Corporate Social Responsibility in the Innovation Process, The Danish Case, as a concept


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An introduction to CSR and Innovation, regulations and frameworks

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Corporate Social Responsibility in the Innovation Process, The Danish Case, as a concept

  1. 1. 04-10-2010 Corporate Social Responsibility in the Innovation Process. The Danish Case, as a concept Complimentary work for DEA Phd. in Management and Marketing Year: 2008-2010 Department of Management and Marketing Universidade de Vigo, Spain Author: JORGE OLIVEIRA TEIXEIRA Director : PEDRO FIGUEROA DORREGO, Phd 2010/10/05Contents1. Introduction to CSR2. Corporate Social Responsibility3. Innovation4. Corporate Social Responsibility and Innovation5. The Danish Case in CSR and Innovation6. Notes for future considerations Business Innovation Conference,Presented 2 at ILLINOIS INSTITUTE OF TECHNOLOGY 1
  2. 2. 04-10-20102. Corporate Social Responsibility Business Innovation Conference,Presented05-10-2010 3 at ILLINOIS INSTITUTE OF TECHNOLOGY2. Corporate Social Responsibility (one definition)“An evolving concept, not universally accepted definition;The way organizations integrate social, environmental andeconomic concerns into their values, culture, decision-making,strategy and operations, and thereby establish better practiceswithin the organization, create wealth and improve society”. Business Innovation Conference,Presented05-10-2010 4 at ILLINOIS INSTITUTE OF TECHNOLOGY 2
  3. 3. 04-10-20102.1 Introduction to CSR CSR Voluntary Collective Agreements Law Regulated Business Innovation Conference,Presented05-10-2010 5 at ILLINOIS INSTITUTE OF TECHNOLOGY2.2 Relationship Between an organization its stakehoders and society Business Innovation Conference,Presented05-10-2010 6 at ILLINOIS INSTITUTE OF TECHNOLOGY 3
  4. 4. 04-10-20102.3 Corporate Social Responsibility activities Stakeholder dialogue Communic Employee ation Management CSR Visions and Customer Innovation values Environm Supplier ental Community Business Innovation Conference,Presented05-10-2010 7 at ILLINOIS INSTITUTE OF TECHNOLOGY2.4 Corporate Social Responsibility activities • Why • What Communication • When • Who • Where Stakeholder • Who are they • Dialogue and inclusion dialogue • Communication Employee • Prevention • Retention activities • Integration Business Innovation Conference,Presented05-10-2010 8 at ILLINOIS INSTITUTE OF TECHNOLOGY 4
  5. 5. 04-10-20102.4 Corporate Social Responsibility activities • Pollution prevention Environmental • Waste minimizing activities • Reduction of energy, water, etc Community • Community support • Contribution and sponsorship activities • Partnerships • Risk assessment Supplier • Guidelines activities • Codes of Conduct • Cooperation Business Innovation Conference,Presented05-10-2010 9 at ILLINOIS INSTITUTE OF TECHNOLOGY2.4 Corporate Social Responsibility activities Customer • Demands from, and dialogue with customers activities • Product labels • New process CSR • New Products • New Services Innovation • CSR Profile Business models Business Innovation Conference,Presented05-10-2010 10 at ILLINOIS INSTITUTE OF TECHNOLOGY 5
  6. 6. 04-10-20102.5 Advantages of Business Driven Social Responsibility Lower cost trough Better Environmental reputation management and New reduce energy products consumption RESPONSIBLE BUSINESS Greater More Supplier Committed relaiability Enhanced staff Product differentiation Business Innovation Conference,Presented05-10-2010 11 at ILLINOIS INSTITUTE OF TECHNOLOGY2.6 The Big picture Business Innovation Conference,Presented05-10-2010 12 at ILLINOIS INSTITUTE OF TECHNOLOGY 6
  7. 7. 04-10-20102.7 The CSR Approach Defensive Offensive •Handle problems •Focus on request Business •Handle Requests •Establish norms •Avoid bad publicity •Stand out •Go beyond sector standards Sector •Comply with sector •Differentiate yourself standards from other business in your sector •Contribute to local •Await agreements, community Community collective agreements •Market yourself on the or statutory requirements basis of your contribution Business Innovation Conference,Presented05-10-2010 13 at ILLINOIS INSTITUTE OF TECHNOLOGY2.8 Cyclical Matrix of Corporate Social responsibility • Social • Ethics and Accountability Human and Social Resources Investment Community Workplace Environment Marketplace • Environment • Corporate Protection governance and and economic Sustainability Responsibility G.K Kanji and P.K. Chopra, 2010 Business Innovation Conference,Presented05-10-2010 14 at ILLINOIS INSTITUTE OF TECHNOLOGY 7
  8. 8. 04-10-20103. Innovation Business Innovation Conference,Presented05-10-2010 15 at ILLINOIS INSTITUTE OF TECHNOLOGYKey definitionAn innovation is the implementation of a new or significantly improved product (good or service), or process, a new marketing method, or new organisational method inbusiness practices, workplace organisation or external relations.Innovation activities include all scientific, technological, organisational, financial and commercial steps which actually lead, or are intend to lead, to the implementation of innovations. Some of these activities may be innovative in their own right, while others are not novel but are necessary to implementation. Oslo Manual 2005 Business Innovation Conference,Presented05-10-2010 16 at ILLINOIS INSTITUTE OF TECHNOLOGY 8
  9. 9. 04-10-2010Types of Innovations Types of Innovations Product Oslo Manual 2005 Process Organization Marketing Business Innovation Conference,Presented05-10-2010 17 at ILLINOIS INSTITUTE OF TECHNOLOGY3.1 Types of Innovations represent technical advance so significant that no increase in scale, efficiency, or design can make older technologies competitive with the new Radical & Incremental Technology (Tushman & Anderson,1986) to new customers and so-far un served Sustaining and Disruptive markets Innovation can also be Innovation characterized by its ability to either strengthen a firms existing (Hockerts & Morsing, 2008) capabilities and market position or to disrupt them by rendering competencies obsolete or reaching out User-driven Innovation (Von Hippel, 2001) introduced the notion of (lead) user-driven innovation to describe the ability of user communities to initiate and develop exceedingly complex products sometimes even without any specific manufacturer involvement Business Innovation Conference,Presented05-10-2010 18 at ILLINOIS INSTITUTE OF TECHNOLOGY 9
  10. 10. 04-10-2010Elements of a system Innovation Cotec, Model 1998 Business Innovation Conference,Presented05-10-2010 19 at ILLINOIS INSTITUTE OF TECHNOLOGYThe Innovation measurement Framework Oslo Manual, 2005 Business Innovation Conference,Presented05-10-2010 20 at ILLINOIS INSTITUTE OF TECHNOLOGY 10
  11. 11. 04-10-20104. Corporate Social Responsibility and Innovation Business Innovation Conference,Presented05-10-2010 21 at ILLINOIS INSTITUTE OF TECHNOLOGY The term corporate social innovation is increasingly taken up by practitioners. Patrick Cescau CEO of Unilever for example defines corporate social innovation as a way of "finding new products and services that meet not only the functional needs of consumers for tasty food or clean clothes but also their wider aspirations as citizens."(cited in Webb, 2007). Business Innovation Conference,Presented05-10-2010 22 at ILLINOIS INSTITUTE OF TECHNOLOGY 11
  12. 12. 04-10-20104.1 The CSR innovation objective field In a strategic CSR innovation process, business use their core competences to develop new concepts, products, etc. Business Innovation Conference,Presented05-10-2010 at ILLINOIS INSTITUTE OF TECHNOLOGY 234.2 CSR AND INNOVATION – What is it? Literature bringing together CSR and innovation has emerged gradually over the past decade. One interpretation of “social innovation” can refer to improvements in the CSR process. Examples could be improved social reporting tools or CSR management systems. Corporate Social Innovation The term “corporate social innovation” was first introduced by Rosabeth Moss Kanter (1999) who argues that firms should use social issues as a learning laboratory for identifying unmet needs and for developing solutions that create new markets. Business Innovation Conference,Presented05-10-2010 24 at ILLINOIS INSTITUTE OF TECHNOLOGY 12
  13. 13. 04-10-20104.4 CSR AND INNOVATION – What is it ?Social EntrepreneurshipAccording to Hockerts it describes “the discovery and sustainableexploitation of opportunities to create public goods”.This is usually done through the generation of disequilibria in marketand non-market environments. Social Entrepreneurship can in somecases lead to the creation of social enterprises. These social venturesare hybrid organizations exhibiting characteristics of both the for-profitand not for profit sector. Business Innovation Conference,Presented05-10-2010 25 at ILLINOIS INSTITUTE OF TECHNOLOGY4.4 CSR AND INNOVATION – What is it ?Eco-InnovationThe notion that sustainable development drives disruptive innovationshas come quite naturally to the sustainability debate (Hockerts,1999,2003). Sustainability innovations (also called eco-innovations, eco-design, eco-preneurship, or cleantechnology venturing) have beenproposed as a source for "environmentally benign growth" (Dyllick,1994). Business Innovation Conference,Presented05-10-2010 26 at ILLINOIS INSTITUTE OF TECHNOLOGY 13
  14. 14. 04-10-20104.5 Base of the Pyramid (BOP)An important subtheme of corporate social innovation is thefocus on low-income markets. Prahalad and Hart (1999) talk in thiscontext of the potential of the bottom or base of the pyramid(BOP). Ex: reverse innovation The BOP premise is that by focusing on the unmet needs of low-income populations firms can create profitable markets while alsohelping the poor address some of their most urgent.Prahalad’s most notable assumption is that BOP markets have topay a “poverty premium”(This means that many poor have to paymore for products and services such as food, water,medication,credit, or telecommunication, than their middle or upper classcompatriots. Business Innovation Conference,Presented05-10-2010 27 at ILLINOIS INSTITUTE OF TECHNOLOGY4.6 CSR and Innovation – How Does It Happen? Business Innovation Conference,Presented05-10-2010 28 at ILLINOIS INSTITUTE OF TECHNOLOGY 14
  15. 15. 04-10-20105. The Danish Case in CSR and Innovation Business Innovation Conference,Presented05-10-2010 29 at ILLINOIS INSTITUTE OF TECHNOLOGY5.1 General Principles UN GLOBAL COMPACT General UN PRI principles OCDE Guidelines Business Innovation Conference,Presented05-10-2010 30 at ILLINOIS INSTITUTE OF TECHNOLOGY 15
  16. 16. 04-10-20105.2 Key Specific Principles UN Environment Programe Financial Iniciative (UNEP FI) The Equator Principles Global Reporting Iniciative ( GRI) Key specific principles Transparency International – Business Principles for Countering Bribery ( BPCB) Carbon Disclosure Project (CDP) UN Caring for Climate Business Innovation Conference,Presented05-10-2010 31 at ILLINOIS INSTITUTE OF TECHNOLOGY5.3 The Danish model for CSR in innovation Business Process CSR Product Customer Contact Business Innovation Conference,Presented05-10-2010 32 at ILLINOIS INSTITUTE OF TECHNOLOGY 16
  17. 17. 04-10-2010 5.4 Key Action Areas Wants the marketing of The government wants to Denmark for responsible underpin large growth to help Danish business´CSR reportsbusiness reap greater benefits from their S R work The state sector also has a number of options for The government wants aiding in disseminating business to contribute S R through its own actively to tacking global activities climate challenges Business Innovation Conference,Presented 05-10-2010 33 at ILLINOIS INSTITUTE OF TECHNOLOGY 5.5 Clarification through 12 types of innovation Type of Innovation Explanation CSR Example Business Innovation Conference,Presented 05-10-2010 34 at ILLINOIS INSTITUTE OF TECHNOLOGY 17
  18. 18. 04-10-20105.5a Clarification through 12 types of innovation Type of Innovation Explanation CSR Example Business Innovation Conference,Presented05-10-2010 35 at ILLINOIS INSTITUTE OF TECHNOLOGY6. Notes for future considerations• Greater attention to political accountability in the innovation process• More informed consumers• Global brands• The noticeable increase of socially responsible brands• New consumers trends• Measure of Corporate Social Performance (CSP).• Aplication to SME• Public concern about Corporate Social Responsibility Business Innovation Conference,Presented05-10-2010 36 at ILLINOIS INSTITUTE OF TECHNOLOGY 18
  19. 19. 04-10-2010 Q&A Business Innovation Conference,Presented05-10-2010 37 at ILLINOIS INSTITUTE OF TECHNOLOGY Thank you for your attention Jorge Oliveira Teixeira Business Innovation Conference,Presented05-10-2010 38 at ILLINOIS INSTITUTE OF TECHNOLOGY 19
  20. 20. 04-10-2010Appendix 1 Business Innovation Conference,Presented05-10-2010 39 at ILLINOIS INSTITUTE OF TECHNOLOGYAppendix 2 Business Innovation Conference,Presented05-10-2010 40 at ILLINOIS INSTITUTE OF TECHNOLOGY 20
  21. 21. 04-10-2010Appendix 3 Business Innovation Conference,Presented05-10-2010 41 at ILLINOIS INSTITUTE OF TECHNOLOGYAppendix 4 Business Innovation Conference,Presented05-10-2010 42 at ILLINOIS INSTITUTE OF TECHNOLOGY 21
  22. 22. 04-10-2010Appendix 5 • KEY ACTION AREA 1: PROPAGATING BUSINESS-DRIVEN SOCIAL RESPONSiBILITY • The Government wants to: • encourage Danish companies and investors to continue and develop their commitment and CSR work • make it mandatory for large business to report on CSR in the management’s review of the annual report • make it mandatory for institutional investors and unit trust to report on CSR in the management’s review of the annual report • set up to the Social Responsibility Council charged with making recommendations for the Government, the corporate sector and associations • establish a new social responsibility communication portal ( • organize international conference “Danish Business innovating for World Challenges” to identify innovation areas for Danish business • set up a knowledge network among organizations, researchers and advisors on businesses-driven social responsibility and responsible supplier management • advise business though Danish representations in other countries • work to ensure a transparent market that promotes social responsibility considerations in consumer purchasing. The Government will launch a study of consumers‘ role in CSR • prepare a biennial progress report on Danish businesses’ observance of and commitment to Global Compact and PRI, first time in 2010 Business Innovation Conference,Presented05-10-2010 43 at ILLINOIS INSTITUTE OF TECHNOLOGYAppendix 6 • KEY ACTION AREA 2: PROMOTING BUSINESSES’ SOCIAL RESPONSIBILITY THROUGH GOVERNMENT ACTIVITIES • The Government wants to: • ensure that, in the future, joint state supply contracts will systematically embed requirements for social responsibility as articulated in the conventions that provide the foundation for the UN Global Compact • ensure that all state procurement officers can access the guidelines for embedding social responsibility • open up dialogue with local authorities and regions with a view to disseminating experience in embedding social responsibility in their areas • make it mandatory for state-owned public limited companies to report to CSR in the management‘s review for the annual report • ensure that all major state-owned public limited companies accede to the UN Global Compact • ensure that the Vækstfonden accedes to the UN principles for responsible investment (PRI) • ensure that the Eksport Kredit Fonden (EKF) accedes to the UN Global Compact • continue its work for embedding social responsible in Danish development work • ensure that the Industrialiseringsfonden for udviklingslande (IFU) and the Investment Fund for Central and Eastern Europe (Iø) accede to the UN Global Compact • organize conferences on businesses‘ social responsibility in developing countries jointly with Danish representations outside Denmark, local players and businesses • ensure that the regional trade and industry development system contributes to propagating business-driven social responsibility • strive to ensure that international investment banks embed social responsibility in their business and investment strategies Business Innovation Conference,Presented05-10-2010 44 at ILLINOIS INSTITUTE OF TECHNOLOGY 22
  23. 23. 04-10-2010Appendix 7 • KEY ACTION AREA 3: CORPORATE SECTOR‘S CLIMATE RESPONSiBILITY • The Government wants to: • encourage businesses to include sections of climate responsibility in their reports on CSR in the management‘s review of the annual report (see the mandatory requirement in key action area 1) • jointly with Confederation of Danish industries develop the Climate Compass - a web- based climate tool aimed at helping businesses prepare climate accounts and climate strategies • initiate four partnerships on climate responsibility in relations to investors, in the retail sector, the construction sector and the maritime sector • KEY ACTION AREA 4: MARKETING DENMARK FOR RESPONSIBLE GROWTH • The Government wants the marketing of Denmark for responsible growth to help Danish businesses reap greater benefits from their social responsibility work. • The Government wants to: • promote Danish tools and competences in the area of corporate social responsibility • head up a 2010 international summit on international standards for social responsibility in Copenhagen (ISO 26000) • organize an international conference on responsible investments aimed at creating the basics for better targeted and usability oriented research Business Innovation Conference,Presented05-10-2010 45 at ILLINOIS INSTITUTE OF TECHNOLOGYCredits• Draft international Standard ISO/DIS 26000• Oslo Manual, Guidelines for Collecting and interpreting Innovation Data• Action Plan for Corporate Social Responsibility, The Danish Government, May 2006• Modelling The Firm in its Markets and Organizational Environment: methodologies for Studying Corporate Social Respnsibility, Gopal K. kanji and Parvesh K. Chopra, Total Quality Management.• Project People & Profit, The Danish Commerce and Companies Agency Business Innovation Conference,Presented05-10-2010 46 at ILLINOIS INSTITUTE OF TECHNOLOGY 23