Although corporate social responsibility (“CSR”) has been adopted by many companies, few of them are practicing it with any formal strategy, and that the common situation has been a portfolio of disparate CSR programs and initiatives some of which supported core strategy and others of which appeared adjacent and discretionary. The challenge for companies is to find a way to forge a coherent strategy that is can accommodate the broad range of CSR activities including corporate funding of community activities, grants for nonprofits/NGOs, environmental sustainability programs to reduce energy and resource use, “cause” marketing and comprehensive system-level efforts to remake a business’s entire value chain.
In order to understand how to formulate and execute a strategy for CSR and sustainability, it is necessary to have a foundation in the art and science of strategic planning generally. Strategic planning is a process of carefully and thoughtfully aligning the strengths of a company’s business to the opportunities that are available to the company in its chosen business environment. While strategic planning is much debated and remain imprecise in many ways, it is generally believed that in order for the planning process to be effective on a consistent basis the managers of the company must collect, screen and analyze information about the company’s business environment, identify and evaluate the strengths and weaknesses of the company and develop a clear mission for the company and a set of achievable goals and objectives that then become the basis for tactical and operational plans. Strategic planning is an important and essential process for every company regardless of the size of its business and the time and other resources that the company has available to invest in the developing, documenting, implementing and monitoring a strategic plan. The business environment and relevant technologies are constantly changing and new risks and uncertainties will surface on a regular basis.
It is not uncommon for larger companies to employ teams of experts in a dedicated strategic planning unit to work full-time on the planning process and to solicit input from hundreds or thousands of managers throughout the organization. For smaller companies, however, the process is necessarily more informal and compressed and may even be as simple as the founder or chief executive officer sitting down with a handful of key employees to solicit their opinions on where the company should go over the planning period and what investments will need to be made in order to achieve the mutually recognized goals and objectives. Regardless of the context, a variety of factors determine the planning practices that may be adopted by a particular company including environmental conditions, which include both the “specific environment” (i.e., the forces, such as stakeholders, that can be expected to have a direct impact on the ability of the specific company to obtain the scarce resources required for the company to create value for its owners and other stakeholders); and the “general environment (i.e., the forces that typically will have an impact on the shape and design of all companies, including the company and other companies that are part of the stakeholder network of the company (e.g., economic, technological, political, demographic and socio-cultural forces)); organizational size, complexity and age; the nature of the business engaged in by the firm, top management values and styles; organizational culture; and the initial trigger for commencement of formal planning.
Two of the most challenging environmental conditions that must be addressed by all companies are the growing interest in sustainability and the need to engage with a broad range of stakeholders beyond the owners of the business (i.e., suppliers, distributors, employees, unions, special interest groups, governmental agencies and competitors). These emerging conditions have not made strategic planning any easier given that they expand the levels of unpredictability and risk in any company’s environment and the response has been the development of a new discipline: strategic planning for sustainability. Strategic planning for sustainability recognizes that businesses operate in a world where every participant, large and small, has an obligation to act in a manner that addresses and reasonably satisfies their current goals and needs while not compromising the ability of future generations to meet their own goals and needs. Traditionally companies acted primarily out of self-interest and the need and desire to deliver profits, as quickly as possible, to their shareholders. It is certainly true that enterprises need to generate sufficient return on their investments in order to survive and continue to provide jobs and produce goods and services that are sought by customers; however, companies cannot continue to focus simply on financial and physical capital and ignore the adverse long-term impact that their operations may have on natural and human resources.
Strategic planning for sustainability is far from easy or precise, if only because it requires that simultaneous consideration be given not only to economic performance and development but also to environmental protection and the social wellbeing of employees and other persons and groups outside of the organization. Companies and their managers are struggling to find and deploy the tools and practices that are necessary for balancing and reconciling the “triple bottom line” of profits, planet and people. Clearly a company cannot contribute to sustainability development on a long-term basis unless it remains “in business” and this often means taking actions thought necessary for financial survival at the expense of other actions that would be environmentally or socially preferable. Even when businesses clearly understand that respecting the environment and society are necessary it may take time for them to make the necessary changes in their operational activities and it is not always possible for companies to avoid actions that might cause short-term environmental or social harm. In those situations, however, companies need to take responsibility for their actions and remediate the damage, such as by committing to build new skills and find meaningful employment for workers laid off as part of a downsizing of operations in a specific community. Another challenge is that the empirical data that manages are used to having for their financial analysis is not as readily available for environmental and societal issues and the information that does exist is continuously changing, often technically ambiguous and subject to competing interpretations that not only make internal decision making more difficult but also muddle the regulatory environment in which businesses must operate.
Chapters or Articles in Books
Government and Other Public Domain Publications