I just read an article in the Harvard Business Review, December 2006, titled Strategy & Society: The Link Between Competitive Advantage and Corporate Social Responsibility, by Michael E. Porter and Mark R. Kramer.
The authors offer a way for businesses to look at Corporate Social Responsibility (CSR) as a source of opportunity, innovation, and competitive advantage; as opposed to a PR scheme, a way to mitigate bad press, or an obligation. The key is to fully integrate CSR into each individual company's unique strategy and identity.
Often, the prevailing method in approaching CSR is a disassociated effort that is ad hoc and responsive. This approach focuses on "the tension between business and society rather than on their interdependence" and usually uses generic methods. According to Porter and Kramer, "Responsive CSR comprises two elements: acting as a good corporate citizen, attuned to the evolving social concerns of stakeholders, and mitigating existing or anticipated adverse effects from business activities." This is all okay, but it is limited. Positive corporate citizenship initiatives may have some interesting social benefits but they remain incidental to the company, doing little to strengthen the core competencies. And along the lines of mitigating damage, "some companies will be more proactive and effective in mitigating the wide array of social problems that the value chain can create. These companies will gain an edge, but--just as for procurement and other operational improvements--any advantage is likely to be temporary."
Porter and Parker suggest that companies adopt a more strategic approach to their CSR initiatives. This involves looking at the company's core competencies, its place within society, its customers, its competitors and then discovering "shared value by investing in social aspects of context that strengthen company competitiveness." This means eschewing the boring, generic approaches to CSR that leave everyone wanting something more and something different. Hopefully, a company can develop a corporate competitive strategy that is inseparable from its social impact. By understanding one's own company from a competitive level and combining that with an understanding of its social impact, the two can come together to create a force that is truly beneficial to all. This is integrated, as any competitive strategy, throughout the whole organization, as opposed to those pithy ad hoc efforts.
I think that Porter and Parker are spot on. The whole thing is that CSR does not need to be a ball and chain. As with anything, if a company looks at it with the right attitude, opportunities come bubbling forth, offering myriad ways for increasing competitiveness, innovation, and ultimately greatness. The thing that I found lacking in this article was an encouragement for dialogue between the sectors. While Porter and Parker talk about the importance of changing the perspective of "us against them" or the social sector pitted against the business sector, there's no real mention of the two (or any other groups not lumped into these convenient titles) having dialogues. Perhaps it's obvious, but then I think that the obvious bears repeating. There's a definite need for cross-sector dialogue.
Cross-sector dialogue will (hopefully) start to alleviate that tension between sectors. Cross-sector dialogue will also give rise to those opportunities for coporations to find where they can make a social impact and the social sector groups can find partners to aid their mission. It spurs on action and innovation and makes the strategies of both sides much more effective.
I wonder if their are other examples of different kinds of "cross-sector" conversations going on.....I'll have to search for that.
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