STRATEGY AND SOCIETY: THE LINK

BETWEEN COMPETITIVE ADVANTAGE

AND CORPORATE STRATEGY

GROUP 3
 The Prevailing Approaches

Successful corporations need a healthy society

Governments, activists and media play important part
CSR has become a inescapable priority for business leaders
Traditional approaches assume that companies and society are in
conflict Thinking of
A zero-sum game Pitting CSR in generic
business ways instead of
against society their firms
strategy

The efforts
This is counterproductive, since the still remain
two are interdependent unsuccessful
Companies fail to recognize the
importance of CSR in their strategies
 Four Pevailing Justifications for CSR

Achieving commercial success in ways that honor ethical values

Moral Absolute; No way to balance social and economic trade-offs
Obligation Varies and contradictory values among managers, regions and
countries

Meeting needs of present without compromising future needs

Sustainability Offer little basis for balancing long term objectives against short
term costs

Building goodwill to secure consent of government and

License to stakeholders
operate Cedes control to external player who arent always aware of
corporate strategy and operations

Enhancing reputation and brand with customers, investors and

Reputation employees
Confuses public relations with social and business results
 Integrating Business with Society

All the four school of thoughts focus on tension between

business and society rather than interdependence
Result:
Uncoordinated CSR and Philanthropic activities disconnected from
companys strategy
Both business decisions and social policies must follow
the principle of shared value
Choices must benefit both the sides
Comanies must integrate a social perspective into the
core framework it already uses for
Competition, and
Business strategy
 Identifying the Points of Intersection

Inside Out Linkages Outside In Linkages

Company impinges upon society External social conditions influence

through its operations in normal corporations for better or worse
course of business Competitive Context

Impacts on society are based on Quantity and Quality of

available business inputs
Rules and incentives that
govern competition
Location Time
Size and sophistication of
local demand
Same manufacturing As social standards
operations will have and science evolves, Local availability of
different social companys impact supporting insudtries
consequences in on society changes
different locations over time
Choosing which social issue to address
 Creating a Corporate Social Agenda

An Affirmative corporate social agenda moves from mitigating harm to

reinforcing corporate strategy through social progress
Responsive CSR
Good Corporate Citizenship
Mitigating adverse effects
from business activities

Strategic CSR
Choosing unique position
Includes both inside-out &
outside-in linkages working
in tandem
 Integrating
Inside-out and Outside-in Practices
Provides 180 hrs of paid
classroom and on the job
training to chronically
unemployed job candidates
Supports local community
service organizations which
identify and recruit candidates
to Marriott
Reduces cost for the company
A substantially higher retention
rates achieved
Works directly with small farmers
in developing countries to source
milk, coffee and cocoa(its global
business)
Provides enormous social benefits
by investing in local infrastructure
and transfer of world-class
technology and knowledge
Gives Nestle direct access to
commodities to maintain profits
Its distinctive strategy is
inseparable from the social impact
 Creating a social dimension to the value
proposition

Value proposition: To sell organic,

Ecomagination initiative
natural and healthy food products
to customers who are passionate Focuses on creating water
about food and environment purification technology and
other green businesses
Social issues are fundamental to the
company
Sources from local farmers
Pioneer new
Commitment to natural and products, packaging
environment friendly operating and distribution
practices extend beyond sourcing systems to meet the
Purchased renewable wind energy needs of the poorest
credits to 100% of its electricity use populations
Only Fortune company to do so
 Organizing for CSR

Strategy is always about making choices, and success in CSR is no

different.
It is about choosing which social issues to focus on
Integrating business and social needs requires
Adjustments in organizations Fragmented,
To Affirmative
Reporting relationships Defensive
Approach
Incentives Approach

Emphasis on To Emphasis on
Image Substance Social impact needs to
be measured
Organization s that make right choices
and build to focused , proactive and integrate d social initiatives in concert
with their core strategies differentiate themselves from the rest
 The Moral Purpose of Business

Different thinking is required in Business

Social responsibility must be perceived as building
shared value rather than damage control or PR
campaign
NGOs, Government and companies should think of
CSR as corporate social integration
We are convinced that CSR is becoming increasingly
important to competitive success
Microsoft Working Connections Partnership
THANK YOU