Supplier’s Strategy of Corporate Responsibility (CR)

Peter Zhou

Agenda

•The Evolution of Global CR

•Developing a CR Strategy

•CR Strategies Case Study

•The Point of View of 3rd Party

The Evolution of Global CR

Business Objectives and CR“Th

e business of business is business” A

company’s role is to make money“In

a free society...there is one and only one social responsibility of business - to use its resources and engage in activities designed to increase its profits so long as it stays within the rules of the game.” - Milton Friedman 1970

A Company’s role:

•Make money for the owners at cost of community and stakeholders?

•Make money for the society and bring benefits to community and stakeholders?

•CSR is about corporate actions beyond compliance, undertaken on the basis of a business case.

•From peripheral activity to business imperative.

•From ad-hoc contributions to strategic approach to building community partnership.

•CSR is a set of mechanisms for aligning corporate behavior and objectives with the wider interests of society.

•CR as an integral part of long term business strategy.

Business Objectives and CR

The Evolution of Global CR

Being world classRole modelOffensive CSRStage 3

Helping out where governments fail

Activist local citizen

Development agent

Stage 4

Joining others in moving urgent global solving along

Global citizenGlobal problem-solver

Stage 5

Reputation protectionGood corporate citizen

Defensive CSRStage 2

PhilanthropyPatronCharityStage 1

MotivationRoleCategoryStage

Being world classRole modelOffensive CSRStage 3

Helping out where governments fail

Activist local citizen

Development agent

Stage 4

Joining others in moving urgent global solving along

Global citizenGlobal problem-solver

Stage 5

Reputation protectionGood corporate citizen

Defensive CSRStage 2

PhilanthropyPatronCharityStage 1

MotivationRoleCategoryStage

Enterprise Management Trend

Consumer Needs Propel the Development of Enterprise

Management Production Mgmt

EHS

Environment Mgmt

Quality Mgmt

1960-

1980-

1990-

2000-

Capacity

Quality

Environ-ment

Safety

Social Responsibility MgmtSociety

Developing a CR Strategy

Steps to Develop CR Strategy

•Analyze the market and the industry

•Risk Assessment

•SWOT analysis

•Value Chain Analysis

•Adjust CR strategy and programs to be operational, systemized, review and assessment

•Redesign organization and responsibility

Major Corporate Stakeholders

Analyze Market & Environment

CRStrategy

Business Value Chain

Raw Material

Stak

ehol

ders

Stockholders

Clients

Customers

Employees

LocalCommunity Process Distributi

on

Marketing & Sales

Environment

Employment

Education

Poverty

・・・

Social Issues

Whom WhatWhy

How

Service

Risk Assessment

Focus areas:•Working and living conditions

•Labour and environmental practices

•Health and safety

•Environmental impact

•Local laws and regulations

•Stakeholders concerns

Business

Goals

Risk

Assessment

Mitigation/

CR activities

Licence to

operate

Do no harm

Do good

Manage indirect effects

SWOT Analysis

Value Chain Analysis

Primary Activities

Technological DevelopmentTechnological Development

Human Resource ManagementHuman Resource Management

Firm InfrastructureFirm Infrastructure

ProcurementProcurement

Inb

ou

nd

In

bo

un

d

Lo

gis

tics

Lo

gis

tics

Op

era

tio

ns

Op

era

tio

ns

Ou

tbo

un

dO

utb

ou

nd

Lo

gis

tics

Lo

gis

tics

Ma

rket

ing

M

ark

etin

g

& S

ale

s&

Sa

les

Ser

vic

eS

erv

ice

Identifying Resources and Capabilities That Can Add Value

Value Chain Analysis

DDelivery

QQuality

PPrice

Five criteria of customer demand

RCorporateResponsibility

RCorporateResponsibility

Customer Demand

PProduct

Strategy: Solving Business Issues by CR

Suffered by the price competition recently

Pay attention to CR and change the existing area of

competition

Can not lower in costany more

Pay attention to CR and it is possible to lower in cost

Need to find new markets but have no clue

Pay attention to CR and find new marketing opportunities

→Make use of outer resources from the CR perspective

→ Increase the additional value from the CR perspective

→Discover marketing opportunities from the CR perspective

Discover Market Opportunities

Existing CustomerSegment

Existing Customer NeedsSocial Customer Needs

Social Customer Segment

ExistingMarket

New market opportunities

Staying One Step Ahead

Staying one step ahead than:

•Government’s requirement to obtain biz license;

•Customer’s requirements to obtain biz orders;

•Competitor to win industry leadership;

•Employee’s requirements to retain human resources;

•Community’s requirement to be an admired citizen

•Innovative/positive/proactive/preventive/partnership approaches

Improvement Opportunities

•Awareness and understanding

•Lean Production system/productivity

•Labor relations/communications

•Energy efficiency/saving

•Purchasing/shipping planning

•Hiring planning

•Employee retention

•Worker welfare

•Environmental, Health and safety

•Management systems

Environmental Programs

•Provide energy efficient products (Energy Star).

•Minimize product packaging material.

•Maximize eco-friendly packaging materials.

•Utilize eco-friendly product materials.

•Minimize Product Transportation requirement.

•Adopt environment friendly manufacturing and packing processes.

•Support Product Recycling Efforts.

HKWHC, a NGO from HK–

Experience Sharing Session (April,2008)

HKWHC, a NGO from HK–

Experience Sharing Session (April,2008)

Thank You!

Tea Break

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