HOCHIMINH CITY OPEN UNIVERSITY

CORPORATE SOCIAL
RESPONSIBILTY

VÂN THỊ HỒNG LOAN

M A , D r, U n i S A

Head
School of Advanced Study
HCMCOU

CHAPTER 2

Strategy + CSR:
a stakeholders
perspective

BY DR VAN THI HONG LOAN

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CONTENTS

•  What is strategy
•  Competing strategy perspectives
•  The resources perspective
•  The industry perspective
•  A stakeholder perspective
•  Prioritizing stakeholders
•  The integration of strategy and CSR
•  Strategic CSR

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Concepts

•  Vision
•  Mission
•  Strategy
•  Tactics

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DISCUSSION

•  What means vision, mission?

•  How is Strategy different with Tactics?
•  What is vision, mission by HCMCOU?
and your company (if have)?

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A FIRM’S VISION, MISSION, STRATEGY & TACTICS

•  The vision answers why the organization

exists. It identifies the needs the firm aspires
to solve for others.
•  The mission states what the organization is
going to do to achieve its vision. It addresses
the types of activities the firm seeks to
perform.

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A FIRM’S VISION, MISSION, STRATEGY & TACTICS

•  The strategy determines how the organization

is going to undertake its mission. It sets forth
the ways it will negotiate its competitive
environment in order to attain a sustainable
advantage.
•  The tactics are the day-to-day management
decisions made to implement the firms’
strategy.

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STRATEGY

•  The strategy planning process begins with a

SWOT analysis.
•  Internal: Strength & Weaknesses.
•  External: Opportunities & Threats.
•  The goal of a firm’s strategy: to recognize its
strengths and align them with the
opportunities that are present in the
environment.

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STRATEGY

•  The strategy and tactics remain

consistent with its vision and mission.
•  Strategy: viewed from two competing
perspectives—the resources
perspective and the industry
perspective.

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RESOURCE PERSPECTIVE

•  Internal Strengths & weaknesses

(SWOT)
•  Resources: highly skilled employees,
valuable raw materials, effective
research and development, efficient
production processes,…
•  Firms are able to build and sustain a
competitive advanced over the
competition.
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RESOURCE PERSPECTIVE

•  Limitation:
•  by focusing primarily on the internal
characteristics of the firm, the
resources perspective ignores much of
the context in which the firm operates
•  à this context will influence directly
the firm’s ability to build core
competencies.

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INDUSTRY PERSPECTIVE

•  External Opportunities & Threats

(SWOT)
•  Focus on the firm’s operating
environment (its industry structure) as
the most important determinant of
competitive advantage.
•  5 competitive forces: suppliers, buyers,
new entrants, substitutes, and industry
rivalry.

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INDUSTRY PERSPECTIVE
Limitations:
• Not consider resource is an advance
• Consider 3 kinds of stakeholders:
suppliers, customers, competitors ->
lack of community, government,..
• Not recognize the characteristics of
different companies à predictive of
their ability to thrive in an given
environment.

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A STAKEHOLDER PERSPECTIVE
•  Environment changes à different
expectation by stakeholders à satisfy
stakeholders à conduct CSR
• à Perspective: integration of CSR and
firm’s strategy à respond to the dominant
trends in society today/satisfy stakeholder
expectation
à ever-increasing expectations to attend to
social goals beyond profit maximization.

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Stakeholder
•  Stakeholders in an organization are the
individual and groups who are depending on
the firm in orders to achieve their personal
goals and on whom the firm is depending for
its existence (by Eric Rhenman).
•  A stakeholder in an organization is (by
definition) any group or individual who can
affect or is affected by the achievement of
the organizations’ s objectives (by R.
Edward Freeman)

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Stakeholder

•  The stakeholders in a firm are

individuals and constituencies that
contribute, either voluntarily or
involuntarily, to its wealth-creating
capacity and activities, and who are
therefore its potential beneficiaries
and/or risk bearers (Post, Preston, and
Sachs)

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Stakeholders

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Target stakeholders

•  Priority to satisfy target stakeholders.

•  Customers want lower prices and higher
quality.
•  Employees want higher wages and better
benefits, better working conditions.
•  Suppliers want to give fewer discounts and
want you to pick up more of their products.

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Target stakeholders
•  Communities want more donations
•  Government wants higher taxes
•  Investors want higher dividends and
higher stock prices.
•  ….
•  They always want more…
•  Who need to satisfy first?
•  These enquiries à their interests often
conflict.

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Target stakeholders

•  Set priority, depend:

•  Identify: threats, weaknesses,
importance, highlights.
•  Issues management (public relations)
•  Characteristics of a company.
•  Characteristics of stakeholders
•  Characteristics of national culture.

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4 STEPS TO CHOOSE PRIORITIES

1.  IDENTIFICATION: stakeholders

relating to current & ‘hot’ issues.
2.  ANALYSIS: the nature of issues to
consider how they relate to
companies.
3.  SET PRIORITY: stakeholders, issues
need to solve first.
4.  ACTION: quickly follow the priority.

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STRATEGIC CSR

Strategic CSR is a central of all

activities that create the values
for companies.

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STRATEGIC CSR

-  Is a combination:
-  (1) CSR perspective (based on the
strategy of company)
-  (2) Core Operations
-  (3) Stakeholder Perspective
-  (4) Medium to Long term

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(1) CSR PERSPECTIVE

-  Strategic CSR should consider:

-  Social issues (sometimes, not related
to company)
-  Impact of company to society.
-  Competitive environment around
company.

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CSR PERSPECTIVE

Issue
Envir
Com Issues
Issue onm
pany
Issue ent

Stakeholders Strategic CSR Society

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(2) CORE OPERATIONS

•  Questions:
•  (1) Financial Company needs to pay for
research group to study about climate
changes because the CEO believes this is
important?
•  (2) Oil Company needs to sponsor research
group to study climate changes because this
issue affects its business and the company
wants to find out another business for
renovation?

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(2) CORE OPERATIONS: VISION, MISSION

•  DISCUSSION: Dell Company

•  Offer: a computer recycling program as a part of
its product awareness throughout the lifecycleà
Does this program relate to Dell?
•  Offer: a “Plant a tree for me” program as a way
for consumers to offset greenhouse gas
emissions produced as a result of the
production of their new computer à Does this
program relate to Dell?

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(3) STAKEHOLDER PERSPECTIVE

•  Many stakeholdersà Many

expectations, sometimes conflicts à set
priority
•  In case, 2 groups of stakeholders
request but conflict and emergency à
need to satisfy all of them?
•  However, requirements need to relate to
the company; need to choose the most
important.
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(3) STAKEHOLDER PERSPECTIVE

•  Ex: priority
•  Shareholders want to have more
dividends and employees want
Company to increase their salary. Who
we need to satisfy first?
•  Customers or Shareholders?
•  Suppliers or Shareholders?
•  Community or Shareholders?

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(4) MEDIUM TO LONG TERM

•  Transfer from short-term to medium and long-

term à transfer from resource management
and stakeholders’ interests to medium and
long-term à Company’s activities change in
order to meet the requirements.
•  Hard to do if company does not focus on long-
term
•  Long-term: change priority, ex.: use value of
building; build relationships and trust
(sustainability) with customers, stakeholders.

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(4) MEDIUM TO LONG TERM

•  Questions:
•  Many stakeholders à how to balance and
satisfy stakeholders; which stakeholders need
to satisfy first?
•  If in the same stakeholders (investors)à
different (strategic investors, shareholders,
stock invertors …) à same satisfaction? Who
need to satisfy first?
•  Employees and shareholders, who we need to
satisfy first? Why?

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(4) MEDIUM TO LONG TERM

•  Many stakeholders à balance to satisfy target

stakeholders.
•  In the same kind of stakeholders (investors) à
à satisfy differently depending on their
contribution
•  Priority: long-term contribution
•  Focus on: economic and social values.
•  Ex. Priority: Employees more than
shareholders (Engagement with Company)

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IN BRIEF

•  CSR: conducting all aspects of business

operations in a responsible manner.
•  Strategic CSR is incorporating this perspective
into the strategic planning process of the firm
in ways that maximize social & economic
value.
•  Company: implement its strategic plan and
conduct operations while consider the needs
and concerns of a broad array of stakeholders.
•  Do not look benefits in a short term.

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