by William H. Marquard and Ann B. Graham
At the beginning, the author objected the conventional wisdom of viewing corporate social responsibility (CSR) issues as a burden—a necessary cost of doing business in a multi-stakeholder environment. People generally view increasing shareholder value and serving the needs of society’s stakeholders as mutually exclusive: the Great OR of business.
By citing Peter Drucker’s statement of “Every single social and global issue of our day is a business opportunity in disguise.” the author argues that Finding the AND transforms corporate social responsibilities into corporate social opportunities and converts those opportunities into sustainable profits and competitive advantage.
The author uses outside-in and inside-out approaches to apply the Finding the AND lens as a constraint which can play in achieving breakthrough innovation and growth.
“How can we satisfy that business need AND serve a social good?”
“How can we serve that social need AND increase shareholder value?”
The example of the village of Santa Cruz Baja Verapaz and Walmart shows that Walmart increased sales and reduced logistics costs AND the villagers benefit by earning a fair return on their labor and increasing their income to raise themselves out of poverty.
Thus, the author concluded that we should view “societal stakeholders” such as environmental NGOs and local communities as potential business partners rather than as illegitimate adversaries.
The author introduced the AND Vantage Model and the efficient CSR frontier to explain the Method and Measurement of Finding the AND. Companies that want to apply Finding the AND principles in order to drive sustainable competitive advantage can often fund such efforts by identifying existing, non-value-added compliance and forced expenditures and redirecting them toward more strategic investments.
By giving four examples of companies Finding the AND, the author emphasized the benefit of Finding the AND: companies are able to achieve competitive advantage which includes Market Development, Product Innovation, Operational Efficiency, and Culture Building. It is important to rebalance the existing portfolios of CSR investment by keeping, refocusing, or eliminating each initiative on the basis of (i) its classification as compliance, strategic, or forced, and (ii) its linkage to the four sources for creating shareholder value.
The entry point for Finding the AND should be tailored to the unique needs and culture of the company by focusing its CSR strategy on a specific mission. And an effective, focused strategic plan enables a leadership team to say “no” to otherwise worthwhile ideas because they do not fit the direction of the firm. Each company can identify the particular set of societal problems that it is best equipped to help resolve and from which it can gain the greatest competitive benefit.
“We have come to a point now where this agenda of sustainability and corporate responsibility is not only central to business strategy but will increasingly become a critical driver of business growth…how well and how quickly businesses respond to this agenda will determine which companies succeed and which will fail in the next few decades.”
By citing the statement of Patrick Cescau, the author concluded that sustainable shareholder value derives from managing these complicated trade-offs in a way that enables the firm to endure and grow. And Finding the AND does this by measuring stakeholder and shareholder interests on one scorecard: sustainable profits and sustainable shareholder value.
From the line of reasoning of this article, we can easily derive a conclusion that the firms that transform corporate social responsibilities into opportunities and convert those opportunities into sustainable competitive advantage will be the winners as businesses and individuals emerge from the malaise of this global recession and begin to seek viable opportunities for growth.
Xin Li
I can't believe how irresponsible these companies can be.
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