Strategic Thinking and Corporate Social Responsibility - Term Paper Example

Strategic Thinking and CSR Strategic Thinking and CSR Goes Here al Affiliation Goes Here This paper explores therelationship between strategic thinking and CSR. Strategic thinking will be defined and the addition of CSR to strategic thinking and its affects on business and community will be explored. Examples of businesses successfully employing CSR, and those that don't will be presented. Businesses' responsibility to the community they operate in will also be explored. Strategic thinking and csr Strategic Thinking A business that employs strategic thinking is searching for opportunities to add value and provide a positive direction for the company. Strategic thinking is most successful when it is used to encourage dialogue between major players in the business. Strategic thinking gives leaders an opportunity to explore different ways of doing business that add value to the company. Strategic thinking requires thinking 'outside the box' and considering non-traditional ways of doing business. According to the Centre for Applied Research strategic thinking includes exploring the following: Competencies and skills Products and Offerings Environment and Industry Markets and Customers Competitors and Substitutes Suppliers and Buyers Strategic Thinking is a process that requires the leadership in a business to align its strategies with its goals. According to the Centre for Applied Research the process also requires being: Goal oriented Fact-based Based on Broad Thinking Focused Agreed Upon Engaging Adapting Implementable Corporate Social Responsibility Corporate Social Responsibility (CSR) requires adding a key element to Strategic Thinking. CSR requires the business to look at the realm of social responsibility. CSR is the integration of a business into society. This integration requires that the company take a look at its 'neighbourhood' and create and maintain a relationship that benefits both society and the business. The business has to look for opportunities to be a good citizen. CSR is all about building positive relationships within the community. These positive relationships can take the form of relationships with universities, ethical research, product safety, recycling, education and job training, safe working conditions, etc(HBR, 2006) An example of Corporate Social Responsibility is Malden Mills. On December 11 of 1995 a factory in Massachusetts burned to the ground. Malden Mills employed about 3000 people from the local community and when the mill burnt down many thought their jobs were gone as well. Aaron Feuerstein was the owner of Malden Mills at the time and was faced with a monumental decision. What next Most would try to recoup costs and leave the community with 3000 unemployed people. Feuerstein chose the unthinkable route of keeping all 3000 people on the payroll while the mill was rebuilt. Aaron Feuerstein answered the 'why' question by replying "The fundamental difference is that I consider our workers an asset, not an expense."(Boulay, 1996) Feuerstein considered his investment in human capital as his most important investment. He was quoted as saying "I have a responsibility to the worker, both blue collar and white collar. I have an equal responsibility to the community. It would have been unconscionable to put 3,000 people on the streets and deliver a death blow to the cities of Lawrence and Methuen. Maybe on paper our company is worth less to Wall Street, but I can tell you its worth more. We're doing fine.'"(Boulay, 1996). It is clear that Feuerstein felt that it was Malden Mill's corporate responsibility to care for its human capital as well as its structural capital (the mill). Feuerstein kept his 3000 employees on the payroll with full benefits for three months while the factory was rebuilt. A business that does not position itself as a contributing member of a community stands to lose in the long run. An example of a company not being socially responsible would be a food store in a small community. This particular store was sold to a large Chain Store. The store is the only large food store in the community and the primary users of the store are the elderly on fixed incomes that can no longer drive 30 miles to the south to another town to do their shopping. After the sale the new store raised its prices so much so that most of its products were not affordable. Still, being not able to drive long distances, the elderly continued to frequent the new store. The workers at the new store also lost all benefits that the previous owner had provided. The new store's strategies backfired. The community development committee worked with a food store chain to help them open another grocery store in the small town. With the arrival of the other store, the store that overpriced its merchandise lost a considerable amount of business and basically shut down. Most of these workers were hired by the new store in the community. The new store provides benefits, and has positioned itself as a participant in the community and a sponsor of local events. The new store has become a contributing member of the community. The community has pushed the old store out of business and out of the town. Strategic Thinking and Corporate Social Responsibility are vital to a business's success. Partnerships with local communities help keep a workforce and the community happy. Businesses should position themselves as members of the community contributing to the success of the community. Businesses can remain profitable while employing CSR strategies. For a business to successfully integrate CSR into its business model it needs to be understood that CSR is not an added responsibility but a part of the overall business strategy and thus should be part of Strategic Thinking. Businesses need to "consider the economic, social, and the environmental impact they have on their communities"(Timms, 2003). An example of a good CSR strategy is when a business moves into a community and develops relationships with schools and colleges to help them provide a ready workforce. The community in turn provides a ready workforce for the business. This mutual dependence requires that a good relationship be maintained between the business and the community. Also, the business would benefit from having a strong relationship with local employment agencies that can refer qualified individuals from the local community to work at the business. Businesses that don't invest in CSR (having a poor relationship) stand the chance of being driven out of the community as in the example given above. Corporate Social Responsibility is really nothing new. It is a throwback to the days when your boss gave you a honeyed ham at Easter and a yearly bonus check at Christmas. As businesses grew larger the personal touches that the 'boss' added to the employee's benefits went away. Today's businesses have learned that they need to be a contributing member of the community in order to survive. They need to rediscover what small business owners have known all along: that employees need to feel valued and communities depend upon businesses to provide income for its residents. Business owners need to be good citizens by not polluting their community, caring about the community's natural resources, and caring about the community as a whole. Despite the studies that promote Corporate Social Responsibility (CSR), many businesses have not chosen to use applied management practices that address CSR. They reason that "it would take time to train and retrain management."(Commission of the European Communities, 2001). Conclusion Corporate Social Responsibility (CSR) is a critical component of Strategic Thinking. Businesses that have incorporated CSR into their management strategy need to consider internal and external factors. Internal factors are human resource management, health and safety at work, adaptation to change, and management of environmental impacts and natural resources. External factors to be considered are local communities, schools, employment agencies and any other of the community's resources that benefit the business. According to the commission of the European Communities these factors are vital to the successful implementation of CSR in a business and community. Corporate Social Responsibility is a throwback to the days of small business when employers would pay attention to the employee's need to feel valued. Corporate business might benefit from the study of how small businesses treat their employees (that ham and Christmas bonus). An investment in human capital and positive relationships with local communities (Malden Mills example) can be an integral part of successful Strategic Thinking and implementation. References American Psychological Association (2001). Publication manual of the American Psychological Association (5th ed.). Washington, DC: American Psychological Association. Boulay, Art. (1996). Quality Monitor Newsletter. Leadership Focus, Malden Mills-A Study in Leadership. Retrieved 2007-4-20 From www.opi-inc.com/malden.htm Center for Applied Research. (2001). CFAR, Briefing Notes: What is Strategic Thinking. Retrieved 2007-4-20 From www.cfar.com Commission of the European Communities. (2001). Green Paper. Promoting a European Framework for Corporate Social Responsibility. Retrieved 2007-4-20 From < http://64.233.167.104/searchq=cache:CQYZFMueq20J:portal.etsi.org/public-interest/Documents/policy%2520documents/SocialResponsibility/com2001_366.pdf+examples+of+corporate+social+relationships+CSR&hl=en&ct=clnk&cd=2&gl=us> Harvard Business Review. (2006). Strategy and Society-HBR Spotlight. Retrieved 2007-4-20 From www.HBR.org Timms, Stephen. (2003). The Communication Initiative. Strategic Thinking. CSR (Corporate Social Responsibility) Can Benefit More Than Just Business. Retrieved 2007-4-20 From www.comminit/StrategicThinking/st2003/thinking-137.html Read More