Business Engagement in Social & Economic Inclusion Research

Funded and Sponsored By:

Full Report

A Strategic Management Approach To Corporate Social Responsibility

The report recommends that companies should adopt a strategic management approach to corporate social responsibility. Just as best-in-class/best practitioner companies take a strategic management approach to their long term growth and profitability, the report recommends that companies should include long term corporate social responsibility goals, which identify the social development objectives of the company, within their overall long term strategic planning and management framework. 

As outlined in the report, one possible option for this strategic approach to corporate social responsibility is for a closer strategic alignment and partnering with the company’s chosen NGO organizations, much in the same strategic manner as a joint venture or the outsourcing to a strategic partner of a company operational function.  [For example, the outsourcing of the accounting or information technology functions to a second party best practices firm which can provide a higher performance of the required service, usually at a lower total cost, due to their focus on that particular core competency and the position of excellence they have built.]

The key to the creative insight into a strategic management approach to corporate social responsibility is that, in many ways, the NGO organization would be viewed by the company – that is from the company’s perspective – as a strategic service provider in the delivery of the company’s corporate social responsibility goals and objectives.  This is very different from the currently accepted view or understanding of charitable giving, where the NGO only fulfills an implementation/execution role in the company’s strategy for charitable giving.

In a strategic management approach to corporate social responsibility, the NGO moves from the level of simply a non-strategic recipient of corporate spending in other words at the level of plan execution/implementation from the company’s’ perspective – to the level of a strategic partner in other words to a strategy/strategic initiative of the company to achieve the company’s corporate social responsibility goals and objectives. 

This will also fundamentally change the NGO’s traditional perspective or frame of reference where the company only fulfills an execution role in their strategy for fundraising. In this strategic management approach to corporate social responsibility, companies would take on a far more involved and proactive planning and management role with the NGO and fund a strategically significant portion of all the costs of the NGO, including both core administration and programme/project costs, in much the same manner as a business strategic alliance or joint venture with another company.  This opens the door for the company to take on a stakeholder position in the NGO’s strategic management function for the delivery of expected outcomes and results.  This also opens the door for a wide range of creative support by the company, including for example, the secondment of company staff to the NGO to assist the NGO in areas of core competency deficiencies, which is a wide spread and critical issue for many small and medium sized NGOs.  And, of course, the full activity based cost of that secondment would be captured by the company’s new integrated corporate social responsibility accounting and measurement system for the company to determine and report on its real corporate social responsibility spending effort.  This in turn enables the company to have an integrated monitoring and a clear understanding of the differences in their corporate social responsibility footprint in the community.  The company would now be enabled to assess all the dimensions of their corporate social responsibility spending: for voluntary contributions/charitable giving; as compared to spending with charities/NGOs for branded sponsorship and public relations benefits; as compared to the social impact of the company’s operations and investment decisions; as compared to the impact of the company’s HR policies; as compared to the social impact of the company’s procurement decisions [which would also include taking steps to audit and verify their supplier’s corporate social responsibility policies and practices].

In reality a strategic management approach to corporate social responsibility is [or should be] an integral element in the company’s overall strategic management of the organization.  This insight becomes highly evident when a company adopts a balanced scorecard approach to their overall strategic management methodology.

The other benefit of a strategic management approach to corporate social responsibility is that, in order for the company to undertake this approach, it must become better informed on community needs, much in the same manner as it undertakes to be fully informed on the market and competitive conditions for its goods or services.  Taking a strategic management approach to corporate social responsibility requires excellence in the company’s internal reviews and external environmental scanning to assess all the dimensions of the company’s social and environmental impact in the community.