June 15, 2013

Charitable contributions, In–house and Collaboration

The most importance decision is to determine which governance structure is the most effective one for the firm, in-house, outsourcing or collaboration. According to Husted & Allen (2011) firstly the company should start with making decision on governance structure for social activities, the take blow shows the different between each approach.

Charitable contributions

Financial support for non-profitable organisations that undertake charitable, social, educational, community or scientific work.

The benefit is that the firm can directly resources to those community and other social organisations that are experts at a particular problem.

The company's managerial involvement is minimal.


The firm need to participate in the plan, execution and evaluation of the social activities, they take these actions alone without assistance of out-side non-profit organisations.

The company allocate financial and other resources to the project, which is implemented through an organisational unit within the firm.

The benefit is that the social project can it can be designed to meet specific needs of the company or community.


Form a partnership with other firms and a non-profit organisation, transfer resource or finance the carry out the social project together.

They able to maximize the contribution for the society and the costs can be shared by corporate sponsors.

Success factors for CSR

Tare few elements lead to successful corporate social strategy which are value creation, centrality, appropriability, proactivity, voluntarism and visibility. Value creation means the activities need to worth something and benefit someone. Centrality takes into consideration of a specific social project is aligned with the firm's core business mission. Appropriability is the ability of a social initiative to extract and capture the value. Proactivity considers the ability of the firm to anticipate social trends through its initiatives. As Husted & Allen (2011) suggested proactive environment strategy involve anticipating future regulations and social trends which influence the designing or altering operations, processes and products to prevent negative environment impact. Voluntarism is the firm carry out social activities free of legal or social constraints. Visibility deals with the extent to which social action projects and their benefits are known by the stakeholders. The stakeholders has clearly established their good deeds and linked to value creation and competitive advantage through corporate reputation. This is difficult for other company to imitate.

Environment management in practice

Construction is one activity that is acknowledged to have real and potential adverse effects on the environment and well being of the populations of the world. Construction, in general, and buildings, in particular, contributes to the environmental crisis through resource depletion, energy consumption, air pollution and waste creation.

Although the causes of environmental degradation are well known, the business logic for environmental improvement has been largely operational and technical. Few firms have incorporated sustainability into their strategic thinking. A sustainable business should use its unique position to develop and achieve sustainable production and sustainable consumption at the same time. A responsible and sustainable system of environmental management should start with pollution prevention then expand into control and environmental design.

Strategies developed in the past 20 years to reduce the operational energy consumption of buildings have largely focused on the potential energy savings associated with increasing the thermal efficiency of a building's envelope. Whilst this is a positive advance, it addresses only one part of the total energy balance of a building's life cycle.

It is evident that both the public and private sectors of the industry are making a shift towards life cycle analysis consumers have become more aware of the impact that construction activity has on the environment. As a result, they are pressuring the industry to adopt more sustainable methods. To compete in today's marketplace Pioneer must respond to these demands in an environmentally responsible and cost-effective manner.

June 14, 2013

Seven steps toward CSR strategy

Step One. Analyse social issue opportunities, competitive environment, and nonmarket stakeholders including potential creation of competitive advantage

Porter and Kramer (2006) have developed an approach for how firms can identify relevant issues central to the firm's business. The firm should first look "inside-out" by examining its own value chain. Each elements of the value chain had significant social and environment impacts. The primary activities of inbound logistics, operations, outbound logistics, marketing and sales, and after-sales service all provide clues as to the potential impacts of the firm on society. Strategy has examined the impact of managerial perception on decision-making, given bounded rationality; it is inevitable that managers across firms have varying understandings of the market environment.

Step two. Analyse firm resources and capability to see whether the firm can take advantage of those opportunities

The resource based view (RBV) of the firm assert that competitive advantage depends on firm resources, which according to Barney include "all assets, capabilities, organisation processes, firm attributes, information, knowledge, etc. controlled by a firm that enable the firm to conceive of and implement strategy that improve performance."

Step three. Evaluate firm identity (corporate culture, value, etc.) in terms of social needs and opportunities.

When firm decides to engage in social strategy its success or failure inevitably depends on firm characteristics and behaviour that can be recognized as corporate culture, firm strength and weaknesses.

Step four. If the firm does not have requisite resources and capabilities, determine the means and cost of acquiring them. They may consider alliances and collaboration.

Within the social strategy, firms then have the option either to outsource social action through charitable contributions, to internalize social projects by undertaking them in-house or to collaborate with other allies. The incorporate activities within the firm's value chain or buy from a supplier, is at the heart of corporate social strategy.

Step five. Create a plan integrating issues, stakeholders, identity, resources, competitive environment and expected outcomes.

Step Six. Implement the plan

Social strategy requires solid and long-term investment in values, including participative management practices.

Step seven. Measure and evaluate performance

The key difference between business strategy and social strategy is the differing way in which they measure performance and order activities. The real option of methods of evaluation is especially relevant to the valuation of social projects. It requires careful evaluation of the costs and effectiveness of social projects of the firm.

June 13, 2013

The difference between CSR strategy and common business strategy

Effective management of firm resources has been at the core of strategic management. It is based on firm success rests on how firms develop and acquire, organize and deploy resources in competitive market environments. Strategy rarely focuses directly on wealth creation or profit, but rather on the intermediate or proximate goal of competitive advantage. Profit in this scheme, is the end result of having a competitive advantage and leveraging it. Create competitive advantage, get your products and services to the market and the profits should come.

Social strategy is a throwback to earlier strategy models that take into account the firm's internal environment (resource and value) and the organisation's reliance upon and interaction with an external environment composed of both market and nonmarket factors. The raw materials of corporate social strategy are social issues and stakeholder positions on those issues. From there, firm develop social action projects that acquire key resources from the environment and build on critical firm resources which in combination, are difficult to imitate and lead to the creation of new products and services that provide additional value for current or new customers.

Barriers of knowledge management

Most of the barriers to effective knowledge management involve people. Human are complex with divers psychological needs. Most knowledge management systems require that data ad documents be stored in knowledge bases. From an organisational perspective, the process of building these knowledge repositories can be very time-consuming, labour intensive and costly. People are already busy and sharing knowledge may mean changing the way they work or adding extra steps to the process. For example, people may not want to read the other's writing before writing their own PMA, because their idea can be influenced by others, or follow the same the process as the others. The gap between what people actually so to perform their jobs and how it is documented is difficult to bridge due to the spontaneous actions people take in response to unexpected challenges and problems. Knowledge bases that require a great deal of upkeep may tend to fall into disuse and decay due to obsolete information. Also information taken out of context can be misleading or misinterpreted. Sometimes, too much information is available and people unable to assimilate it due to the volume and lack of appropriate tools.

Knowledge management Strategy

  • Collaborative hypermedia is good for informal knowledge type and linking ideas without specifying relationships or roles. It is useful for documenting discussions and related documents for organisational memory.
  • Learned lesson databases involve articulation of the assumptions and processes that are followed when determining a solution to a particular problem, in a format that can be later retrieved.

These types of systems are software and database tools that capture and codify tacit knowledge. Most knowledge management systems involve some aspect of computer information technology. However, this is not the only way, and organisational knowledge can be effectively managed by employing traditional mechanisms such as cross functional project teams. Formal mentoring programs will allow employees to share their expertise with others

The following process is offered as a guide for actions that should be considered when implementing a knowledge management system:

- Assess the organizational culture to ascertain the values, mind sets, behaviours, and outputs. Determine whether some areas may need reengineering. Areas to consider are organisational structure, reward system, networks available and performance appraisals.

- Identify stake holders. Determine who needs to know, when do they need, how do they get the knowledge they need now. What can be done from a human resource perspective to facilitate the acquisition and transfer of the knowledge needed. Establish buy-in from those involved ensuring cooperation and contribution.

- Determine what knowledge or types of knowledge are critical to the organisation.

- Determine where they knowledge currently resides, i.e. databases, people, documents and external sources. Is it available or will an investment in people or equipment be necessary? Does it come from communities of practice, if so, how can other such groups be encouraged?

- Determine how the knowledge is created. What processes are currently in place for generating new knowledge?

- Select a business area or process to initiate knowledge management. Keeping the project small will help to keep it focused and will enable management to better assess the success/failure of the program.

KM and company culture

Knowledge creation in firms cannot only rely on technology and technical knowledge, knowledge develops if the firm acts as a social community and specific skills of orienting communicating, translating and diffusing "how to know" are developed (Turvani, 2001). These skills, in the form of visions, cognitive models, and idiosyncratic interpretations of reality, are built up over time and they give a firm its own specific character and path of development. It should closely relate to company culture, with the environment and facilities for employees to learn and develop. Company culture differentiate companies from each other, each company have their own way to improve performance. Knowledge management has been widely considered as consisting of processes that facilitate the application and development of firm's knowledge assets.

Organizational competence also condition the way activities fit and reinforce one another, which in turn sustain the operational effectiveness. They are built internally through complex social and learning processes, organisational competencies are causally ambiguous, and consequently they are difficult to trade or imitate, scarce, valuable, and non-substitutable. These characteristics make them the source of sustainable competitive advantage, and thereby long-term profitability and improved performance in long run. In fact, organisational competencies, when leveraged into products and services, generate value and abnormal profitability and impact consequently the overall firm performance.

In fact knowledge asset management are seen as a set of intangible resource, assets and skills, which interact with each other through learning mechanisms. Knowledge management process enable the generation of new knowledge, and the development of organisational routines that form the building blocks of firm's competencies or the way it performs its operational processes and activities.

Knowledge Asset management support business performance

The management of knowledge asset impact business performance. And the business performance is equates to value generated for the key stakeholders of an organisation. The generated value is the result of an organisation's ability to manage its business processes. Which means the effectiveness and efficiency of performing organisational processes are based on organisational competencies. The management of knowledge asset enables an organisation to grow and develop the appropriate organisational competencies. Therefore, the fact that organisational competencies are based on the effective and efficient management of knowledge assets put it at the heart of business performance and value creation.

The effectiveness of knowledge asset management provides firms with an ability to constantly reconfigure accumulate and dispose of knowledge resources to meet the demands of a shiting market. The strategic management scholars refer this process as dynamic capability (Teece et al., 1997; Eisenhardt & Martin, 2000). Dynamic capability basic means the strategic routines wich firms use to achieve new resource configurations as markets emerge, collide, split, evolve and die. The dynamic capability is unique to individual firms, reflecting their specific path-dependencies and hence are considered the source of sustainable competitive advantage and long-term excellence performance.

May 04, 2013



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