An opinion about what CSR staffs in South Korea thinks about the topic that they are dealing with, and what the topic should actually mean. Please check http://www.duncansays.info for more communication.

1. Posting #1
The Myth about Corporate Social Responsibility.

2. Okay then, I hereby wright initial sentence of my first posting.
While participating several CSR projects in South Korea, I found that there is a
common belief about CSR between my clients.
The common belief sometimes affected as a psychological obstacle which keeps
the agreement of 'Corporates should be socially responsible' from being formed
throughout the entire organization.
That invisible obstacle created by a
single belief about CSR is the reason I
made up my mind to do this.
I am going to reveal what the belief is,
think whether it is true, and set up my
definition of 'what is CSR,' followed
by 'how should it be done' and 'who
should be in charge' if the belief turns
out not to be true.
Corporates
Something
is keeping me
from hitting on the
bull's eye..

3. As I mentioned just before, superior-quality discussions about "How can
businesses be socially responsible" has vigorously conducted at least for past
decade, I think now should be a time for us professionals to have a universal
agreement about what CSR is.
Fortunately, a situation in South Korea is 99% promising, because while
conducting a few projects in South Korea, I was able to find a consistent
tendency from a perception about 'what CSR is' of Korean enterprises' CSR
personnel, who were mostly my clients.
We think
CSR is..
Corporate A
MR. & Ms. CSR staff
Corporate B
Ms. CSR Manager
& Mr. CSR staff

4. But, what keeps me from claiming of Korea's complete understanding of CSR is
the fact that I found a single blemish to be covered in the wide-spread-belief
about the topic between the CSR personnel, which could be summarized like
below:
"Social responsibility and profitability are in a trade-off relationship. Which means,
corporates trying to be socially responsible burdens themselves too much so that
eventually they have to risk their profitability to achieve their so-called 'social
responsibility' goal."
Social Responsibility
Profit
Corporate

5. Should that myth be considered as the truth?
Of course, I believe that CSR personnel of Korean enterprises are reasonable
enough, and they must have built their faith about 'trade-off' relationship
between profitability and social responsibility upon their experiences and may
be insights gained from individual studies and researches.
However, I think rationality of humankind is somewhat bounded. Which means,
I think hypothesis built upon the reasonable basis still have a possibility to be
biased because individuals tend to stick in the direction of thought they have
initially set.
It was
a snake!
It was
a tree!
It was
a fan!
It was
a rope!

6. For current CSR personnel of Korean enterprises, usual suspects who had the
greatest influence on forming the first impression about the topic is their senior
colleague.
And considering the occupational ancestors of Korean CSR personnel, which
are mostly PR staff, their duty of helping corporate to give better impression to
general public might have required some 'spending money without any
expectations on return.' activities.
For example, giving a donation to
nearby disability care center or having
employees participate in a breast
cancer prevention campaign might
seem to have a 'trade-off' relationship
with corporate productivity, since those
actions still require resources to be
consumed while benefits from them are
usually lack of clarity.
This makes me feel good.
But what is all of these good for
my job?

7. However, is CSR all about donation, charity, and philanthropy?
I would firmly say 'NO.' Even the tasks conducted by the ancestors of CSR
personnel - managing public relations - was not all about it.
In the language of a consultant, defining components of CSR as 'donation',
'charity', and 'philanthropy' could at least be mutually exclusive but cannot be
collectively exhaustive.
Well, that glacier looks
smaller than this ship!
Oh boy, seeing is
not always believing..

8. Therefore, although the vintage 'trade-off myth' about CSR in Korea might
have its basis on work experiences of not-a-few diligent employees, I would say
that believing social responsibility as a huddle in a journey for higher
profitability would seem to me as believing like below:
"I saw chickens and penguins can't fly, and I also heard from my dad that ostriches
and kiwis couldn't fly neither. They are all birds. Therefore, all birds in this world
may not be able to fly."
Oh, I see.
Birds don't
fly!
End of chapter

9. My announcement might have been a
little offensive, but my point was that
we need to scrutinize again about 'what
is CSR' to make Korean corporates
willing to believe that they should be
responsible.
One is from the most famous academic paper in South Korea explaining CSR,
and the other one is from the most recently and the most officially announced
'International Standard' about social responsibility.
In search of another hypothesis about
the topic, I already studied and
researched more than just a couple of
theories about CSR during the period
of my service as a consultant. But In
this homepage, I would briefly
introduce two definitions of CSR, to
add a small pinch of simplicity.
Huh?
That bird is
flying!?

10. The most famous definition of CSR between general publics in Korea is the
iconic 'Pyramid of Corporate Social Responsibility', suggested by Professor
Archie B. Carrol in 1991.
People usually analyze and try to understand
what do each four components of CSR mean and
the dynamics between each floor, because doing so
is indeed quite informing.
However, what have given me more insight about
the topic was a principal goal of the article, which
is according to the author, "to flesh out what it
means to manage stakeholders in an ethical or
moral fashion."
Using that sentence as a logical basis, I assumed
that Professor Carroll defines CSR as an 'activity
conducted by corporate to manage stakeholders in
a righteous manner.'
Picture
'Pyramid of Corporate Social Responsibility',
Archie B. Carrol, 1991.
ECONOMIC
responsibilities
Be Profitable
The foundation upon which all others rest
LEGAL
responsibilities
Obey the Law
Law is society’s codification of right and wrong;
Play by the rules
ETHICAL
responsibilities
Be ethical
Obligation to do what is right, just and fair;
Avoid harm
PHILANTHROPIC
responsibilities
Be a good Corporate Citizen
Contribute resources to the community;
improve quality of life

11. ISO 26000, officially revealed in November 2010, may not be the best-known
publication about CSR in Korea, but most CSR professionals kept their eyes on
how it defines the topic.
According to the international standard, social responsibility means below:
"Responsibility of an organization for the impacts
of its decisions and activities on society and the
environment, through transparent and ethical
behavior."
ISO 26000 also presents 'The Seven Core Subjects'
and examples of 'transparent and ethical behaviors'
expected to corporates.
But putting those core subjects aside, the main point
of ISO's definition of CSR is that Corporates should
treat the society and the environment as righteously
as possible.
Picture
'The Seven Core Subjects', ISO 26000, 2010.
Community
involvement and
development
Human rights
Labor
practices
The Environment
Fair operating
practices
Consumer
issues
ORGANIZATION

12. Including those two definitions that I introduced just before, many debates
about CSR explains the topic as 'caring for wider variety of corporates'
interested parties, than just shareholders, to get more satisfaction from them.'
And for those who ardently argues that corporates should be socially
responsible, what makes them think so is the concern described as below:
"Like that of shareholders, the power of other interested parties is also getting
bigger enough to have an influence on corporates' profitability, which enhances the
complexity of decision making."
Corporates
Shareholders

13. Therefore, basing on that concern, I would bring a new hypothesis about CSR,
claiming that it could be a corporates' activity to hedge risks related to
interested parties including shareholders, to secure or improve their
profitability.
Social Responsibility
Profit
Corporate
Should've done
this earlier!
End of chapter

14. Following to bringing the new hypothesis about CSR, I would also like to define
three steps for corporates to hedge risks related to all interested
parties(hereinafter 'stakeholders') as Identification, Response, and Analysis.
Those 'three steps' could be translated into more familiar terms such as Plan,
Do, and See, or the last step still can be divided into Check and Act. However, I
would adhere my choice to the first package of terms, in a purpose of delivering
my recommendation for corporates on each step with the higher level of clarity.

15. In the first, which is an 'Identification' stage, I recommend corporates to verify
the answer for at least three questions.
Corporates should begin with defining "what do they do to make a profit?",
followed by clarifying "which stakeholders are, and how each of them is
affected by corporates' pursuit of profit?"
After successfully answering those two questions, corporates finally ought to
decide "what kind of, and how much influences do they think they should exert
on each stakeholder to make a higher profit?"
1. We make cars
2. We sell cars
3. ????
4. PROFIT!
1. Engineers are
overworking
2. Local communities
suffer from noise
To make cars…
1. Salespersons gets lots
of complains
2. Customers want
more information
about products
$
To sell cars…
1. Help engineers
produce more in a
shorter time
2. Response to local
complain
3. Enhance
salespersons'
capability
4. Promote more
about our product
*Of course, it should be much more complicated than this!

16. The most important direction for
corporates to deal with those three
considerations is that a particular team
or position should not be the only entity
to decide answers.
In the process of preparing the
'answers' to each question, corporates
need to take opinions of various
internal and external stakeholders into
account holistically.
Therefore, diverse interacting measures including employee survey, customer
focus group interview, due diligence on business partners, IR presentations and
so on could be tried both on stakeholders already in a contact list and
suspicious parties which argue that they are severely affected by corporates'
business.
Would you give
me a hand?
Yup, how can I
help you?

17. Corporates should have eventually
decided about 'what kind of' and 'how
much' influence would they like to
make on their each different
stakeholder, by passing through the
previous stage. In short, their CSR
strategy should have been set.
Now at this stage, corporates should
take 'actions' such as 'changing
business partner selection policy',
'installing new water purifying
equipment in a plant', 'introducing new
employee training program', and even
'holding a charity bazaar to help
undernourished children in Africa' to
meet their strategic goal.
Strategy:
“Go for the dunk”
*Try not to be so serious about the basket ball strategy above ☺

18. Corporates should let each department of themselves to plan and conduct the
most appropriate action as if we call firefighters to extinguish fire and police to
arrest a thief.
However, every action plan should contain one clarification in common. It is
about "How much profit would this measure generate by when?"
Gift donation event on thanks giving
→ boost up brand awareness customers
→ improve sales in Christmas season
comes in a month
→ PROFIT!
Although corporates might face
numerous challenges to set explicit
financial expectations, I recommend
them to overcome trials and errors so
that they can figure out the dynamics
between their social responsibility and
profitability.
*Again, Things are not always simple like that!

19. After, or sometimes during 'actions' are taken, relevant departments should
review the performance and compare it to the initial action plans set at the
previous stage.
If actions were appropriate enough to enable corporates to exert desirable
influence on targeted stakeholders, action plans could remain as the same or
adjusted to aim for the higher level of influence. And if corporates evaluate
actions as failed to affect interested parties enough, related departments would
redesign the measure or at least reset the expectations.
To support corporates passing through
this stage, various groups of intelligence,
including CSR consultancies, are
making an effort to introduce
reasonable performance indicators to
add more objectivity on estimating the
performance of socially responsible
actions.
Global Reporting Initiative(GRI), am
organization that focuses on helping
corporates(and other organizations) to
report their impact on sustainability
topics, could be a good example of the
intelligence I mentioned.
Corporates could get an idea about
effective indicators to measure their
influence on stakeholders on GRI's
latest sustainability reporting
guideline, G4.
*I might have a chance to mention GRI again if I post about
Sustainability Reporting later!

20. As I referred explaining the previous stage, since prospects on financial return
of responsible activity should also be included in the plan, review on expected
monetary benefit must also be conducted.
And because I claimed that socially responsible action can be part of a quest to
secure or improve their profitability, I also want to argue that those measures
which have recalled less financial benefits ought to be defined as failures even if
they succeeded to give stakeholders targeted influences.
We donated gifts as we planned,
and brand awareness has been
boosted among kids.
But sales during Christmas
season has been estimated as
slightly below the expectation…
But the kids and parents
definitely liked it,
Maybe we just expected
too much 
End of chapter

21. According to the 'three steps' I explained so far, setting up action plans and
reviewing the performances, which are the tasks recommended to be done at
the second and the third stage, could be a role of each related departments.
However, I think the mission of the first
stage, conducting an internal and
external communication to collect
information about 'what corporates do'
and 'to whom, and which influences
they exert' to establish the corporate
strategy to fulfill social responsibility,
should be a duty of CSR personnel.
Of course, some information created
from performance analysis might also
be used for updating CSR strategy.
*Just like our body organs do each of their function, each
department of corporates should fulfill its roles and responsibilities.

22. Then, who should lead the CSR staffs and make a final decision about
corporates' pursuit tactics for social responsibility? My recommendation for
corporates is to pick up someone who can make a 'well-balanced' decision
making based on a 'holistic' consideration of internal and external opinion.
*NO! It doesn’t mean that. I kind of like that, though ☺

23. I think candidates who suit on my
recommendations are not diverse since
accessibility to the information about
every function of a corporate is usually
limited to the somewhat 'high
positions.'
Also, making well-balanced decisions
requires freedom from any conflicts of
interest, which makes an advantage go
to a person who hasn't been given any
responsibility focusing on the particular
function of corporates.
As a result, one of the highest position
which is not in charge of any
department in corporates, CEO is the
best resource to concern social
responsibility.
Directors or managers
Staffs
C-Suits
CEO
CFO COO C#O C*O
Okay, then I should be in charge of CSR.
From now on, I might have to practice this trick→
*Once again, NO!
End of chapter

24. In my first posting, what I have tried to say can be summarized into four
sentences below:
1. Many CSR personnel in Korea are depressed because they are not supported by their
colleagues since their job is far from making more profit.
2. However, considering CSR as a pack of activities that spends corporates' resource
without expecting any financial return might be right opposite to its original
intention. 'Socially Responsible' activities should be done to secure or improve their
profitability.
3. To become socially responsible, corporates should identify what they do and how they
affect on stakeholders, then take actions to exert an appropriate influence on each
targeted stakeholder, followed by performance review.
4. CSR teams should conduct internal and external communications to gather holistic
information about corporates' influence on stakeholders, and CEO has to establish a
strategy to become socially responsible, including expectations on specific financial
returns.