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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
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
CSR Training Workshop for Industries



   Background, definitions and drivers




                                         Müller, Opierzynski
                                         CSR Training for Industries, 2009
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
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
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
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
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
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
CSR Training Workshop for Industries




                                                       Guideline Social
                                                       Responsibility –
                                                       working draft 4.1
                                                       ISO 26.000



                                   Müller, Opierzynski
                                   CSR Training for Industries, 2009
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
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
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
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
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
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
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
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
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
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
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
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
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
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
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
CSR Training Workshop for Industries
  Valuing corporate social responsibility




                                            Müller, Opierzynski
                                            CSR Training for Industries, 2009
CSR Training Workshop for Industries




                                   Müller, Opierzynski
                                   CSR Training for Industries, 2009
CSR Training Workshop for Industries




                                   Müller, Opierzynski
                                   CSR Training for Industries, 2009
CSR Training Workshop for Industries




                                   Müller, Opierzynski
                                   CSR Training for Industries, 2009
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
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
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
CSR Training Workshop for Industries
Further reading, information and networking – www.sustain-asia.org




                                                      Müller, Opierzynski
                                                      CSR Training for Industries, 2009
CSR Training Workshop for Industries



Systematic integration of CSR into business operation




                                                Müller, Opierzynski
                                                CSR Training for Industries, 2009
CSR Training Workshop for Industries




 Performance
                          Reporting
  Controlling


                         Assessment



                    Continuous Improvement




                                             Müller, Opierzynski
                                             CSR Training for Industries, 2009
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
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
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
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
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
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
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
CSR Training Workshop for Industries




Performance
                                Reporting
 Controlling


                               Assessment



                          Continuous Improvement




                                                   Müller, Opierzynski
                                                   CSR Training for Industries, 2009
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
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
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
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
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
CSR Training Workshop for Industries



     ICT and business management




                                   Müller, Opierzynski
                                   CSR Training for Industries, 2009
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
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
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
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
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
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
CSR Training Workshop for Industries
        Resource flow analysis




                       www.modiconsult.com




                                        Müller, Opierzynski
                                        CSR Training for Industries, 2009
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
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
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
CSR Training Workshop for Industries

Indicator Management            Process Management




                                             Müller, Opierzynski
                                             CSR Training for Industries, 2009
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
CSR Training Workshop for Industries
Example for combining tools and services for on demand application




                                                      Müller, Opierzynski
                                                      CSR Training for Industries, 2009
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

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CSR in practice

  • 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