Strategy Discourse and the Role of Strategy in Social Responsibility and Sustainability - Assignment Example

Strategy dis and the role of strategy in social responsibility and sustainability BY YOU YOUR SCHOOL INFO HERE HERE PART I Strategy as discourse for Unilever The CEO of Unilever, Paul Polman, determined that it would be beneficial for Unilever’s market reputation and positioning by launch his Sustainable Living Plan. This plan was intended to ensure that capitalistic-based activities was performed in a responsible manner which might, in turn, give Unilever a brand image as the foremost competitive leader in corporate social responsibility. Unilever launched this plan as a means of illustrating the firm’s commitment to aligning society’s stakeholder needs and expectations to the environment, giving the firm a reputation for being responsible and promoting a positive impact on broader society. The plan consists of sustainable procurement, reducing environmental impact stemming from the company’s business model, reducing waste, recycling and curbing over-consumption of energy; as well as reduction of the firm’s carbon footprint. Having defined the Sustainable Living Plan by Unilever, Polman did an excellent job of using discourse, this being narrative and storytelling, to ensure successful implementation of these objectives. Polman opened discourse with influential members of the Consumer Goods Forum to agree to abide by practices related to sustainable palm oil production, an issue that had deforested many regions. The company is also trying to change behaviours of millions of consumers worldwide, getting them to abide by being more proactive in water consumption by taking shorter showers. The Sustainable Living Plan will not be effective without contributions by vendors, competitors and even consumer markets, something that requires discourse and narrative to achieve effectively. Storytelling is an excellent forum for sharing norms and values that have been built from an organisation’s past experiences and also describe a desirable future. It is through this discourse that leadership is developed and provides opportunities to provide a compelling vision (Buckler and Zien 1996). It is through shared stories and narratives that understanding and organisational dedication is created, familiarising individuals with dominant and compelling narratives and anecdotes that assist in gaining commitment by others to adopt the norms and values described in such stories. Storytelling is also recognised as being a predictor of trust development in relationships. Such discourse provides opportunities for the storyteller to indicate his or her competencies and level of commitment toward a particular value or objective. The process of revealing personal narratives and experiences signals that an individual is willing to be vulnerable, something important from a socio-psychological level in relationship development. Through this vulnerability, it builds emotional connection as stories have the ability to make positive changes in emotions (Denning 2002). To illustrate, the football organisation, New England Patriots, utilised shared stories and narratives about the importance of team-working as a contributing success factor for winning the Superbowl championship. This constant iteration of team-oriented stories maintains the ability to cause society members hearing this discourse to believe in the power of collaboration and team-working that will be inspirational to many for years to come. Shared stories also build a more cohesive organisational culture (Johnson, et al. 2014). Narratives build a type of shared wisdom and through storytelling, people learn what is considered acceptable behaviour. Social learning occurs through sharing stories and, when inspirational and compelling, cause individuals to try to mould their own behaviours against different symbols or rituals that are described in these stories (Johnson, et al.). Stories and narratives can also underpin the development of a type of moral imperative, where a sense of virtue and ethics is consistently reiterated through shared discourse that teaches others how they should behave (Teale, et al. 2003). There is a theory widely recognised in sociology and psychology that describes the importance of reference groups on how individuals in society build their sense of identity and belonging. Psychology recognises that one of the most fundamental needs of humans throughout the world is to be socially-accepted and maintain a feeling of social inclusion, paramount to building a person’s self-esteem. Therefore, they constantly seek this belonging as a primary emotional and socio-psychological driver (Weiten and Lloyd 2005). Stories which are shared amongst different internal or external stakeholders provide a chance to improve socialisation and relationship development. At the same time, when such stories are persuasive and inspirational, there is more psychologically-based incentive for others to emulate the actions and behaviours described by the strategist. Hence, a good storyteller with a rousing vision and ideology becomes an aspirational reference group which enhances gaining commitment by others to join the proverbial bandwagon. Dowling (2006) asserts that storytelling provides an opportunity align corporate objectives with stakeholder interests. Communications, as a leadership competency in strategic management, is often recognised as being critical to gain followership toward a change objective. Hence, Unilever can share their passion about responsible business activity, past experiences with sustainability, and a vision of moral companies that have more positive environmental impact. Strategists sharing stories with inspirational and moral implications and histories allow for mutual discourse and become, in the best case scenario, an aspirational reference group that promotes more positive social learning and willingness to adopt the same vision. By using stories and narratives that are closely akin to external and internal stakeholder values and beliefs, with a compelling and encouraging discourse, helped to gain more supplier and industry commitment to complying with responsible corporate behaviour and activity. With growth in ethical consumption, consumers that favour firms with more socially responsible values, stories are excellent methods of engaging consumers and getting their commitment toward Unilever’s sustainability vision; not an easy task without visionary discourse and mutual narrative exchanges. PART II Unilever’s Sustainable Living Plan can absolutely be considered a viable source of competitive advantage. First and foremost, there is considerable attention being given to the concept of ethical consumption, a growing trend in many disparate consumer segments to chastise firms without an ethical stance and reward firms that have a strong ethical culture and set of values. Oh and Yoon (2014) conducted an empirical study that recruited 343 different consumers, finding that when a firm publicly emphasises altruistic morality, customer segments have a much more favourable view of the quality of the products being offered by the ethical company. One multi-national company, General Motors, maintains a very strong focus on corporate social responsibility. In 2011, GM recycled nearly three million metric tonnes of waste materials rather than transporting this waste to landfills (GM 2012). The firm was also awarded the coveted Energy Star Award for developing facilities operations that had reduced greenhouse gas emissions by 35 percent (compared to competition) and used 35 percent less energy compared to many industrial players with similar scope and production output systems (GM 2012). General Motors devotes considerable capital resources toward environmentalism and sustainability as its potent efforts at corporate social responsibility, which gives the firm an edge of competition. Hence, Unilever’s broad focus on launching a successful Sustainable Living Program might have similar outcomes as those experienced by GM, who is now the number one automaker in the world in terms of revenues. Porter and Kramer (2006) assert that one of the main justifications for corporate social responsibility is to fulfil a duty of good citizenship and performing the correct actions that honours moral and ethical values with sustaining respect for communities, people and the ecological environment. These, as indicated by Oh and Yoon (2014) are expectations of the contemporary ethically-motivated consumer. However, Porter and Kramer (2006) also suggest that some CSR programs might not achieve the strategic benefits that a firm anticipates. These authors utilise the argument that companies operating in countries that carry strong stigmas might use CSR as a means of insulating a firm from growing public unrest, such as is common with energy and chemical industry organisations. This type of public placation would not, theoretically, hold long-term opportunities for a company that simply establishes socially-responsible programs to keep stakeholders from protest, boycott or raising media attention about societal anger. This type of misguided argument for engaging in CSR, as suggested by Porter and Kramer (2006), does not legitimately give a firm a valuable resource that can be exploited for competitive advantage. However, Unilever’s strategy is not just simply creating socially-responsible plans and then launching them to avoid public backlash for irresponsible capitalism. Instead, the visionary CEO seeks regular engagement with suppliers, customers and even competition to illustrate why sustainability and responsible capitalism is of benefit to everyone. These compelling narratives coupled with inspirational vision for the future illustrates the genuineness of the CEO’s Sustainable Living ideology, asserting that ethics and environmental responsibility are deeply-engrained and legitimate values of Unilever, making these arguments and persuasions much more compelling. There is a model that describes opportunities to exploit resources to achieve competitive advantage, the VRIN framework. This is an acronym for value, rarity, inimitability and non-substitutable. In the case of Unilever, CSR serves as a valuable resource, one that is a value creator, which outperforms competition. Tam (2004) offers that when customer segments perceive that a product has more value, they will also believe that the product is of higher quality. Unilever’s CSR strategies consistently use communications with stakeholder groups to illustrate the long-term benefits of its Sustainable Living Plan which links the firm’s genuine ethical values with consumer ideologies of responsible business. Hence, consistent reiteration that its products are created using sustainable business practices illustrates their value, as compared to competition (a differentiation tool), thus allowing the firm to sustain competitive advantage through CSR. Value created by the Sustainable Living Plan is not easily replicable by competition, thus giving it inimitability especially in an environment where CSR programs require considerable labour commitment and financial commitment to achieve effective sustainability results. Unilever’s Sustainable Living Program stands up well to Porter and Kramer’s concept of value chain analysis to measure the long-term impact of such a CSR strategy. Unilever’s value proposition is built on its Vitality Mission, promoting good citizenship. This means that an analysis of Unilever’s value chain, such as marketing, procurement and production would identify how the firm could reduce its carbon footprint, ensure purchase of sustainable products, or changing distribution methodology to help further reduce carbon output. Unilever seems to recognise that the firm’s holistic value, in terms of sustainability, is dependent on activities along the entire value chain. Hence, Unilever considers all societal impacts along the value chain and attempts to align its Sustainable Living Plan with established value propositions. This, in turn, gives customers a greater perception of value and more perceptions of product quality which can translate into more revenue-based profitability and customer loyalty. The diamond framework identifies six factors that influence a firm’s competitiveness. The factor conditions, such as human capital, tangible resources and firm infrastructure underpin competitiveness. It was critical to gain internal cultural commitment to sustainability if the Sustainable Living Plan was to meet with positive results. It also required reallocation of resources and organisational structure (in some key value chain-related areas), to ensure the sustainability objectives were achieved by Unilever. The firm also can exploit demand conditions, the concept of ethical consumerism trends, to justify how competitiveness can be successfully achieved through CSR. Related and supporting industries also encompass factors in Porter’s diamond model. These were instrumental in whether Unilever could achieve its CSR goals, such as sustainable procurement and compliance to new environmental objectives. Unilever even recognised the importance of gaining competition engagement and the goals of these companies toward sustainability were critical if Unilever’s new program was to achieve success. Government is also instrumental, especially in foreign procurement situations where sustainability is being introduced, hence Porter’s diamond analysis underpins all factors where Unilever achieved success. The diamond framework illustrates the six different factors that must be considered when engaging in a new CSR initiative as each factor is critical as influence or support for corporate social responsibility. Unilever realised it could leverage its culture that embraces sustainability and use CSR as a form of competitive rivalry in an industry where other competing businesses were not devoting the same commitment and expenditure in positive corporate social responsibility. Efforts to coerce competition, government, suppliers, and internal stakeholders to embrace and engage in more responsible capitalism illustrates how Unilever’s analysis of the entire value chain and industry-related factors showed how the CEO’s various objectives were directly aligned with factor, market and political situations. The social issues that Unilever wished to address, as iterated by Kramer and Porter (2006), regularly intersected Unilever’s business model, and the firm found it created the shared value that the authors iterated are important for a relevant CSR agenda to be developed. Hence, it should be concluded that the Sustainable Living Plan is a form of sustainable competitive advantage. It provides shared value, outcomes meaningful and beneficial to multiple stakeholder groups in international society. It satisfies the ethical consumption behaviours and expectations of the moral consumer, improves waste and over-consumption of expensive and valuable energy sources, and improves the lifestyles of supplier partners involved in various raw product manufacturing. Cost controls achieved through such efforts could also have economic advantages for consumers also when pricing structures do not facilitate inflated product prices. It could even strengthen relationships between corporation and foreign governments that could facilitate more foreign direct investment that has implications for economic stability in a region that impacts consumer education, disposable incomes and available products to enhance lifestyle quality. In every conceivable way, through careful market analysis and industry factors, Unilever can leverage the Sustainable Living Plan as a form of difficult-to-imitate competitive advantage. It gives consumers a higher perception of value related to Unilever’s products over that of competition with less CSR investment and emphasis, which is beneficial for Unilever’s corporate life cycle and profitability opportunities well into the future. References Buckler, S.A. and Zien, K.A. (1996). The spirituality of innovation: learning from stories, The Journal of Product Innovation Management, September. Dowling, G.R. (2006). Communicating corporate reputation through stories, California Management Review, 49(1), pp.82-99. General Motors. (2012). GM reaches century mark in land-fill free facilities. [online] Available at:http://media.gm.com/media/us/en/gm/news.detail.html/content/Pages/news/us/en/2012/Jun/0619_landfill_free.html (accessed 1 May 2015). General Motors. (2012). Second GM facility receives energy star certification. [online] Available at:http://media.gm.com/media/us/en/gm/news.detail.html/content/Pages/news/us/en/2012/Jun/0619_energystar.html (accessed 1 May 2015). 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