Global Sustainability

Prof. Dr. Gordana Kierans

SZTU Business School
2022/2023 1
 Overview
The Business and Society Relationship
Corporate Social Responsibility
(CSR)
Introduction to the Stakeholder Approach
Sustainability
Corporate Governance
Strategic Management and Corporate
Public Policy
Risk, Issue and Crisis Management
Business Ethics Essentials
Presentations
© 2018 Cengage 2
 Lesson 6
Strategic
Management
and Corporate
Public Policy

© 2018 Cengage 3
The Concept of Corporate Public Policy

© 2018 Cengage 4
 Strategic Management and
Corporate Public Policy
Strategic management -
• Refers to the overall management process
that strives to identify corporate purpose, and
to position a firm to succeed in its market
environment.
Corporate public policy -
• Incorporates sustainability as that part of the
overall strategic management of the
organization that focuses on the
environmental, economic, social, and ethical
stakeholder issues that are embedded in the
decision processes of the firm.
© 2018 Cengage 5
 Relationship of Ethics
to Strategic Management -
• For business ethics to have any meaning
beyond pompous moralizing, it should be
linked to corporate strategy.
• Corporate strategy can be revitalized because
the linkage permits addressing management
issues in ethical terms.
• This linkage can be better understood when
we think about the:
• Four key strategy levels (decisions are made
at several levels)
• Steps in the strategic management process

© 2018 Cengage 6
 Four Key Strategy Levels
Enterprise-level strategy -
• What is the role of the organization in society?
• For what do we stand?
Corporate-level strategy -
• In what business(es) should we be?
Business-level strategy -
• How should we compete in a given business or
industry?
Functional-level strategy -
• How should a firm integrate its various
subfunctional activities and how should these
activities be related to changes taking place in the
diverse subfunctional areas?
© 2018 Cengage 7
The Hierarchy of Strategy Levels

© 2018 Cengage 8
 Emphasis on
Enterprise-Level Strategy
For what do we stand?
• What is the role of our organization in society?
• How do our stakeholders perceive our
organization?
• What principles or values does our
organization represent?
• What obligations do we have to society,
including to the world?
• What are the broad implications for our
current mix of businesses and allocation of
resources?
© 2018 Cengage 9
 Manifestations of
Enterprise-Level Thinking -
• A positive, constructive, sensitive firm
response in a public crisis
• The use of:
• Codes of ethics
• Codes of conduct
• Mission statements
• Values statements
• Vision statements
• Policy-oriented codes and statements

© 2018 Cengage 10
 Social Entrepreneurship -
• Social entrepreneurship has as its reason for
being a mission of societal value creation.
• The creation of wealth is a means to achieve
the goal of creating societal value.
• Social entrepreneurship’s central focus is the
alleviation of poverty, but it may address a
range of societal goals, including education,
the environment, and the arts.
• The bottom-of-the-pyramid (BOP) is a term
used to characterize the largest and poorest
socioeconomic group of people, those who
live on less than $2/day.

© 2018 Cengage 11
 The Benefit Corporation-
• Unlike the traditional corporation, the Benefit
Corporation has a broader mission that
includes having a positive impact on society.
• The societal mission does not take a backseat
to shareholder wealth maximization.
• The Benefit Corporation offers managers,
investors and customers the opportunity to
participate in or patronize businesses that
promise to make social responsibility an
important goal.
• 31 states now have laws permitting companies
to incorporate as Benefit Corporations.

© 2018 Cengage 12
The Importance of Core Values
Core Values -
• Are the deeply ingrained principles that
guide all of a company’s actions and
decisions.
• Serve as cultural cornerstones.
• Having a set of core values that are not
followed will do no good.
• To be effective, firms need to weave core
values into everything they do.
• If a firm’s core values are not upheld, they
become hollow, and do more harm than
good.
© 2018 Cengage 13
 Other Manifestations of
Enterprise-Level Thinking -
Establishment of public-policy committees -
• Sustainability
• Ethics
• Corporate philanthropy, etc.
Establishment of a public affairs office -
• Included in strategic decision-making
Identification of social or public issues –
• Integrated into strategic management processes

© 2018 Cengage 14
 The Strategic Management
Process-
1. Goal formulation
2. Strategy formulation
3. Strategy evaluation
4. Strategy implementation
5. Strategic control
6. Environmental analysis

© 2018 Cengage 15
Strategic Management Process and
Corporate Public Policy

© 2018 Cengage 16
Components of Strategy Formulation

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 Strategic
Corporate Social Responsibility (1 of 2)
CSR & Competitive Advantage -
• 3 ways corporations intersect with society:
• Generic social issues (firm’s operations do not
affect society and issue is not material to
firm’s long-term competitiveness)
• Value chain social impacts (a firm’s normal
operations significantly affect society)
• Social dimensions of competitive context
(social issues affect the underlying drivers of a
firm’s competitiveness)
• These categories divide into 2 modes of
corporate involvement:
© 2018 Cengage 18
 Strategic
Corporate Social Responsibility (2 of 2)
Responsive CSR
• Addresses generic social impacts through
good corporate citizenship and value chain
social impacts by mitigating harm.
Strategic CSR
• Transforms value chain social impacts into
activities that benefit society while
reinforcing corporate strategy.
• Advances strategic philanthropy that
leverages competitiveness.

© 2018 Cengage 19
 Porter and Kramer Framework
CSR got a boost from the linkage between
competitive advantage and CSR.
• Inside-out linkages – company operations affect
society
• Outside-in linkages – external societal forces
affect companies
Steps to integrate business and society strategically:
1. Identifying the points of intersection
2. Choosing which social issues to address
3. Integrating inside-out and outside-in practices
4. Creating a social dimension to the value
proposition
© 2018 Cengage 20
 Measuring
Sustainable Corporate Performance (1 of 2)
• Achieving sustainability requires performance
accountability.
• When firms measure only financial performance,
environmental and social considerations become
side issues.
• To achieve sustainability, the triple bottom line
must be reflected in every aspect of the firm’s
operation.
• Sustainability reports (integrated reports – IR)
reflect the extent to which the firm is creating
value in the triple bottom line.
• Social Audits, Social Responsibility Reports and
Environmental Impact Reports focus on specific
areas.
© 2018 Cengage 21
 Measuring
Sustainable Corporate Performance (2 of 2)
• Ceres – a nongovernmental (NGO) national
network of investors, environmental organizations,
and other public interest groups working with
companies and investors to address sustainability
challenges and promote sustainability reporting.

• Global Reporting Initiative – Launched by Ceres,

the GRI is a consortium of over 300 global
organizations to tackle the challenge of
standardization of sustainability measures.

© 2018 Cengage 22
 Public Affairs
As a Part of Strategic Management

© 2018 Cengage 23
 The Corporate Public Affairs
Function Today
Public Affairs grew in the U.S. because of:
1. The growing magnitude and impact of
government.
2. The changing nature of the political
system.
3. The recognition by business that it was
being outflanked by interests counter to
its own.
4. The need to be more active in politics
outside traditional community-related
aspects.
© 2018 Cengage 24
 Public Affairs Defined -
The Public Affairs Council (PAC), the leading
organization of executives who do the PA
work of companies, defines PA as:
• “Public affairs represents an organization's
efforts to monitor and manage its business
environment. It combines government
relations, communications, issues
management and corporate citizenship
strategies to influence public policy, build a
strong reputation, and find common ground
with stakeholders.”

© 2018 Cengage 25
 PA’s Place at the Table-
• Public affairs (PA) began from isolated
company initiatives designed to handle
diverse activities, but was sometimes
managed by public relations staffers, but
they are not the same.
• Public relations focuses on selling a
product, while public affairs is designed to
influence public policy.
• PA activities may include lobbying, global
public affairs, social media, corporate
responsibility, campaign finance,
grassroots advocacy, crisis communication,
and more.
© 2018 Cengage 26
 Future of Corporate PA
• If the PA function is to be effective, it must have
influence at the top management level.
• Because of corporate ethical crises, PA specialists
have an ideal opportunity to help transform
business and society relationships. There are 3
primary opportunities:
• Help develop value-based enterprises, and
work cooperatively with them on social issues.
• PA executives can be thought leaders in their
firms, and collaborate with those outside the
firm on current issues.
• Be mindful of global issues, including those
which begin as domestic issues and migrate.

© 2018 Cengage 27
Global Sustainability
Prof. Dr. Gordana Kierans
SZTU Business School
2022/2023 28