CSR in practice
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Presentation slides of a 2 day CSR training course on
- background of CSR,
- current trends and approaches
- systematic integration into businesses
- open source driven supporting tools

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CSR in practice Presentation Transcript

  • 1. CSR Training Workshop for Industries Corporate Social Responsibility Training Workshop for Industries – Long term performance improvement through CSR integration – As part of the European Commission supported SME business development project on Empowering Asian Business Intermediaries through Knowledge-based Networking Focused on Sustainability Management (EMPASIA) Müller, Opierzynski CSR Training for Industries, 2009
  • 2. CSR Training Workshop for Industries Learning objectives of the CSR training 1. Understand how organizations strategically manage CSR 2. Reveal how organizations can strategically create their competitive advantage through CSR not only with consumers and investors, but with current and future employees 3. Getting started with open source ICT tools for business management support 4. Starting an ongoing learning process among the participants Corporate Social Responsibility (CSR) – background and business context Systematic integration of CSR – process model and tools Getting started with CSR – Interactive Group Work Introduction of Redmine – Interactive Group Work „using redmine for project implementation“ Müller, Opierzynski CSR Training for Industries, 2009
  • 3. CSR Training Workshop for Industries Background, definitions and drivers Müller, Opierzynski CSR Training for Industries, 2009
  • 4. CSR Training Workshop for Industries Sustainable development Basis for current sustainability discussion: 1987 Report of the United Nations World Commission on Environment and Development “Our Common Future” a.k.a. “Brundtland Report” “Humanity has the ability to make development sustainable - to ensure that it meets the needs of the present without compromising the ability of future generations to meet their needs.” 1992 Rio Declaration on Environment and Development, and the subsequent establishment of the “AGENDA 21” What exactly does “Sustainability” mean and what does it entail for businesses? Source: http://www.worldinbalance.net/pdf/1987-brundtland.pdf Müller, Opierzynski CSR Training for Industries, 2009
  • 5. CSR Training Workshop for Industries Historical background of Sustainability – from forestry to mainstream • Hans Carl von Carlowitz (1645-1714) – Mining Administrator for the Kingdom of Saxony – Silver mining was backbone of economy – Timber valuable but scarce resource for mining • Drafting of one of the first forestry treatise – 1713 Sylvicultura Oeconomica • Two-fold strategy to secure timber supply – Demand-side – promotion of wood saving innovations – Supply-side – promotion of sustainable forestry • Timber should only be taken in relation to the forest’s ability to regenerate – Promotion of long-term viability vs. short-term profit www.zeit.de/1999/48/Der_Erfinder_der_Nachhaltigkeit http://en.wikipedia.org/wiki/Hans_Carl_von_Carlowitz Müller, Opierzynski CSR Training for Industries, 2009
  • 6. CSR Training Workshop for Industries Current views and definitions managing resources and its impact in an Sustainability environmentally friendly, socially responsible and Management economically wise way (‘Triple Bottom Line’ concept – maximization of economic, environmental and social performance) Approach to give a frame for businesses to express their commitment to society. voluntarily integration of social and environmental issues into all business activities Corporate beyond regulations (corporate nomenklatura for Sustainability Management) Social • Internally (from health and safety to responsible use of resources and adaptation to change Responsibility (innovation) •Externally – from social handling of community, stakeholder relations to human rights and global environmental protection European framework, Green Paper on corporate social responsibility Müller, Opierzynski CSR Training for Industries, 2009
  • 7. CSR Training Workshop for Industries Reasons for Sustainability Management – Why? Sustainability strategy "safeguard" - reducing and managing risks Sustainability-induced problems and challenges e.g. climate change, poverty etc. are tackled by the political system, markets or the public Risks could affect the financial, managerial or reputation of corporations Goal - securing the existing markets and the position in the markets Sustainability strategy "credibility" - enhancing credibility and reputation Credibility and reputation is a valuable non-tangible asset (also for situation of crisis) Prevention of conflicts with authorities and stakeholders Attraction of suitable employees and satisfaction of customers Defensive focus (communication with stakeholders) e.g. MNCs or industries like chemicals, pharmaceuticals, military, oil, automotive Offensive focus (sustainable products and services), e.g. food, textile, finance Good corporate citizenship is a sound investment Müller, Opierzynski CSR Training for Industries, 2009
  • 8. CSR Training Workshop for Industries Systematic integration of CSR issues into business operation – Why? Sustainability strategy "efficiency" - enhancing productivity and efficiency Enhancing eco or socio efficiency of business processes Cost reduction through resource efficiency Productivity improvements through work conditions and job satisfaction Sustainability strategy "innovation" - differentiating in the market Creation of sustainable products and services with unique selling point Increase of sales and margins through environmentally and socially friendly product innovations Advantages through Sustainability in production, consumption or disposal phase needs to be strongly communicated e.g. organic food, textiles – healthy; car sharing - easy, green energy – less risky, fair trade Sustainability strategy "transformation" – developing markets and society Transformation / creation of new markets transforming human needs and consumption pattern Requires institutional changes within human needs, politics or institutional framework Proactive lobbying participation in political committees, standard creation etc Müller, Opierzynski CSR Training for Industries, 2009
  • 9. CSR Training Workshop for Industries Social Responsibility – working draft 4.1 ISO 26.000 Responsibility of an organization for the impacts of its decisions and activities (products, services and processes ) on society and the environment, through transparent and ethical behavior that: Takes into account the expectations of stakeholders Is in compliance with applicable law and consistent with international norms of behavior Contributes to sustainable development, health and the welfare of society Is integrated throughout the organization and practiced in its relationships http://iso26000.jsa.or.jp/_files/doc/2008/iso26000_wd4.1.pdf Müller, Opierzynski CSR Training for Industries, 2009
  • 10. CSR Training Workshop for Industries Guideline Social Responsibility – working draft 4.1 ISO 26.000 Müller, Opierzynski CSR Training for Industries, 2009
  • 11. CSR Training Workshop for Industries Reasons and impacts of CSR Address the link between the stakeholders’ interests and the responsibilities of the organization Determine how best to increase the beneficial impacts of the organization’s activities and how to decrease any adverse impacts Fulfill legal obligations (e.g. to shareholders or to employees) and address conflicting interests (between the organization and the stakeholder or between various stakeholders) Reconcile conflicts of interests Improve decision making through better understanding of impact and consequences of actions Contribute to continuous learning by the organization Provide the organization with the benefits associated with obtaining diverse perspectives Help an organization review its performance so it can improve it Increase transparency and the credibility of its communications Provide a basis for cooperative activity such as partnerships Guideline Social Responsibility – working draft 4.1 ISO 26.000 Müller, Opierzynski CSR Training for Industries, 2009
  • 12. CSR Training Workshop for Industries Examples of standards which contribute to CSR Management standards Reporting standards – Environmental Management - GRI - www.globalreporting.org • ISO 14000 Family • EMAS (European Union) Social standards – ISO 26000 forthcoming 2009 – Quality Management – AA1000 (AccountAbility) • ISO 9000 Family – Fair Trade Labeling Organization • EFQM model for Business Excellence – BSCI (Business Social Compliance Initiative) (European Foundation for Quality Management) Industry standards Workplace standards – Textile – SA8000 (Social Accountability International) • ÖkoTex Standard 100Plus – ILO-OSH-2001 (International Labor Organization) • Purewear – OHSAS 18001 (various worldwide Standardization Bodies) • European Eco-Label Müller, Opierzynski CSR Training for Industries, 2009
  • 13. CSR Training Workshop for Industries BSCI Code of Conduct / แนวทางปฏิบัต ิข อง BSCI Aims to attain compliance of MNC and their suppliers with social and environmental standards In accordance with international conventions and laws (ILO Conventions, UN Universal Declaration of Human Rights, UN Conventions on children's rights and the elimination of all forms of discrimination against women, UN Global Compact, OECD Guidelines for Multinational Enterprises) 1. Legal compliance 1. การปฏิบตตามกฏหมาย ัิ 2. Freedom of association 2. เสรีภาพในการรวมตัวและสิทธิในการตอรองรวมกัน 3. Prohibition of discrimination 3. หามมีการเลือกปฏิบัตในทุกรูปแบบ ิ 4. Compensation 4. การจายคาจางตอบแทน 5. Working hours 5. ชัวโมงการทํางาน ่ 6. Workplace health and safety 6. สุขภาพและความปลอดภัยในทีทํางาน ่ 7. Prohibition of child labour 7. การหามการใชแรงงานเด็ก 8. Prohibition of forced labour 8. การหามบังคับใชแรงงานและลงโทษ 9. Environment and safety issues 9. ประเด็นดานสิงแวดลอมและความปลอดภัย ่ 10. Management systems 10. บริษทผูจดการระบบการผลิต ั ั www.bsci-eu.com/ Müller, Opierzynski CSR Training for Industries, 2009
  • 14. CSR Training Workshop for Industries CSR surveys on practice, drivers on benefits Stiftung Warentest, Case Work March 09 (19 organisations) EU project EMIT CSR, Malaysia 07 (ca. 50 organisations) KPMG's International Survey of CSR Reporting 05 (ca. 1.600 organisations) McKinsey, CSR value study 09 (ca. 80 organisations, 150 investment professionals Müller, Opierzynski CSR Training for Industries, 2009
  • 15. CSR Training Workshop for Industries Consumer group CSR evaluation schema by ‘Stiftung Warentest’ societal and scientific opinion-forming processes of responsible corporate behavior national/internat. conventions, standards and guidelines for responsible corporate behavior criteria used within the framework of consumer-oriented company surveys criteria used for socially responsible investment criteria used in environmental, social and sustainability reporting by companies Social Issues / Employees The Environment 1. Guiding principles and corporate policy 1. Guiding principles and corporate policy 2. Management and measures 2. Management 3. Implementation 3. Measures and implementation 4. Reporting 4. Reporting Social Issues / Production and Supplier Consumers and Society 1. Guiding principles and corporate policy 1. Willingness to provide information 2. Management and measures 2. Community involvement 3. Implementation www.test.de 4. Reporting http://en.wikipedia.org/wiki/Stiftung_Warentest Müller, Opierzynski CSR Training for Industries, 2009
  • 16. CSR Training Workshop for Industries ‘Stiftung Warentest’ – Case Work March 09 Organisations by sector (Th, 19) Organisations by employees Manufactur- Autom otive Health and ing social work less than 50 51 - 250 251 - 500 Education other 501 - 1000 more than 1000 Own CSR Cross-functional No organisational Department Collaboration CSR structure Müller, Opierzynski CSR Training for Industries, 2009
  • 17. CSR Training Workshop for Industries Attitude and commitment on social issues Commitment is explicetely expressed Avoid active or passive corruption and bribery in business Com plying with international m inim um social standards (e.g. Code of Conduct) Com pliance with the OHS standards throughout the com pany is explicitly expressed Prom otion of the integration of foreign em ployees / m inorities / different religions Prom otion of equal opportunities for wom en and m en is explicitly expressed Prom otion of training and further education is explicitly expressed Prom otion of health and safety at work is explicitly expressed Internal statem ents on corporate responsibility are accessible Public statem ents concerning responsibilities towards its em ployees Detailed guidelines or principles on responsible treatm ent of the em ployees 0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50% com prehensively largely partially inadequately Müller, Opierzynski CSR Training for Industries, 2009
  • 18. CSR Training Workshop for Industries Social Issues / Employees – measuring results of implementation Measuring employee satisfaction Details of em ployee absenteeism are system atically recorded and analysed Measures for im provem ents are introduced on the basis of these results Em ployees are inform ed of the results by publication Em ployee satisfaction is m easured regularly Em ployee satisfaction is m easured for all em ployees 0% 5% 10% 15% 20% 25% 30% 35% 40% com prehensively largely partially inadequately Number and development of accidents at work in the company Greater share or the number of workplace accidents has decreased Average share or no change Number of workplace accidents has decreased Lower share 0% 10% 20% 30% 40% 50% Müller, Opierzynski CSR Training for Industries, 2009
  • 19. CSR Training Workshop for Industries Supply chain management - social issues Supply chain management - social issues There is a com plaints office for em ployees at the production site Ensuring com pliance of sub-contractors with m inim um social standards Preference is given to certified / audited sub-contractors (e.g. SA8000, BSCI) The com pany offers free advice and training for em ployees at his production sites The com pany offers free advice and training for buyers and sub-contractors Non-com pliance results in the im plem entation of certain m easures and sanctions if applicable Com pliance with social standards is regularly surveyed Com plying with m inim um social standards is a pre-requisite for every signed delivery contract 0% 5% 10% 15% 20% 25% 30% 35% 40% com prehensively largely partially Reporting on such topics No reporting on such topics 0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50% Müller, Opierzynski CSR Training for Industries, 2009
  • 20. CSR Training Workshop for Industries Environmental performance Status of environmental protection Motivation system to im prove environm ental perform ance in production and acquisition Em ployees are actively involved in environm ental protection throughout the com pany Environm ental indicators are defined in order to m onitor achievem ent of targets Measurable environm ental targets have been approved Responsibility for environm ental protection concerns is integrated in product developm ent Responsibility for production process related environm ental protection is allocated A specific organisational unit is responsible for environm ental protection within the com pany Responsibility for environm ental protection is allocated within the m anagem ent 0% 10% 20% 30% 40% 50% 60% com prehensively largely partially Müller, Opierzynski CSR Training for Industries, 2009
  • 21. CSR Training Workshop for Industries Monitoring / publishing of company data on material and energy consumption Environmental performance measurement Other data: transportation kilometres, noise, production accidents, complaints from the neighbourhood Waste: total quantity, composition, hazardous waste Water emissions: waste water quantity and pollution (especially COD, heavy metals) Air emissions: climate relevant pollutants (CO2), nitrogen oxides, sulphur dioxide, airborne dust Water: use in production / manufacture (industrial water), drinking water consumption Energy: consumption data according to energy source, share of regenerative energy Materials: consumption of raw and process materials (absolute quantities) 0% 5% 10% 15% 20% 25% 30% 35% 40% Data is collected from several Data is collected from some Data is collected from a few Data of material and energy areas and published areas and published areas and published consumption is not collected and published Müller, Opierzynski CSR Training for Industries, 2009
  • 22. CSR Training Workshop for Industries Complaint management system to increase customer satisfaction Customer complaints All custom er com plaints are docum ented and system atically evaluated Open custom er inform ation on com plaints Em ployees are given regular training in dealing with custom er com plaints Fulfillm ent of defined standards is regularly m onitored and m easured Defined targets for dealing with com plaints and actively com m unicates them to em ployees W ritten declaration of service and quality standards for custom er com plaints W ritten declaration of responsibility within the organisation for com plaint m anagem ent 0% 5% 10% 15% 20% 25% 30% com prehensively largely partially Müller, Opierzynski CSR Training for Industries, 2009
  • 23. CSR Training Workshop for Industries Consumers and society - community involvement Community support Participation in Local Agenda processes Prom otion of projects, which im prove OHS of the em ployees of sub-contractors or suppliers Sponsoring or support of training/educational establishm ents for the em ployees of sub-contractors Regular tim e off for em ployees for charity work Sponsoring of cultural events and am ateur sports Annual donations in the form of m oney, m aterial goods or services for environm ental, social aim s 0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50% com prehensively largely partially inapplicable Müller, Opierzynski CSR Training for Industries, 2009
  • 24. CSR Training Workshop for Industries Why is your company interested in applying CSR? Company - CSR Driver Community pressure Attraction of new investors or customers Competitive pressure Philanthropy Information demand by stakeholders Differentiation opportunities Legal- or regulatory obligations Environmental concerns relating to products or service Social concerns relating to products or service Improving Business Performance 0% 10% 20% 30% 40% 50% 60% 70% 80% EU project EMIT CSR, Malaysia, 2007 - 2008 Müller, Opierzynski CSR Training for Industries, 2009
  • 25. CSR Training Workshop for Industries Market forces that could drive the need for organizations to address CSR 1. Economic considerations 2. Ethical considerations 3. Innovation and learning 4. Employee motivation 5. Risk management or risk reduction 6. Access to capital or increased shareholder value 7. Reputation or brand 8. Market position or share 9. Strengthened supplier relationships 10. Cost savings KPMG's International Survey of CSR Reporting (2005). This report surveyed more than 1,600 companies worldwide and documented the top ten motivators driving corporations to engage in CSR for competitive reasons. Müller, Opierzynski CSR Training for Industries, 2009
  • 26. CSR Training Workshop for Industries Valuing corporate social responsibility Müller, Opierzynski CSR Training for Industries, 2009
  • 27. CSR Training Workshop for Industries Müller, Opierzynski CSR Training for Industries, 2009
  • 28. CSR Training Workshop for Industries Müller, Opierzynski CSR Training for Industries, 2009
  • 29. CSR Training Workshop for Industries Müller, Opierzynski CSR Training for Industries, 2009
  • 30. CSR Training Workshop for Industries Consequences for action 1. Potential for shareholder value from environmental, social, and governance programs needs to be better understood. 2. Stakeholders needs and demands are the base for meaningful changes. 3. Applying systematic performance evaluation (data gathering, evaluation and corrective action) can drive systematic improvement 4. The integrating of effects and impacts of environmental, social, and governance programs with the rest of the company’s finances / performance assessment is crucial. 5. The role of employees in the value adding process can be enhanced through CSR. 6. Opportunities of environmental, social, and governance programs to create new revenue streams is not sufficiently recognized. Holistic integration of CSR issues in business planning and reporting is the base to tap these opportunities. 7. Communication and corporate culture are keys to CSR. Müller, Opierzynski CSR Training for Industries, 2009
  • 31. CSR Training Workshop for Industries CSR – making profit with a clear conscience! Involves every aspect of an organization, like Governance Environmental sustainability Risk management Workplace issues Cultural norms Local laws and customs …. Müller, Opierzynski CSR Training for Industries, 2009
  • 32. CSR Training Workshop for Industries Further reading Green Paper on Promoting a European framework for Corporate Social Responsibility, European Commission, 2001 ISO 26.000 ‘Guidance on Social Responsibility, ISO/TMB/WG SR N 137, 2008.03.11 Mapping instruments for corporate social responsibility, European Commission, Directorate- General for Employment and Social Affairs, 2003 Valuing corporate social responsibility, McKinsey Global Survey Results, Value and effects of CSR, survey among CFOs, investment professionals and CSR professionals, 2009 Corporate sustainability: What is it and where does it come from?, Mel Wilson, Ivey Business Journal Online, 2003 Sustainability Management in Business Enterprises, Concepts and Instruments for Sustainable Organisation Development, Schaltegger, Herzig, Kleiber, Müller, published by The Federal Ministry for the Environment, Nature conservation and Nuclear Safety (BMU), Division for Environment and Economy, Eco-Audit Müller, Opierzynski CSR Training for Industries, 2009
  • 33. CSR Training Workshop for Industries Further reading, information and networking – www.sustain-asia.org Müller, Opierzynski CSR Training for Industries, 2009
  • 34. CSR Training Workshop for Industries Systematic integration of CSR into business operation Müller, Opierzynski CSR Training for Industries, 2009
  • 35. CSR Training Workshop for Industries Performance Reporting Controlling Assessment Continuous Improvement Müller, Opierzynski CSR Training for Industries, 2009
  • 36. CSR Training Workshop for Industries Strategy Development Internally directed analysis of own company (e.g. SWOT) Formulation of the company’s core company’ Externally directed analysis of reason to be. - Industry - Markets Definition of corporate values Formulation of mid- and long-term mid- long- - Environment plan of action to Definition of corporate culture - fulfill the company’s mission, company’ - while taking account the company’s company’ capabilities (internal analysis) and it’s it’ competitive environment (external analysis) Müller, Opierzynski CSR Training for Industries, 2009
  • 37. CSR Training Workshop for Industries Implementation Planning Using the Balanced Scorecard Financial perspective approach to break down Which financial objectives business strategies (Kaplan & have to be fulfilled to Norton) implement the strategy Customer perspective Internal process p. How the company Vision How do internal processes wants to be seen & have to change to by the customer Strategy implement the strategy People & knowledge p. What employees and the organisation have to learn implement the strategy Müller, Opierzynski CSR Training for Industries, 2009
  • 38. CSR Training Workshop for Industries Company Medium-Term Strategy Increase the company’s profits by international expansion and differentiation through sustainability Financial Perspective Move products up market to increase profit margin for own branded products. Customer Perspective Provide Be recognized (own-branded) as sustainable products tailored to company customers’ needs and tastes Internal Process Perspective Develop and Green Increase Increase introduce right production business flexibility of products to the process transparency production right markets People and Knowledge Perspective Ensure production staff Improve Move to Foster a can perform tasks business knowledge based company culture environmentally communication value creation of sustainability responsibly Müller, Opierzynski CSR Training for Industries, 2009
  • 39. CSR Training Workshop for Industries Financial Perspective Goal Key issues Target Activity Increase profit • Profit margin • +50 percent Align company processes to margin for own- • Production costs • -10 percent sustainability principles to branded products • Selling price • +60 percent differentiate products and • Overhead costs • -5 percent create added value for customers Müller, Opierzynski CSR Training for Industries, 2009
  • 40. CSR Training Workshop for Industries Financial Perspective Customer Perspective Goal KPIs Target Activity Goal Key issues Target Activity Increase profit • Profit margin • +50 percent Align company processes to Be recognized as • Positive media • 6 reports in Use PR instruments to margin for own- • Production costs • -10 percent sustainability principles to a sustainable reports local, 3 in communicate company’s branded products • Selling price • +60 percent differentiate products and company international commitment to sustainability. • Overhead costs • -5 percent create added value for media Develop co-branding/co-selling customers • Consumer survey • +35 percent strategy with sustainable score • +25 percent products. • Marketing budget Provide products • Customer • +50 percent Engage customers to survey tailored to satisfaction needs and identify trends, focus customers’ needs • Loyalty ratio (re- • 50 percent also on buying habits. buy rate) Müller, Opierzynski CSR Training for Industries, 2009
  • 41. CSR Training Workshop for Industries Financial Perspective Customer Perspective Goal KPIs Target Process Target Perspective Activity Goal KPIs Activity Increase profit Goal • Profit margin issues Key • +50 percent Target Align company processes to Activity Be recognized as • Positive media • 6 reports in Use PR instruments to margin for own- • Production costs • -10 percent sustainability principles to a sustainable Green production reports • Recycled materials +6040 3 in local, percent • percent communicate company’s Analyze production process branded products • Selling price • differentiate products and company processes as input international commitment to sustainability.and • Overhead costs • -5 percent create addedholisticfor from a value perspective • Hazardous media • Decrease or customers co-branding/co-selling Develop potential to green the identify • Consumer survey materials • +35 percent to 10 strategy with sustainable substitute production process, e.g. score • +25 percent percent products. substitution, reduction through • Marketing budget • Energy • Use 40 percent and avoidance . consumption from RES Provide products Flexibility of • Customer • Lead-time • +50 percent • -10 percent Engage customers to survey Improve order planning through tailored to production satisfaction • Set-up time • -15 percent needs and identify trends, focus effective customers involvement customers’ needs • Loyalty ratio (re- processes • Time to customer • 50 -20 percent • percent also on buying habits. (design) buy rate) Training of staff, Optimization of internal and external logistic, optimize supplier management Müller, Opierzynski CSR Training for Industries, 2009
  • 42. CSR Training Workshop for Industries Financial Perspective Customer Perspective Goal KPIs Target Process Target Perspective Activity Goal KPIs Activity Increase profit Goal • Profit marginPeople and Knowledge Align company processes to KPIs Target Perspective Activity • +50 percent Be recognized as • Positive media • 6 reports in Use PR instruments to margin for own- • Production costs • -10 percent sustainability principles to Green production reports Key issues local, 3 in Target communicate company’s a sustainableGoal • Recycled materials • 40 percent branded products • Selling price • +60 percent Activity Analyze production process differentiate products and company processes Improve international / month from a holistic perspective and as Training of staff -5 percent • input • 6 hours commitment production related Provide to sustainability. • Overhead costs • create added value for knowledge based • Hazardous media courses / year identify potential to green the • Decrease or customers co-branding/co-selling •2 Develop training, set up of knowledge value creation • Consumer survey materials • +35 •percent to 10 strategy with sustainable Value substitute 30% increases production process, e.g. management system, score • +25 percentimpact products. substitution, reduction percent of CIP through products through new added • Marketing costs • Energy budget • R&D • Use 40 percent toand avoidance . • 25 % increase designs consumption from RES production cost Provide products Flexibility of • Customer • Lead-time • +50 percent • -10 percent Engage customers to survey Improve order planning through to Culture of • Employee • 85 percent Anonymous employee survey tailored to production satisfaction • Set-up time • -15 percent needs and identify trends, focus effective customers involvement sustainability satisfaction customers’ needs • Loyalty ratio (re- also on buying habits. set up of identify problems, processes • Time to customer • 50 -20 percent • Improvement by • percent • 15 suggestions (design) incentive schema, CIP buy rate) Training of staff, employees per quarter networking events, • Recruitment of • +20 percent Optimization of internal and communication platform, Univ. Gradates applications external logistic, optimize improving working atmosphere supplier management Müller, Opierzynski CSR Training for Industries, 2009
  • 43. CSR Training Workshop for Industries Performance Reporting Controlling Assessment Continuous Improvement Müller, Opierzynski CSR Training for Industries, 2009
  • 44. CSR Training Workshop for Industries Development of a CSR Performance Assessment Systems Assessment Plan Goal system for the company Activity specification Stakeholder engagement Assessment Procedure Defined procedure (reporting cycles, assessment meetings) Responsibilities / competences Standard key performance indicators Change management plan for improvements Communication plan Review procedure Assessment Reports Types Monitoring, benchmarking, audit / internal/external Content KPIs, benchmarks, goal achievement, improvement monitoring Structure Specific definition, graphics, results Reporting Publication, frequency, work flow Müller, Opierzynski CSR Training for Industries, 2009
  • 45. CSR Training Workshop for Industries Performance assessment / closed-loop controls Company Top Management Information flow Area 1 Area 2 Area n Production Area Department 1 Department 2 Department n Material Flow Department Closed Loop Closed Loop Closed Loop Müller, Opierzynski CSR Training for Industries, 2009
  • 46. CSR Training Workshop for Industries Procedures, Responsibility and Competences Ways of decisions Ways of communication CEO Director Manager Master Forman Employee A B levels เกรงใจ graengdjai ?? Interfaces Müller, Opierzynski CSR Training for Industries, 2009
  • 47. CSR Training Workshop for Industries Challenges for CSR activity implementation & performance controlling Established management structures and processes Hierarchical power, prestige, career related interests of employees etc. employees Assumptions, thoughts and beliefs of employees regarding goals and activities Insecurity and rejection caused by transparency and quantitative controlling quantitative etc. Strong commitment from top management Creation of awareness and open mind-set of employees (internal acceptance) mind- Proactive approach to tackle potential mental reservations of employees employees Establishing a discourse-oriented infrastructure (e.g. internal discussion on activities discourse- before implementation) Involvement of various functions and departments Consideration of micro-political issues (influence and hierarchical power) micro- Integration into general management (avoid separation of management systems!) management Regular revision according to performance and changes in corporate strategy corporate … Müller, Opierzynski CSR Training for Industries, 2009
  • 48. CSR Training Workshop for Industries Further reading / listening Leveraging the Balanced Scorecard for Social Responsibility and Reporting, Michael E Nagel, Balanced Scorecard Collaborative, Inc., 2005, webcast (Why the Balanced Scorecard is a powerful tool for managing and communicating corporate social responsibility) Sustainability management with the Balanced Scorecard, Thomas Bieker, Institute for Economy and the Environment at the University of St. Gallen (IWOe-HSG) Müller, Opierzynski CSR Training for Industries, 2009
  • 49. CSR Training Workshop for Industries ICT and business management Müller, Opierzynski CSR Training for Industries, 2009
  • 50. CSR Training Workshop for Industries Ensuring business performance and competition levels From resource and labor intensive to more knowledge based production pattern through adaptation of advanced business management practices World Bank ranking Thailand – overall business efficiency index versus knowledge economy index 34 – 56 (business performance versus base for economic success) Total Factor Productivity (TFP) is regarded as technical productivity Statistical method to determine economic development drivers Technology growth and efficiency main sub-sections of TFP Knowledge economy index reflects ability to employ technological progress for economic prosperity World Bank survey of over 20.000 businesses in low- and middle-income countries Result: companies using ICT were found to have 60% higher profits and 15% higher re- investment rates, the value added per employee was about 3.400 US$ higher (average base of value added per employee / a: 7.000 US$). The Global Competitiveness Index rankings, 2007–2008 comparisons, World Economic Forum The Role of ICT in Doing Business, Information and Communications for Development, 2006, World Bank, www.worldbank.org/ic4d Müller, Opierzynski CSR Training for Industries, 2009
  • 51. CSR Training Workshop for Industries Adaptation of advanced business management – key areas and approaches Strategic business management – CSR CSR – holistic and strategic management approach to lead towards environmental-friendly and socially advanced businesses, Integration of environmental and social factors meaningful into business practices Operational business management – Resource Management process management approaches to enable effective planning and efficient use of environmental related resources (Process Monitoring & Controlling and Enterprise Resource Planning) Performance evaluation – Environmental Cost Accounting and Investment Appraisal activity based, physical and monetary accounting for impact and opportunity quantification enables fundamental decision support through quantification of environmentally related costs and investment opportunities (e.g. technology evaluation) Communication and business culture which contribute to organisational learning Cross-functional methods, e.g. Continuous Improvement Processes, Knowledge Management, Stakeholder Relationships Management Müller, Opierzynski CSR Training for Industries, 2009
  • 52. CSR Training Workshop for Industries General requirements for the adaptation of advanced business management Enhancing creativity and know-how of employees Enhancing organizational learning Systematic comprehensive and targeted communication Creating transparency and managerial awareness of business processes Both, transparency and awareness depend on the ability of companies (particularly SMEs) to collect, process, and analyze respective data Hence, modern business management depends on availability and efficiency of corresponding systems for data processing system (so-called advanced ICT) Müller, Opierzynski CSR Training for Industries, 2009
  • 53. CSR Training Workshop for Industries Reasons for insufficient level of ICT adoption Poor service of support infrastructures While basic infrastructures and ICT equipment are accessible in Thailand, service result in limited business access and and support infrastructures are underdeveloped. low application levels Most advanced ICT products are ICT firms used to target large enterprises (budget, HR to run state-of-the-art ICT). designed for larger firms, not SMEs These products are often too expensive and too complex for SME users. Limited ICT literacy of SME owners Many SME owners are unfamiliar with operating a computer, skeptical of the hinders their ability to choose concrete benefits for the core business, and share the stereotype that advanced ICT is only for larger companies. Limited ICT literacy of employees in Even if SME owners have a strategic understanding of why they should adopt SMEs hinders ICT adoption ICT, their staff is often poorly trained. Training costs both time and money – resources that SMEs usually lack. Adopting ICT is not a technical ICT is a difficult task for companies of all sizes, whether they are in developed or challenge developing countries. The main challenge is, it must go along with organizational and structural changes in companies. Lack of financing options limits SME IT budgets are usually small or nonexistent. In addition, adopting ICT is not a one- ability to purchase ICT time cost because there are ongoing costs of maintaining and upgrading hardware and software, and human capacity building. Müller, Opierzynski CSR Training for Industries, 2009
  • 54. CSR Training Workshop for Industries ICT for business management Sustainable business success needs adequate controlling and supporting systems. A large number of Thai companies are not prepared for the future! ? (IT&C FORCE 04) IT systems used to support controlling and management tasks and real benefit (or benefit from future use) Business assessment based on indicator Process monitoring with indicator Internal communication Internal documentation In-house gap analysis Representation and analysis of material flows Simulation of processes Preparation of material and energy balances External documentation/communication Recycling or waste exchange Definition of environmentally oriented objectives 80% 60% 40% 20% 0% 0% 20% 40% 60% 80% 100% in use not in use very great and great Müller, Opierzynski CSR Training for Industries, 2009
  • 55. CSR Training Workshop for Industries Selected advanced ICT for business management Examples for SM approach Function Link advanced ICT Open Bravo, SoFi Resource Management, Indicator based process monitoring from http://forge.openbravo.com, CSR, Environmental manufacturing process to supply chains www.pe-international.com/sofi Cost Accounting and Enterprise Resource Planning Redmine Environmental Workflow management for continuous www.redmine.org/ Management, CSR improvement processes Umberto Resource Management, Material and energy flow analysis, www.umberto.de/en Environmental process simulation Investment Appraisal Drupal, Stakeholder Internal / external communication, http://acquia.com/products- SugarCRM Relationship stakeholder involvement (CRM) services/acquia-drupal , Management www.sugarcrm.com E-Front, Elgg Knowledge web 2.0 e-learning and knowledge www.efrontlearning.net Management, e- management for businesses, Internal / http://community.elgg.org Learning for business external communication Müller, Opierzynski CSR Training for Industries, 2009
  • 56. CSR Training Workshop for Industries Resource flow analysis www.modiconsult.com Müller, Opierzynski CSR Training for Industries, 2009
  • 57. CSR Training Workshop for Industries Open Source Software Computer software for which the source code are provided under a variety of software license License examples: Apache License, GNU General Public License, GNU Lesser General Public License, MIT License GNU General Public License most popular (about 2/3 of projects listed on SourceForge.net) Permits users to use, change, and improve the software under specified conditions Permits to redistribute it in modified or unmodified forms under specified conditions Often developed in public or collaborative manner web-based source code repositories offer centralized location for developers to control and manage open source software development projects e.g. SourceForge, world largest development site, more than 230,000 projects with over 2 million registered users, 34 million unique visitors each month Linux, MySQL, Firefox, WordPress, xt:commerce, Elgg, OpenOffice, Redmine … http://en.wikipedia.org/wiki/Open_Source_Definition http://sourceforge.net/ http://opensource.yeebase.com/top100 Müller, Opierzynski CSR Training for Industries, 2009
  • 58. CSR Training Workshop for Industries Redmine - www.redmine.org Flexible project management web application to manage, document and track work Written in Ruby on Rails framework Open source and released under the terms of the GNU GPL v2 Multiple data base support Issue management system Refers to the discipline and process of managing business tasks Workflow, communication support and controlling Typical application: complaint, suggestion and project management Main features: Multiple projects support, flexible role based access control Flexible issue tracking system, news, documents & files management Feeds & email notifications, per project wiki and forums Time tracking, custom fields for issues, time-entries, projects and users Multilanguage support, Multiple databases support (MySQL, PostgreSQL or SQLite) Müller, Opierzynski CSR Training for Industries, 2009
  • 59. CSR Training Workshop for Industries Redmine – example for issue workflow Typical issue workflow [issue submitted] -> [open] -> [assigned] -> [solved] -> [in evaluation] -> [closed] Often tasks and work are completed in loops [assigned] Example for electronic workflow with regard to roles: 1. issue submitted by a customer, salesperson, employee 2. issue is relocated to the responsible employee’s inbox 3. employee evaluates the issue and fulfills the task 4. In case task can not be completed issues is assigned to the next appropriate employee (workflow) until task is completed 5. When task is completed result will be evaluated and closed 6. Originator will be notified Workflow, inputs and outputs fully documented in the system Müller, Opierzynski CSR Training for Industries, 2009
  • 60. CSR Training Workshop for Industries Indicator Management Process Management Müller, Opierzynski CSR Training for Industries, 2009
  • 61. CSR Training Workshop for Industries Project proposition: Transition of SMEs and supply chain networks towards sustainable production processes through an active uptake of ICT solutions for sustainability management – ICT4SM Objectives 1. To develop a portfolio of efficient ICT-based sustainability management tools and solutions tailored to the local conditions in Southeast Asia and needs of local SMEs across various industrial sectors 2. To stimulate and facilitate an uptake of ICT-based sustainability management methods and tools in significant number of regional SMEs and to improve their competitiveness and local environment situation 3. To establish a service infrastructure for fostering sustainability management culture and capacity 4. To encourage uptake of sustainability management tools and practices on national/regional level through active dissemination and promotion activities Müller, Opierzynski CSR Training for Industries, 2009
  • 62. CSR Training Workshop for Industries Example for combining tools and services for on demand application Müller, Opierzynski CSR Training for Industries, 2009
  • 63. CSR Training Workshop for Industries Further reading Small and Medium Enterprises and ICT, Vadim Kotelnikov (Foreword by Kim Hak-Su), UNDP- APDIP, APCICT, 2007 The e-primer looks at how the knowledge-based economy has impacted small and medium enterprises (SMEs); explores why so few SMEs have adopted why SMEs should adopt ICT; provides policy recommendations for promoting SME adoption of ICT. The Role of ICT in Doing Business, Information and Communications for Development, 2006, World Bank, (IC4D is a regular publication of the World Bank on the critical role of ICT in economic development. www.worldbank.org/ic4d Towards a Knowledge Economy in Thailand, Office of the National Economic and Social Development Board, World Bank, 2008 (Fundamental reasons for Thai SMEs to switch to more sustainable and innovation-based development patterns) How businesses are using Web 2.0, McKinsey Global Survey IT’s unmet potential, McKinsey Global Survey Results, 2008 Müller, Opierzynski CSR Training for Industries, 2009