Strategy and Transformation Portfolio - Coursework Example

Strategy and Transformation Portfolio BUSI1410 Dr. Young-Chan Kim ID: 000808012 Contents Contents 2 Introduction 3 The Chamberlain’s theory ofStrategy 4 Case study The Body Shop 6 Case Study Nestle 9 Conclusion 10 Reference List 11 Introduction Over the years, organisations have continually engaged in activities that aim at improving their position and competitiveness in the market. They have been taking more considerations towards the wellbeing of the community as well as trying to improve their business models. This paper entails a study on strategic Corporate Social Responsibility (CSR). In this regard, organizations have the obligation of considering their customers’ interests as well as the interest of other stakeholders including shareholders, communities, and employees among others. For a better illustration of this aspect, the Chamberlain’s Theory of Strategy is discussed. It is imperative to understand the balance between taking advantage of the available opportunities and self-regulation towards the attainment of ethical standards when dealing with society as a vital business strategy (Bhattacharya, Sen and Korschun 2008). Corporate social responsibility needs to be more than a public relations exercise. It should not be related to communication and marketing. The process of integrating these strategies into CSR aspects makes it easier to deal with pertinent issues, which allow the companies to benefit from the use of their resources to grow their markets. Companies should use their CSR abilities to boost their business opportunities and bolster unique interventions for society as a whole (Korschun, Bhattacharya and Swain 2014). Integrating CSR into corporate strategy is essential if the company has to work on meeting its goals within the requested timeframe. The key thing is to determine the drive behind the integration of the CSR initiative into the business strategy (Rosenzweig, 2010). However, the reformulations of the mission, vision and values that will drive the employees towards this achievement are imperative. The only way of doing this is by allocation of responsibilities that will see the CSR initiative integrated into the strategic aspect of the company. If companies do this, they will have a unique way of showing the employees that the company is serious about making such an investment (Shumate and OConner 2010). The initiation of CSR integrations into the corporate strategy will require a design strategy that works on meeting the objectives outlined in the mission and vision. However, some companies do not understand that the designs in use will be based on making appropriate use of the resources available (Shumate and OConner 2010). It is significant that the company identifies a strategic issue that will be compatible when linked to the initiative. Issues will arise and will be of major concern to all stakeholders and shareholders. Many companies dealing with such issues set performance key indicators to determine the efficacy of the designs used in the implementation of CSR activities. One of the best ways of handling this is by using rankings as a way of measuring the impact CSR has had on the company and society (Albareda, Lozano and Ysa, 2007). If the lives of people have changed, the rankings will show that the company has improved its performance in the industry based on consumer reviews and client numbers. It is advisable to also limit but not exclude sponsorships and public donations. Although the use of performance indicators could derail some projects because they seem to perform less than expected, they are good avenues of providing room for more creativity and innovation when dealing with CSR activities (Banerjee 2008). The Chamberlain’s theory of Strategy This theory can be perfect in explaining strategic CSR. The theory is analysed based on the combination of four specific factors. These factors are factor 1, factor, 2, factor 3, and factor 4. Factor has various propositions in that an organization’s strategy has to operate within a bounded domain; has a single and coherent focus; consists of basic directions as well as a broad path; and could be deconstructed to elements. Every component of the strategy’s path is a coherent concept that directly addresses basic direction delivery. The essential thrusts of a strategy usually imply a given influence channel. Besides, the constituent elements of a strategy are formed deliberately or they could come out emergently. Factor 2 provides the forces that shape the organization strategy. These forces include internal forces, external forces, and shareholders. The tragic CSR should thus consider these forces. Factor 3 on the other hand focuses on the process of forming a strategy within organizations (Chamberlain, 2010). The process of forming strategies is based on factor 1 and factor 2, which specifies the different processes, which could be applied in the formation of a given strategy. Factor 4, the last factor, presents the mechanisms through which a given strategy could take effect (Mintzberg, 1990). While factor 1 seems to divide the environment of an entity into three major categories, there are two main types of the ways in which an organization can influence the environmental areas. One of these types is the rational approach, which consists of standard economic forces. The second type of influence, on the other hand, entails the social approach, which in this case considered some of the key aspects of Corporate Social Responsibility (Mintzberg, 1990). In this regard, an organization has to use this social approach as an influence technique by considering a combination of various forces such economic and psychological forces regarding its stakeholders (Chamberlain, 2010). The strategic theory is typically applicable in all organization strategies, which implies that it is applicable in CSR. The theory has been widely applied in various organizations despite their nature and sizes. It has been used in business, religion, military, non-profit organizations, social clubs, unions, administrative branch of government, and in political institutions. Similarly, it has been highly applicable among individual people (Mintzberg, 1990). Nevertheless, the Chamberlain theory of strategy has been associated with some significant limitations. Today, the empirical validation of the theory has been limited to only a few organizations. The formation of the theory in 2010 has therefore not allowed adequate time to proof its applicability (Mintzberg, 1990). However, in all the organization where the theory has been applied, desirable results have been achieved. Although a large number of organization are required to enhance its validation, it can be ascertained that the Chamberlain’s theory would definitely work effectively in strategic CSR. For any organization to have effective strategic CSR, the management needs to have a team of strategist managers. Such managers would be able to make and initiate the organization’s strategic decisions regarding the stipulated strategy (Mintzberg, 1990). Case study The Body Shop “In terms of power and influence, you can forget the church, forget politics. There is no more powerful institution in society than business - I believe it is now more important than ever before for business to assume a moral leadership. The business of business should not be about money, it should be about responsibility. It should be about public good, not private greed.” Dame Anita Roddick, founder of The Body Shop, in her book Business as Unusual, in 2000. A good example of a company that benefited from a sound CSR policy is Body Shop. Anita set up the company in 1976 and soon after realised great potential of selling products with natural ingredients such as jojoba oil and rhassoul mud. Anita Roddick gave her clients an alternative and ended up introducing a new business paradigm for the cosmetic industry (Beck-Dudley, 1999). Company’s loyal clients grew fast as they enjoyed naturally developed products which found to be less damaging to their skins. Company’s sales grew at a rate of 50% per year and soon it became a public limited company (PLC) in UK. When the company set up a trade fair program over two decades ago, no one knew that it would be a venture that would cement their position in various markets such as the US and Japan. It gave the company a good image and after its £652 million worth acquisition by L’Oreal, the company continued to make more than £40 million in profits. It is important to understand that linking the CSR issues to value chain activities and the external environment is essential. The company was able to gain more opportunities allowing the use of its resources to benefit society. This will allow the organisations to collaborate on the available knowledge so as to maximise on the same. Body Shop was able to expand its knowledge and included all its stakeholders, peers and the shareholders in the actualisation of the CSR activities (The Body Shop, 2013). The most important part of all these attributes for the company was to allow the implementation of the communication design. Body Shop was able to use the available communication methods to ensure that the allocation of responsibilities to all the present business units took place. Critically, this allows for the creation of general awareness and ensures the employees own the strategy as part of their work. It has been said to work best as a motivational tool that attracts more clients in such events (The Body Shop, 2013). This has seen the company grow its revenue and increase its presence in the market through the L’Oreal marketing platform. Typically, the basic idea was based on the founders’ entrepreneurial experiences. Such experiences taught them that a person, especially a business person, makes a mistake, the individual should be ready to face the resulting facts about the respective mistake. The individual then needs to act immediately and take the necessary steps in order to change course and avoid similar mistakes in the future. In this regard, the founders of Body Shop, had started with three year of running a hotel and a restaurant. But after various considerations based on strategic plans, they saw it fit to quit this type of business. They had to quickly think of another business. However, the based way to reach a meaningful solution to their problem regarding the type of business was to look at their immediate society and determine a problem facing the community. Strategic Corporate Social Responsibility however had to be ensured in whatever business they had to invest. Thus had to do a lot of research to determine such problems, their solutions, and the way forward to generating a solution while making profits, but without adverse effect to the society (The Body Shop, 2013). Through the application of strategic CSR, the founder of Body Shop made significant consideration and involvement of her customers and other stakeholders. Through her travelling experiences, she had gained a significant wealth of experience. Her idea of incorporating the society and community and considering their demands and needs is attributed to the time she spend in farming and fishing. She did all these activities with pre-industrial individuals, whereby she was largely exposed to the body rituals of women mainly from various parts of the world. Through the utilization of such responsibility, she could make use of her past experience and remembered seeing various women making use of things that were made of plants as well as from fruits. She had notes that such things did a great job in cleaning the human skin among such women even better than the products she used to buy back at home (The Body Shop, 2013). At that time all the skin care products were seemingly expensive and further, working with natural ingredients was hardly a common practice. She thus saw the need to come up with the idea of taking the responsibility of the society by trying as much as possible to solve the prevailing problem. She thus decided to emerge as the first individual to focus on solving such problems despite the associated business risks. In her strategic CSR, she was guided by her past experience in running a hotel and managing a restaurant. Through such experiences, she was certain that even if the idea would not work at first, she would do everything possible to make it work. She this started by opening a small shop and filled it with cosmetics that were specifically made from natural ingredients. Through such ideas, she finally actualized her dream. She worked very hard towards her dream until she saw the foundation of the Body Shop environment. Her basic idea was born out of observation and past experience. She knew how to actualize her concepts and views towards the society. From her motive to create better skin products was generated from what seemed to be impossible at home, but her motivation was based on what she had seen from elsewhere around the world (The Body Shop, 2013). She only need to work hard and convince the society that the products she had created where for their own good. She had to convince her customers that the products were the best. Case Study Nestle Another such company that utilised CSR as a competitive advantage is Nestle. When Nestle started its’ operation in Moga district in India in 1962, living condition of the farmers in the region were very poorly (Porter & Kramer, 2006). Most of the habitants were without electricity or even medical care. Nestle assessed very early that in order for company to be competitive it will need to transform its value chain in Moga, which could create benefits for the local farmer and company itself. Nestle started supporting local formers by sending animal nutritionists, agronomists and quality assurance experts with its milk collection vehicles. These experts educated local farmers and showed them ways to cure for their animals which in return could increase productivity. These small initiatives started yielding as not only the productivity of milk increases but farmers were able to set up their own factories which started to develop the whole industry. Region as whole was transformed and living condition of farmers increased tremendously compare to other regions. Nestle’s commitment to work with small farmers is core to its strategy. Companies suppliers have seen tangible benefits and from the network of 150 farmers has grown to nearly 75000. Company social initiative helped to obtain stable supply of milk and other commodities (Kramer, 2006). Conclusion In conclusion, corporation may not be the cause of all societal problems but if they work collectively to develop CSR policies then there could be a way to solve these problems (Porter & Kramer, 2006). Several businesses have begun using this as a platform for the engagement of CSR activities into their strategic aspects. This has made it easier to understand the goals of the organisation based on what they do regarding their involvement in CSR activities. However, companies have to play a huge role in ensuring that they review their interactions with the society and make it easier to inculcate what they have observed within the society into their strategic outlines. Reference List Albareda, L., Lozano, J.M. & Ysa, T. (2007) "Public Policies on Corporate Social Responsibility: The Role of Governments in Europe", Journal of Business Ethics vol. 74 no. 4, pp. 391-5. Banerjee, S.B. (2008) "Corporate Social Responsibility: The Good, the Bad and the Ugly", Critical Sociology vol. 34, no. 1, pp. 51–75. Beck-Dudley, C. L. H. a. C. L., 1999. Marketing Strategies and the Search for Virtue. A Case Analysis of The Body Shop International, 20(3), pp. 249-263. Bhattacharya, C.B., Sen, S. & Korschun, D. (2008) "Using Corporate Social Responsibility to Win the War for Talent", MIT Sloan Management Review, vol. 49 no. 2, pp. 37–44. Korschun, D., Bhattacharya, C.B. & Swain, S.D. (2014) "Corporate Social Responsibility, Customer Orientation, and the Job Performance of Frontline Employees", Journal of Marketing vol. 78, no. 3: pp. 20-3. Kramer, M. Porter, M. (2006) Strategy and Society. The Link Between Competitive Advantage and Corporate Social Responsibility, p.12 Mintzberg, H., 1990. The Design School: Reconsidering the basic premises of strategy formation. Strategic Management Journal, 11(3), pp. 171-196. Rosenzweig, P.2010. Robert S. McNamara And the Evolution of Modern Competitive Advantage. Lessons from one of the most controversial Managers in Modern History, p.87 Shumate, M. & OConner, A. (2010) "The symbiotic sustainability model: Conceptualising NGO-corporate alliance communication", Journal of Communication, vol. 60, no. 3, pp. 577–609. The Body Shop, 2013. Our values. [Online] Available at: http://www.thebodyshop.co.uk/values/index.aspx [Accessed 30 Jan 2015]. Read More