Monday, November 25, 2013
Wednesday, August 10, 2011
Drivers for Responsible Management
Corporate social responsibility (CSR) is as a multi-stakeholder approach in which corporations take responsibility for the impact that their operations may cause to the environment, customers and employees. Today’s climate is demanding that businesses have obligations to the greater community in which they operate, as opposed to simply their shareholders. The most traditional justification for CSR is the business case justification, which includes pressure from NGOs, lenders, investors, insurers, as well employees.
The business case justification for CSR posits responsible management as the “enlightened self-interest” of the corporation. More specifically, this notion suggests in order to achieve sustainable profits and long-term success corporation must act responsibly. One of the most prominent examples of the “enlightened self-interest” is the concept of “Fordism”. Henry Ford was very progressive in labor rights area, he paid his employees significantly higher than other blue-collar jobs, and he was also one of the few major corporations that provided jobs for African Americans. Although Ford increased the living conditions of his employees, his motives were not completely altruistic; he had a business justification for doing so. Ford realized that paying workers higher living wages, allows them to purchase the products they make, thus increasing demand and size of the market. This is perfect example of how a business motivation to increase profit can be aligned with advancing human rights. There are several other business practices methods in which business can be vehicle to increase human rights.
Community and NGOs
NGOs and the community at large are now publicly demanding that corporations take responsibility for their actions, as well making note of any failure to fulfill those responsibility. As a result of plethora of NGOs located around the globe corporations are being now watched being watched more scrupulously than ever before. The impact of this negative publicity can have grave impact in the court of public opinion and the potential to deteriorate the value of the corporation’s brand. Therefore, corporations are no longer able to hide their offshore sites because people are now able to share videos of inhumane working conditions from anywhere in the world.
Employee Retention
CSR is also supported by the business case in the matters pertaining to recruiting and retaining talented employees. Corporations that are able to operate Another reason corporations have become socially responsible is to attract a talented workforce. People like to work for companies that have similar concerns with social issues as their own: “81% of Americans feel that a company’s commitment to social issues is important when they decide where they want to work”[1]. Corporations also need to act socially responsible because a negative perception by the general public can also have an adverse affect on being able to attract and hire young talent. Recent college graduates seeking employment are now considering the corporation’s CSR practices when choosing a place of employment. Increasingly, people want to work for a firm that shares similar values and ethics to their own personal views[2].
Consumers
Corporations are becoming more socially responsible in part response to the demand of consumers. Companies can create a competitive advantage and capitalize on CSR initiatives by developing innovative environmental friendly products. Companies who are actively supporting their environment have a better perception by the consumer: “86% of consumers have a more positive image of a company they believe is doing something to make the world a better place”[3]. Corporations such as Nike were quick to change some of their working conditions when the conditions some of their employees were subjected to surfaced on local media outlets. Consumers can support reward business that have good CSR practices by purchasing their goods, but conversely consumers can punish those corporations who have social indiscretions by boycotting or other forms of activism. Nike faced protests and boycotts for its unsafe working conditions and now as result of the negative backlash, Nike has made significant strides in its corporate social responsibility efforts.
Investors
Corporations that are socially responsible can also have a benefit from investors and an increasing numbers are considering CSR in their investment decisions. This form of investment is generally referred to as social responsible investment (SRI), which considers the financial projects of an investment, but also consider the social and environmental implication of the investment. Therefore the public perception of the corporation can also influence the amount of monies the corporation receives from their investors. A study completed by Geoffery Heal of Columbia University supported this theory by finding that, “$1 out of every $9 under professional management in America now involves an element of socially responsible investment”[4]. As social responsibility continues to influence the investment decisions of financers, it becomes more imperative for businesses to incorporate these values into practice.
The importance and focus on the CSR phenomenon has grown a lot over the recent years. Corporations are starting to place more time and resources in carrying out CSR. A recent study conducted by Economist Intelligence Unit found that executives are placing more importance on corporate responsibility[5]. As employees, consumers, and the greater community continue to demand that businesses become more responsible citizens, in order for businesses to survive and thrive it is imperative to incorporate CSR into their business practices.
[1] “Why CSR?” http://www.consciouscomm.com 15 February2008
[2] “Just Good Business” The Economist. 386 (2008) 19 January 2008
[3] “Why CSR?” http://www.consciouscomm.com 15 February2008
[4] “Just Good Business” The Economist. 386 (2008) 19 January 2008
[5] “Just Good Business” The Economist. 386 (2008) 19 January 2008
Tuesday, April 26, 2011
CSR and Governance in Revolutionary Egypt: The Way Forward
Events discussed during the talk and subsequent Q&A included the emergency meeting held by the ECRC in February, the role of labor unions, the influence of social media over the past few months, as well as the role that women played in the events leading up to and during the revolution. The discussion which ensued following Dr. Gamal-Eldin's speaking points was very fruitful and brought up some very pertinent issues related to the the private sector companies looking to engage CSR during this new chapter in the country's history.
I thought it was fascinating to hear Dr. Gamal-Eldin speak about all the new initiatives that are taking place within the country during such a period of tumult. It seems quite aggressive to pursue thoughts of incorporating CSR more widely into their companies, but at the same time, the best moment to do so. Egypt is still in a period of interim governing until elections in the fall. Making sure that these issues are key talking points prior to elections may help steer the national conversation in a better direction.
Hopefully, with the work of people like Dr. Gamal-Eldin and the initiatives coming out of the EIOD, more businesses will work to successfully implement CSR into their strategy as a part of the "New Egypt".
Thursday, April 14, 2011
Viable Solutions for Hunger
Two-thirds of the world's undernourished people live in seven countries (Bangladesh, China, the Democratic Republic of the Congo, Ethiopia, India, Indonesia and Pakistan) and over 40% live in China and India alone.
The proportion of undernourished people ( 30% in 2010) remains highest in Sub-Saharan Africa.
What can business students and the private sector do about this reality?
To answer this question lets look at some of the factors impeding progress that could also present commercial opportunities.
1) Food Price Volatility
Food prices reached a 30 year record high in 2008, collapsed the following winter, then rose again - rising 20-30% in this last year, threatening millions.
Moreover, the relative integration of the global economy implies that macroeconomic shocks can propagate to domestic commodity markets more quickly and with more impact than before.
2) Climate Change
An increase in extreme weather events, such as the recent floods in Pakistan and drought in Australia, can encourage hoarding of supply and increase the risks associated with harvest outcomes, particularly for countries with sectors dependent upon rainfall for irrigation, for example.
3) Import Dependence
Some countries, for example Senegal and its rice sector, depend on imports for ~90% of consumption. A given country's reliance on imports to meet domestic food needs increases its vulnerability to exchange rate volatility, foreign monetary policy shifts, and commodity market speculation.
So what are some viable solutions and what are ways to capitalize on opportunities, if any, provided by these factors?
1) With respect to combating hunger in the face of food price volatility and import dependence, one place to start is for businesses to work with governments in countries with the most undernourished populations to encourage increased investment in agriculture, apply western techniques to improve yield ratios, and partner with the public/NGO sector to enhance income generating activities for rural smallholder producers.
2) With respect to climate change clean technology and other innovations in agribusiness, such as solar powered drip irrigation systems, can offer both compelling business models as well as opportunities for impact-oriented investors.
Ultimately, the private sector and students of management should be equipped to collaborate to develop commercially viable solutions to hunger.
Wednesday, March 23, 2011
Would you (solar) cook me lunch?
Last week we discussed a topic - solar cooking - which up to that point I had never heard of.
What is solar cooking? It does not involve solar panels (this is a common misconception), it purely harnesses the heat of the sun to cook various types of food. There are several types of solar cookers out there - heat-trap boxes, curved concentrators (parabolics) and panel cookers.
What stroke me is that there are currently no patents pending on any of these models, so basically anyone outthere can use the internet to find how-to guides on how to build them. Up to recently, a Mexican company was manufacturing solar cookers on a large scale, but it's not producing them anymore. This is a great opportunity for an entrepreneur to step in and to build an affordable , more efficient (currently there's a big tradeoff between price and quality that can be reduced) solar cooker and mass produce it. With the right marketing, this could really prove to be a successful venture.
Solar cooking helps in various ways : reduces the harmful effects of cooking smoke (which affects millions of people, mostly in Africa), it allows people to spend the time foraging for wood in other productive ways, and it helps reduce de-forestation - which is a huge environmental issue which is largely attributed to traditional cooking methods.
This website is a great resource:
http://www.solarcookers.org/index.html
I could go on and discuss a lot more about solar cooking , but spend some time yourself watching some videos on it, and you will be amazed. The potential truly is there for solar cooking. All it needs is better marketing put into place and a courageous entrepreneur to lift it off the ground.
Up on the the roof
First of all, I would like to say how excited I am about this new blog. I think it is a great forum for us to share ideas and I am looking forward to reading everyone’s posts.
For my first post, I wanted to share an experience that I had volunteering for DC Greenworks, a DC-based non-profit that advocates green roof construction. I volunteered with a group of students from GW on a green roof build at American University. It was a fun and fascinating experience, despite the cold weather.
The most interesting thing about the project was the medium that was used as a substitute for soil – a foam substance that I am told had originally been developed for use in airplane wings. The foam was wrapped in a white plastic to reflect light and heat, thus helping to keep the building cool. Since the foam is much lighter than soil, it helps minimize weight load on the roof.
I highly recommend volunteering on similar projects if you have the chance – especially if the weather is nice.