Aligning business strategy and corporate citizenship

Companies are waking up to the notion that alignment between strategy and corporate citizenship (CC) is the way to create sustainable value for both business and society.

The work undertaken by the Global Leadership Network (GLN), a group initially formed by 10 of the world’s leading corporations and now inviting additional corporations to join, shows that there is a strong desire to more fully understand how to achieve this alignment. That the network has already doubled in size over the past three months indicates recognition that business strategy and CC need to be aligned.

As Michelle Dow points out in her article (Briefing February/March), companies in the GLN recognise the need to be more proactive in their CC, or as one member of the network explains it: “play corporate citizenship offense as opposed to defense.” Playing offense entails considering corporate impacts on society in the design of business strategy, and taking leadership to address social and environmental issues. Playing offense also requires robust operational mechanisms to put innovative strategies into practice.

No GLN company would make any meaningful progress towards CC excellence without engaging and learning from its stakeholders. In fact, the management framework places this idea of ‘engaged learning’ at the centre of the three other elements of CC excellence: leadership, business strategy and operational excellence. For the GLN, excellent companies are those that view stakeholders as a critical constituency to drive learning that influences business processes, products and strategy. Furthermore, from GLN’s perspective, CC leadership goes beyond listening to stakeholders to encouraging collaboration to jointly address major issues more effectively, especially in those areas where the company is uniquely positioned to play a key role.

Michelle encourages the GLN to ask companies to think clearly about their motivations for CC activities. In fact, the way GLN companies think about these is captured in the GLN’s online CC assessment and planning tool. Among other things, the tool enables a company to systematically assess the potential impacts of its CC activities on its business priorities and on society. It also enables a company to benchmark these potential impacts against the potential impacts of other companies, thus enabling it to prioritise activities where the benefits of its contribution can be maximized and identify those issues which may be more effectively addressed by others. GLN companies that use the tool are therefore motivated by a wish to maximise the contribution of business as a whole to society.

Michelle’s question may be best answered if we go beyond asking for the motivation for CC activities, and consider the relationship between a company’s core business model, products and services, and broader societal development. This should not be viewed as a simple reformulation of the argument concerning the business case for CC. Instead, it asks companies to think about how it can leverage its unique abilities, its knowledge, products and services, for the benefit of stakeholders and shareholders alike. As Michelle points out there are various CC activities which companies have in place that are worthwhile and indeed necessary despite having a limited link to business strategy. However, one should also bear in mind that it is a company’s responsibility to use its limited resources as efficiently as possible. When long-term shareholder interests and the company’s potential benefits to society simultaneously inform the business’ core strategy and activities, then these benefits can really be brought to scale and become sustainable. The GLN is helping to make this happen.

BRIEFING WELCOMES RESPONSE AND FEEDBACK FROM READERS.

EMAIL EDITOR@CORPORATE-CITIZENSHIP.CO.UK

Thomas Krick, associate manager of the GLN and senior manager at AccountAbility.
Thomas is a recognised practitioner with more than four years of applied experience as a researcher and consultant in the field of corporate responsibility and societal development, having previously worked with Next Step Consulting and Germany’s leading corporate responsibility think-tank the imug-Institute.Thomas is currently responsible for managing and developing the Global Accountability Rating 2006, as well as the country specific ratings in Russia, South Africa and related research in China. Contact thomas.krick@accountability.org.uk

Guy Morgan, research project manager, The Center for Corporate Citizenship at Boston College
Guy is a researcher for the GLN He also is the project manager for the In Focus report series, designed to highlight important issues in the field of corporate citizenship. morgangu@bc.edu