplar in branding in the soda business.) (Morgan, 1988 p.6) An analyst and Enron believer states “Enron is no black box… that’s like calling Michael Jordan a black box just because you don’t know what he’s going to score every quarter.” A skeptic, Enron and an advocate for Enron all used the “black box” to establish their position in the organizational form of Wall Street (and thereby shaping it) and yet none used any concrete financial evidence to establish their positions. It is the inexactitude that metaphors provide to create distortions within an organizational form that Morgan discusses as a way to shape organizational life.

The complexity of the financial world as an organizational form and the variety of communication within that form is what gives rise to the use of metaphors especially when the message travels from the CFO who is financially literate to read complex statements, to the analysts on the earnings call, to the WSJ reporter, to the USATODAY financial reporter to the consumer who tosses the annual report in the trash and just reads their balance statement. It would be interesting to use Morgan’concepts to study the transmission of financial communication within an organization and measure the use and correlation of metaphors as it travels across an input continuum.

References

McLean, B. (2001). Is Enron Overpriced? Fortune, CNNMONEY.Com

Morgan, G. (1998). Images of Organization, Berrett-Koehler Publishers, Inc. San Francisco, CA

Week 7 Application Assignment - Sheila de Vera

In a letter by Starbucks’ CEO, Howard Schultz in the company’s 2011 Global Responsibility Report wrote: “Since Starbucks earliest days, I have believed in a strong link between our company’s performance, our values, and the impact we have on the communities where we do business. This interdependence is at the heart of our mission: to inspire and nurture the human spirit – one person, one cup and one neighborhood at a time” (Starbucks, 2011).

In the Strategy and Society article, it states that interdependence is what companies should be focusing their corporate social responsibility (CSR) programs rather “the tension between business and society” (Porter & Kramer, 2006).  In Schultz’s letter, he also said, “Such interdependence is also right for our business, especially in the times we now live” (Starbucks, 2011).

This interdependency has allowed Starbucks to identify three key areas to focus its global responsibility efforts: ethical sourcing (buying), environmental stewardship and community involvement.  In its annual report, Starbucks states that these are the areas where they can “have the greatest impact and therefore are of the greatest importance to Starbucks, our customers and partners (employees), as well as non-governmental organizations and investors” (Starbucks, 2011).

The Strategy and Society article also introduces a framework where the social issues affecting a company fall into three categories: generic social issues, value chain social impacts, and social dimensions of competitive context.  Starbucks three key areas fall under two of these categories: value chain social impacts and social dimensions of competitive context.

Starbucks focus on ethical sourcing (buying) includes responsible purchasing practices, farmer loans and forest conversation programs.  The manner in which Starbucks approaches the way they buy coffee helps to “foster a better future for farmers” and “create a long-term supply” of coffee bean. This fits under the value chain social impact category – where social issues are “significantly affected by a company’s activities in the ordinary course of business” (Porter & Kramer, 2006).

Starbucks environmental stewardship includes initiatives to create green building solution, conserve energy and water, and to make recycling a priority.  This also fits under the value chain social impact category.  According to the company’s annual report, they “believe they are having a significant impact on the entire foodservice industry (Starbucks, 2011).

Starbucks community involvement includes community service projects and investing in young people through its Youth Action Grants.  The company states that they are “committed to helping communities thrive in the neighborhoods, cities and countries where we operate” and are “using their scale for positive change” (Starbucks, 2011). This is in line with the social dimensions of competitive context where “social issues in the external environment that significantly affect the underlying drivers of a company’s competitiveness in the locations where it operates” (Porter & Kramer, 2006).

Starbucks emphasis on interdependency and the company’s three main areas of global responsibility are helping them to be a positive influence in the communities they serve and helping them to “share the good we do so that Starbucks and everyone we touch – can endure and thrive (Starbucks, 2012).

References

Porter & Kramer (2006). Strategy and Society. Harvard Business Review.

Starbucks Global Responsibility Report – Goals and Progress 2011. (2011). Retrieved
          October 27, 2012, from
          http://assets.starbucks.com/assets/19c68ea6c48a473d865c7327c08d817f.pdf

Starbucks website. Retrieved October 27, 2012, from http://www.starbucks.com

Week 7 Application Assignment - Cathy Williams

“We believe that before you think out of the box, you have to fill the box” (Fraser, n.d.)

ThinkLA’s 2011 award for agency of the year in the category of digital media went to a company with one of my favorite industry websites. Fraser Communications makes clear that corporate social responsibility (CSR) plays a strategic role in both organizational structure and as a source of competitive advantage, supporting Porter and Kramer’s assertion that a link exists between doing good and the bottom line (p. 5). The quote above and six others, the company’s “seven beliefs,” illustrate what is quite possibly a daring structural design: potential clients should consider working with Fraser only “if you believe these things too” (n.d.). Fraser offers a compelling example of a commitment to embedding CSR in its operations (Franklin, 2008, p. 13).  

Fraser also presents a likely example of a company that has successfully found a productive CSR approach, thus overcoming two obstacles Porter and Kramer (2008) consider barriers to effective CSR (p. 1). First, its client roster (Mastercard, First 5 California, Southern California Gas Company, among many others) represents a mix of public institutions and major corporations, which suggests not only recognition of an interdependence between society and corporate responsibility, but a proactive effort to build upon it by helping clients promote service messages and encouraging clients to embrace the Fraser philosophy (Fraser, n.d.; Porter & Kramer, 2008, p. 1). Second, by weaving its CSR into an overall corporate strategy, Fraser (n.d.) avoids the generic and executes CSR based on its own unique values and characteristics (Porter & Kramer, 2008, p.1).

As for organizational structure, an interview with an employee isn’t possible this week, but it seems that organizational information processing theory, is part of the Fraser design to structure itself in alignment with CSR. For example, in the drive for clients, Fraser has committed to laying its values out on the table (Fraser, n.d.). Its status as an award winner suggests that the company is effective and engages in practices such that information flows vertically and horizontally (Daft, 2007, p. 91). The company has probably adequately factored in its “slack resources” such as budgeting properly and creating realistic timelines, which are steps in an effective organizational information process (Spaulding, 2012, sl. 3). A quick review of Fraser’s vivid, compelling ad campaigns suggests that employees work within a well-designed structure with appropriate information channels.

If Fraser has CSR built into its organizational structure, it must have done so with the financial implications in mind. Dr. Stephens asked how can financial communication and CSR co-exist, and I have a personal example that I think addresses this question.  A few years ago, I was running a communications department at local media organization. We had an opening for an entry-level communications associate, and the competition was fierce. I personally interviewed the top five candidates, each of whom was selected from more than 150 resumes submitted for the position. The person hired was terrific – talented, hardworking, and all the qualities of an up-and-coming pro! Our organization had just gone through a couple of rounds of budget cuts. The associate position was stripped of its benefits as part the savings plan. Yes, I fought hard to stop that travesty, but I didn’t win that one. During the interview process, I was straight up about the situation, and the candidate was honest as well, saying that the job offer was accepted but that long-term commitment would first have to include benefits. After three months on the job, this amazing individual left the org for Fraser Communications!  We are still in touch, and every so often just laugh at the short-sidedness of our former employer.

There are numerous reasons why it makes sense for companies to embrace CSR in their DNA, but not all are up to the challenge nor do all have the budget. That said, management should really consider alternative options to drastic measures. The organization with the short-sided budgeting decision, which needed to be communicated to the applicant, eventually made other, more drastic “strategic” moves that called its very status into question. Fraser went on to win agency of the year!  Franklin (2008) astutely suggests, “a company’s CSR policy may be a useful pointer to the quality of its management more generally” (p. 14). I wholeheartedly agree.

References

Daft, R. (2007). Fundamentals of organization structure. Organization Theory and

Design (9^th ed). Retrieved from http://www.usc.edu

Franklin, D. (2008, January 19). Just good business: a special report on corporate

social responsibility. The Economist. Retrieved from http://usc.edu

Fraser Communications. (n.d.). Beliefs: seven beliefs of a uniquely successful

advertising agency. Retrieved from

http://www.frasercommunications.com/#/beliefs

Porter, M.E. & Kramer, M.R. (2006, December). Strategy and society: the link

between competitive advantage and corporate social responsibility. Harvard

Business Review. Retrieved from http://www.usc.edu

Spaulding, E. (2012). Organizational information theory: midterm theory (Report

for CMGT 500, Fall 2012). Retrieved from http://voicethread.com/#q.b3561747.i18626781