CSR systematic long term performance improvement - handout

CSR Training Workshop for IndustriesCSR Training Workshop for Industries

Müller, OpierzynskiCSR Training for Industries, 2009

Corporate Social Responsibility Training Workshop for IndustriesCorporate Social Responsibility Training Workshop for Industries

–– Long term performance improvement through CSR integration Long term performance improvement through CSR integration ––

As part of the European Commission supported SME business develoAs part of the European Commission supported SME business development project on pment project on Empowering Asian Business Intermediaries through KnowledgeEmpowering Asian Business Intermediaries through Knowledge--based Networking based Networking

Focused on Sustainability Management (EMPASIA) Focused on Sustainability Management (EMPASIA)



1. Understand how organizations strategically manage CSR

2. Reveal how organizations can strategically create their competitive advantage through CSR

not only with consumers and investors, but with current and future employees

3. Getting started with open source ICT tools for business management support

4. Starting an ongoing learning process among the participants

Learning objectives of the CSR training Learning objectives of the CSR training

Corporate Social Responsibility (CSR) – background and business context

Getting started with CSR – Interactive Group Work

Systematic integration of CSR – process model and tools

Introduction of Redmine – Interactive Group Work „using redmine for project implementation“



Background, definitions and driversBackground, definitions and drivers



Basis for current sustainability discussion:1987 Report of the United Nations World Commission on Environment and Development “Our

Common Future” a.k.a. “Brundtland Report”

“Humanity has the ability to make development sustainable - to ensure that it meets the needsmeets the needsof the present without compromising the ability of futureof the present without compromising the ability of future generations to meet their needs.”

1992 Rio Declaration on Environment and Development, and the subsequent establishment of the “AGENDA 21”

What exactly does “Sustainability” mean and what does it entail for businesses?

Source: http://www.worldinbalance.net/pdf/1987-brundtland.pdf

Sustainable developmentSustainable development



Historical background of Sustainability Historical background of Sustainability –– from forestry to mainstreamfrom forestry to mainstream

• Hans Carl von Carlowitz (1645-1714)– Mining Administrator for the Kingdom of Saxony– Silver mining was backbone of economy– Timber valuable but scarce resource for mining

• Drafting of one of the first forestry treatise– 1713 Sylvicultura Oeconomica

• Two-fold strategy to secure timber supply– Demand-side – promotion of wood saving innovations– Supply-side – promotion of sustainable forestry

• Timber should only be taken in relation to the forest’s ability to regenerate– Promotion of long-term viability vs. short-term profit

www.zeit.de/1999/48/Der_Erfinder_der_Nachhaltigkeithttp://en.wikipedia.org/wiki/Hans_Carl_von_Carlowitz



managing resources and its impactmanaging resources and its impact in an

environmentally friendly, socially responsible and environmentally friendly, socially responsible and

economically wise wayeconomically wise way(‘Triple Bottom Line’ concept – maximization of economic, environmental and social performance)

SustainabilityManagement

CorporateSocialResponsibility

Approach to give a frame for businesses to express their commitment to society.

voluntarilyvoluntarily integrationintegration of social and environmental issues into all business activitiesbeyond regulationsbeyond regulations (corporate nomenklatura for Sustainability Management)• Internally (from health and safety to responsible use of resources and adaptation to change (innovation)

•Externally – from social handling of community, stakeholder relations to human rights and global environmental protection

Current views and definitionsCurrent views and definitions

European framework, Green Paper on corporate social responsibility



Reasons for Sustainability Management Reasons for Sustainability Management –– Why?Why?

Sustainability strategy "safeguard" - reducing and managing risks

Sustainability-induced problems and challengese.g. climate change, poverty etc. are tackled by the political system, markets or the publicRisks could affect the financial, managerial or reputation of corporationsGoal - securing the existing markets and the position in the markets

Sustainability strategy "credibility" - enhancing credibility and reputation

Credibility and reputation is a valuable non-tangible asset (also for situation of crisis)Prevention of conflicts with authorities and stakeholders Attraction of suitable employees and satisfaction of customers Defensive focus (communication with stakeholders) e.g. MNCs or industries like chemicals,

pharmaceuticals, military, oil, automotive Offensive focus (sustainable products and services), e.g. food, textile, financeGood corporate citizenship is a sound investment



Systematic integration of CSR issues into business operation Systematic integration of CSR issues into business operation –– Why?Why?

Sustainability strategy "efficiency" - enhancing productivity and efficiency

Enhancing eco or socio efficiency of business processes Cost reduction through resource efficiencyProductivity improvements through work conditions and job satisfaction

Sustainability strategy "innovation" - differentiating in the market

Creation of sustainable products and services with unique selling pointIncrease of sales and margins through environmentally and socially friendly product innovationsAdvantages through Sustainability in production, consumption or disposal phaseneeds to be strongly communicatede.g. organic food, textiles – healthy; car sharing - easy, green energy – less risky, fair trade

Sustainability strategy "transformation" – developing markets and societyTransformation / creation of new markets transforming human needs and consumption patternRequires institutional changes within human needs, politics or institutional framework Proactive lobbying participation in political committees, standard creation etc



ResponsibilityResponsibility of an organization forfor the impacts of its decisions and activitiesthe impacts of its decisions and activities (products, services and processes ) on society and the environment, throughthrough transparent and ethicalethicalbehaviorbehavior that:

Takes into account the expectations of stakeholders

Is in compliance with applicable law and consistent with international norms of behavior

Contributes to sustainable development, health and the welfare of society

Is integrated throughout the organization and practiced in its relationships

Social Responsibility Social Responsibility –– working draft 4.1 ISO 26.000working draft 4.1 ISO 26.000

http://iso26000.jsa.or.jp/_files/doc/2008/iso26000_wd4.1.pdf



Guideline Social Responsibility –working draft 4.1 ISO 26.000



Address the link between the stakeholders’ interests and the responsibilities of the organization

Determine how best to increase the beneficial impacts of the organization’s activities and how to decrease any adverse impacts

Fulfill legal obligations (e.g. to shareholders or to employees) and address conflicting interests (between the organization and the stakeholder or between various stakeholders)

Reconcile conflicts of interests

Improve decision making through better understanding of impact and consequences of actions

Contribute to continuous learning by the organizationby the organization

Provide the organization with the benefits associated with obtaining diverse perspectives

Help an organization review its performance so it can improve it

Increase transparency and the credibility of its communications

Provide a basis for cooperative activity such as partnerships

Reasons and impacts of CSRReasons and impacts of CSR

Guideline Social Responsibility – working draft 4.1 ISO 26.000



Management standards– Environmental Management

• ISO 14000 Family• EMAS (European Union)

– Quality Management • ISO 9000 Family• EFQM model for Business Excellence

(European Foundation for Quality Management)

Workplace standards– SA8000 (Social Accountability International)– ILO-OSH-2001 (International Labor Organization)– OHSAS 18001 (various worldwide Standardization Bodies)

Examples of standards which contribute to CSRExamples of standards which contribute to CSR

Reporting standards- GRI - www.globalreporting.orgwww.globalreporting.org

Social standards– ISO 26000 forthcoming 2009– AA1000 (AccountAbility)– Fair Trade Labeling Organization– BSCI (Business Social Compliance Initiative)

Industry standards– Textile

• ÖkoTex Standard 100Plus • Purewear• European Eco-Label



Aims to attain compliance of MNC and their suppliers with social and environmental standards

In accordance with international conventions and laws (ILO Conventions, UN Universal Declaration of Human Rights, UN Conventions on children's rights and the elimination of all forms of discrimination against women, UN Global Compact, OECD Guidelines for Multinational Enterprises)

1. Legal compliance2. Freedom of association 3. Prohibition of discrimination4. Compensation5. Working hours6. Workplace health and safety7. Prohibition of child labour8. Prohibition of forced labour9. Environment and safety issues10. Management systems

BSCI Code of Conduct / BSCI Code of Conduct / แนวทางปฏิบัติของแนวทางปฏิบัติของ BSCI BSCI

1.1. การปฏิบตัติามกฏหมายการปฏิบตัติามกฏหมาย

2.2. เสรภีาพในการรวมตวัและสทิธใินการตอรองรวมกนัเสรภีาพในการรวมตวัและสทิธใินการตอรองรวมกนั

3.3. หามมกีารเลือกปฏบิัตใินทกุรูปแบบหามมกีารเลือกปฏบิัตใินทกุรูปแบบ

4.4. การจายคาจางตอบแทนการจายคาจางตอบแทน

5.5. ชัว่โมงการทาํงานชัว่โมงการทาํงาน

6.6. สขุภาพและความปลอดภยัในทีท่ํางานสขุภาพและความปลอดภยัในทีท่ํางาน

7.7. การหามการใชแรงงานเดก็การหามการใชแรงงานเดก็

8.8. การหามบงัคบัใชแรงงานและลงโทษการหามบงัคบัใชแรงงานและลงโทษ

9.9. ประเด็นดานสิง่แวดลอมและความปลอดภยัประเด็นดานสิง่แวดลอมและความปลอดภยั

10.10. บริษทัผูจดัการระบบการผลติบริษทัผูจดัการระบบการผลติ

www.bsci-eu.com/



CSR surveys on practice, drivers on benefitsCSR surveys on practice, drivers on benefits

StiftungStiftung WarentestWarentest, Case Work March 09 (19 , Case Work March 09 (19 organisationsorganisations))

EU project EMIT CSR, Malaysia 07 (ca. 50 EU project EMIT CSR, Malaysia 07 (ca. 50 organisationsorganisations))

KPMG's International Survey of CSR Reporting 05 (ca. 1.600 KPMG's International Survey of CSR Reporting 05 (ca. 1.600 organisationsorganisations))

McKinsey, CSR value study 09 (ca. 80 McKinsey, CSR value study 09 (ca. 80 organisationsorganisations, 150 investment professionals, 150 investment professionals



societal and scientific opinion-forming processes of responsible corporate behavior

national/internat. conventions, standards and guidelines for responsible corporate behavior

criteria used within the framework of consumer-oriented company surveys

criteria used for socially responsible investment

criteria used in environmental, social and sustainability reporting by companies

Consumer group CSR evaluation schema by Consumer group CSR evaluation schema by ‘‘StiftungStiftung WarentestWarentest’’

The Environment1. Guiding principles and corporate policy2. Management3. Measures and implementation4. Reporting

Consumers and Society1. Willingness to provide information 2. Community involvement

Social Issues / Employees1. Guiding principles and corporate policy2. Management and measures3. Implementation4. Reporting

Social Issues / Production and Supplier1. Guiding principles and corporate policy2. Management and measures3. Implementation4. Reporting www.test.de

http://en.wikipedia.org/wiki/Stiftung_Warentest



Organisations by employees

less than 50 51 - 250 251 - 500501 - 1000 more than 1000

Own CSR Department

Cross-functional Collaboration

No organisational CSR structure

‘‘StiftungStiftung WarentestWarentest’’ –– Case Work March 09Case Work March 09

Organisations by sector (Th, 19)

Manufactur-ing

Automotive Health and social work

Education other



Detailed guidelines or principles on responsible treatment of the employees

Public statements concerning responsibilities towards its employees

Internal statements on corporate responsibility are accessible

Promotion of health and safety at work is explicitly expressed

Promotion of training and further education is explicitly expressed

Promotion of equal opportunities for women and men is explicitly expressed

Promotion of the integration of foreign employees / m inorities / different religions

Compliance with the OHS standards throughout the company is explicitly expressed

Complying with international m inimum social standards (e.g. Code of Conduct)

Avoid active or passive corruption and bribery in business

0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50%

Commitment is explicetely expressed

comprehensively largely partially inadequately

Attitude and commitment on social issuesAttitude and commitment on social issues



Social Issues / Employees Social Issues / Employees –– measuring results of implementation measuring results of implementation

Employee satisfaction is measured for all employees

Employee satisfaction is measured regularly

Employees are informed of the results by publication

Measures for improvements are introduced on the basis of these results

Details of employee absenteeism are systematically recorded and analysed

0% 5% 10% 15% 20% 25% 30% 35% 40%

Measuring employee satisfaction

comprehensively largely partially inadequately

Lower share

Number of workplace accidents has decreased

Average share or no change

Greater share or the number of workplace accidents has decreased

0% 10% 20% 30% 40% 50%

Number and development of accidents at work in the company



Complying with m inimum social standards is a pre-requisite for every signed delivery contract

Compliance with social standards is regularly surveyed

Non-compliance results in the implementation of certain measures and sanctions if applicable

The company offers free advice and training for buyers and sub-contractors

The company offers free advice and training for employees at his production sites

Preference is given to certified / audited sub-contractors (e.g. SA8000, BSCI)

Ensuring compliance of sub-contractors with minimum social standards

There is a complaints office for employees at the production site

0% 5% 10% 15% 20% 25% 30% 35% 40%

Supply chain management - social issues

comprehensively largely partially

Supply chain management Supply chain management -- social issuessocial issues

Reporting on such topics

No reporting on such topics

0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50%



Responsibility for environmental protection is allocated within the management

A specific organisational unit is responsible for environmental protection within the company

Responsibility for production process related environmental protection is allocated

Responsibility for environmental protection concerns is integrated in product development

Measurable environmental targets have been approved

Environmental indicators are defined in order to monitor achievement of targets

Employees are actively involved in environmental protection throughout the company

Motivation system to improve environmental performance in production and acquisition

0% 10% 20% 30% 40% 50% 60%

Status of environmental protection


Environmental performanceEnvironmental performance



Monitoring / publishing of company data on material and energy cMonitoring / publishing of company data on material and energy consumption onsumption

Materials: consumption of raw and process materials (absolute quantities)

Energy: consumption data according to energy source, share of regenerative energy

Water: use in production / manufacture (industrial water), drinking water consumption

Air emissions: climate relevant pollutants (CO2), nitrogen oxides, sulphur dioxide, airborne dust

Water emissions: waste water quantity and pollution (especially COD, heavy metals)

Waste: total quantity, composition, hazardous waste

Other data: transportation kilometres, noise, production accidents, complaints from the neighbourhood

0% 5% 10% 15% 20% 25% 30% 35% 40%

Environmental performance measurement

Data is collected from several areas and published

Data is collected from some areas and published

Data is collected from a few areas and published

Data of material and energy consumption is not collected and published



Complaint management system to increase customer satisfactionComplaint management system to increase customer satisfaction

W ritten declaration of responsibility within the organisation for complaint management

W ritten declaration of service and quality standards for customer complaints

Defined targets for dealing with complaints and actively communicates them to employees

Fulfillment of defined standards is regularly monitored and measured

Employees are given regular training in dealing with customer complaints

Open customer information on complaints

All customer complaints are documented and systematically evaluated

0% 5% 10% 15% 20% 25% 30%

Customer complaints




Consumers and society Consumers and society -- community involvementcommunity involvement

Annual donations in the form of money, material goods or services for environmental, social aims

Sponsoring of cultural events and amateur sports

Regular time off for employees for charity work

Sponsoring or support of training/educational establishments for the employees of sub-contractors

Promotion of projects, which improve OHS of the employees of sub-contractors or suppliers

Participation in Local Agenda processes

0% 5% 10% 15%20% 25%30% 35%40% 45% 50%

Community support

comprehensively largely partially inapplicable



Company - CSR Driver

0% 10% 20% 30% 40% 50% 60% 70% 80%

Improving Business Performance

Social concerns relating to products or service

Environmental concerns relating to products or service

Legal- or regulatory obligations

Differentiation opportunities

Information demand by stakeholders

Philanthropy

Competitive pressure

Attraction of new investors or customers

Community pressure

EU project EMIT CSR, Malaysia, 2007 - 2008

Why is your company interested in applying CSR? Why is your company interested in applying CSR?



KPMG's International Survey of CSR Reporting (2005). This report surveyed more than 1,600 companies worldwide and documented the top ten motivators driving corporations to engage in CSR for competitive reasons.

1. Economic considerations1. Economic considerations

2. Ethical considerations2. Ethical considerations

3. Innovation and learning3. Innovation and learning

4. Employee motivation4. Employee motivation

5. Risk management or risk reduction5. Risk management or risk reduction

6. Access to capital or increased shareholder value6. Access to capital or increased shareholder value

7. Reputation or brand7. Reputation or brand

8. Market position or share8. Market position or share

9. Strengthened supplier relationships9. Strengthened supplier relationships

10. Cost savings10. Cost savings

Market forces that could drive the need for organizations to addMarket forces that could drive the need for organizations to address CSRress CSR



Valuing corporate social responsibilityValuing corporate social responsibility









1.1. Potential for shareholder value from environmental, social, and Potential for shareholder value from environmental, social, and governance programs governance programs

needs to be better understood.needs to be better understood.

2.2. Stakeholders needs and demands are the base for meaningful changStakeholders needs and demands are the base for meaningful changes.es.

3.3. Applying systematic performance evaluation (data gathering, evalApplying systematic performance evaluation (data gathering, evaluation and corrective uation and corrective

action) can drive systematic improvementaction) can drive systematic improvement

4.4. The integrating of effects and impacts of environmental, social,The integrating of effects and impacts of environmental, social, and governance and governance

programs with the rest of the company’s finances / performance aprograms with the rest of the company’s finances / performance assessment is crucial.ssessment is crucial.

5.5. The role of employees in the value adding process can be enhanceThe role of employees in the value adding process can be enhanced through CSR.d through CSR.

6.6. Opportunities of environmental, social, and governance programs Opportunities of environmental, social, and governance programs to create new revenue to create new revenue

streams is not sufficiently recognized. Holistic integration of streams is not sufficiently recognized. Holistic integration of CSR issues in business CSR issues in business

planning and reporting is the base to tap these opportunities.planning and reporting is the base to tap these opportunities.

7.7. Communication and corporate culture are keys to CSR. Communication and corporate culture are keys to CSR.

Consequences for actionConsequences for action



CSR CSR –– making profit with a clear conscience!making profit with a clear conscience!

Involves every aspect of an organization, like

Governance

Environmental sustainability

Risk management

Workplace issues

Cultural norms

Local laws and customs

….



Green Paper on Promoting a European framework for Corporate Social Responsibility, European Commission, 2001

ISO 26.000 ‘Guidance on Social Responsibility, ISO/TMB/WG SR N 137, 2008.03.11

Mapping instruments for corporate social responsibility, European Commission, Directorate-General for Employment and Social Affairs, 2003

Valuing corporate social responsibility, McKinsey Global Survey Results, Value and effects of CSR, survey among CFOs, investment professionals and CSR professionals, 2009

Further readingFurther reading

Corporate sustainability: What is it and where does it come from?, Mel Wilson, Ivey Business Journal Online, 2003

Sustainability Management in Business Enterprises, Concepts and Instruments for Sustainable Organisation Development, Schaltegger, Herzig, Kleiber, Müller, published by The Federal Ministry for the Environment, Nature conservation and Nuclear Safety (BMU), Division for Environment and Economy, Eco-Audit



Further reading, information and networking Further reading, information and networking –– www.sustainwww.sustain--asia.orgasia.org



Systematic integration of CSR into business operation Systematic integration of CSR into business operation



Performance Controlling ReportingReporting

AssessmentAssessment

Continuous ImprovementContinuous Improvement



Internally directed analysis of own Internally directed analysis of own company (e.g. SWOT)company (e.g. SWOT)

Externally directed analysis ofExternally directed analysis of-- IndustryIndustry-- MarketsMarkets-- EnvironmentEnvironment

Formulation of the companyFormulation of the company’’s core s core reason to be.reason to be.

Definition of corporate valuesDefinition of corporate values

Definition of corporate cultureDefinition of corporate culture

Formulation of midFormulation of mid-- and longand long--term term plan of action toplan of action to-- fulfill the companyfulfill the company’’s mission, s mission, -- while taking account the companywhile taking account the company’’s s capabilities (internal analysis) and itcapabilities (internal analysis) and it’’s s competitive environment (external competitive environment (external analysis)analysis)

Strategy Development



Implementation

Planning

Using the Balanced Scorecard approach to break down business strategies (Kaplan & Norton)

Which financial objectiveshave to be fulfilled to

implement the strategy

Financial perspectiveFinancial perspective

Vision&

Strategy

How do internal processeshave to change to


How the companywants to be seenby the customer

What employees and theorganisation have to learn


Internal process p.Internal process p.

People & knowledge p.People & knowledge p.

Customer perspectiveCustomer perspective



Financial PerspectiveFinancial Perspective

Customer PerspectiveCustomer Perspective

Internal Process PerspectiveInternal Process Perspective

People and Knowledge PerspectivePeople and Knowledge Perspective

Move products up market to increase

profit margin for own branded products.

Be recognized as sustainable

company

Provide (own-branded)

products tailored to customers’ needs and

tastes

Develop and introduce right products to the right markets

Green production

process

Increase flexibility of production

Increase business

transparency

Improve business

communication

Ensure production staff can perform tasks environmentally

responsibly

Foster a company culture of sustainability

Move to knowledge based

value creation

Company Medium-Term StrategyCompany Medium-Term StrategyIncrease the company’s profits by international expansion and differentiation

through sustainability



Financial Perspective

Goal Key issues Target Activity

Increase profit margin for own-branded products

•Profit margin•Production costs•Selling price•Overhead costs

•+50 percent• -10 percent•+60 percent• -5 percent

Align company processes to sustainability principles to differentiate products and create added value for customers




Goal KPIs Target Activity





Customer Perspective


Be recognized as a sustainable company

•Positive media reports

•Consumer survey score

•Marketing budget

•6 reports in local, 3 in international media

•+35 percent•+25 percent

Use PR instruments to communicate company’s commitment to sustainability. Develop co-branding/co-selling strategy with sustainable products.

Provide products tailored to customers’ needs

•Customer satisfaction

•Loyalty ratio (re-buy rate)

•+50 percent

•50 percent

Engage customers to survey needs and identify trends, focus also on buying habits.














•Marketing budget







•+50 percent

•50 percent


Process Perspective


Green production processes

•Recycled materials as input

•Hazardous materials

•Energy consumption

•40 percent

•Decrease or substitute to 10 percent

•Use 40 percent from RES

Analyze production process from a holistic perspective and identify potential to green the production process, e.g. through substitution, reduction and avoidance .

Flexibility of production processes

•Lead-time•Set-up time•Time to customer

• -10 percent• -15 percent• -20 percent

Improve order planning through effective customers involvement (design)Training of staff,Optimization of internal and external logistic, optimize supplier management














•Marketing budget







•+50 percent

•50 percent


Process Perspective


Green production processes

•Recycled materials as input

•Hazardous materials

•Energy consumption

•40 percent

•Decrease or substitute to 10 percent

•Use 40 percent from RES

Analyze production process from a holistic perspective and identify potential to green the production process, e.g. through substitution, reduction and avoidance .

Flexibility of production processes

•Lead-time•Set-up time•Time to customer

• -10 percent• -15 percent• -20 percent

Improve order planning through effective customers involvement (design)Training of staff,Optimization of internal and external logistic, optimize supplier management

People and Knowledge Perspective


Improve knowledge based value creation

•Training of staff

•R&D costs

•6 hours / month•2 courses / year•30% increases of CIP impact

•25 % increase to production cost

Provide production related training, set up of knowledge management system, Value added products through new designs

Culture of sustainability

•Employee satisfaction

• Improvement by employees

•Recruitment of Univ. Gradates

•85 percent

•15 suggestions per quarter

•+20 percent applications

Anonymous employee survey to identify problems, set up of incentive schema, CIP networking events, communication platform, improving working atmosphere



Performance Controlling ReportingReporting

AssessmentAssessment

Continuous ImprovementContinuous Improvement



Development of a CSR Performance Assessment SystemsDevelopment of a CSR Performance Assessment Systems

Assessment Plan Goal system for the companyActivity specificationStakeholder engagement

Assessment Procedure Defined procedure (reporting cycles, assessment meetings)Responsibilities / competencesStandard key performance indicatorsChange management plan for improvementsCommunication planReview procedure

Types Monitoring, benchmarking, audit / internal/externalContent KPIs, benchmarks, goal achievement, improvement monitoringStructure Specific definition, graphics, resultsReporting Publication, frequency, work flow

Assessment Reports



Department

Production AreaArea 1 Area 2 Area n

Closed LoopClosed Loop Closed Loop

Department 1 Department 2 Department n Material FlowMaterial Flow

CompanyTop ManagementIn

form

atio

n f

low

Info

rmat

ion

flo

w

Performance assessment / closedPerformance assessment / closed--loop controlsloop controls



A B

CEOCEO

ManagerManager

FormanForman

EmployeeEmployee

DirectorDirector

MasterMaster

levels

Ways of decisionsWays of decisions Ways of communicationWays of communication

Procedures, Responsibility and CompetencesProcedures, Responsibility and Competences

เกรงใจเกรงใจ graengdjaigraengdjai ???? InterfacesInterfaces



Established management structures and processesEstablished management structures and processes

Hierarchical power, prestige, career related interests of emploHierarchical power, prestige, career related interests of employees etc.yees etc.

Assumptions, thoughts and beliefs of employees regarding goals Assumptions, thoughts and beliefs of employees regarding goals and activitiesand activities

Insecurity and rejection caused by transparency and quantitativInsecurity and rejection caused by transparency and quantitative controllinge controlling

etc.etc.

Strong commitment from top managementStrong commitment from top management

Creation of awareness and open mindCreation of awareness and open mind--set of employees (internal acceptance)set of employees (internal acceptance)

Proactive approach to tackle potential mental reservations of eProactive approach to tackle potential mental reservations of employees mployees

Establishing a discourseEstablishing a discourse--oriented infrastructure (e.g. internal discussion on activities oriented infrastructure (e.g. internal discussion on activities

before implementation)before implementation)

Involvement of various functions and departmentsInvolvement of various functions and departments

Consideration of microConsideration of micro--political issues (influence and hierarchical power)political issues (influence and hierarchical power)

Integration into general management (avoid separation of manageIntegration into general management (avoid separation of management systems!)ment systems!)

Regular revision according to performance and changes in corporRegular revision according to performance and changes in corporate strategyate strategy

……

Challenges for CSR activity implementation & performance controlChallenges for CSR activity implementation & performance controllingling



Leveraging the Balanced Scorecard for Social Responsibility and Reporting, Michael E Nagel, Balanced Scorecard Collaborative, Inc., 2005, webcast (Why the Balanced Scorecard is a powerful tool for managing and communicating corporate social responsibility)

Sustainability management with the Balanced Scorecard, Thomas Bieker, Institute for Economy and the Environment at the University of St. Gallen (IWOe-HSG)

Further reading / listeningFurther reading / listening



ICT and business managementICT and business management



Ensuring business performance and competition levelsEnsuring business performance and competition levels

World Bank ranking Thailand – overall business efficiency index versus knowledge economy index 34 – 56 (business performance versus base for economic success)

Total Factor Productivity (TFP) is regarded as technical productivityStatistical method to determine economic development driversTechnology growth and efficiency main sub-sections of TFP

Knowledge economy index reflects ability to employ technological progress for economic prosperity World Bank survey of over 20.000 businesses in low- and middle-income countriesResult: companies using ICT were found to have 60% higher profits and 15% higher re-investment rates, the value added per employee was about 3.400 US$ higher (average base of value added per employee / a: 7.000 US$).

From resource and labor intensive to more knowledge based production pattern through adaptation of advanced business management practices

The Global Competitiveness Index rankings, 2007–2008 comparisons, World Economic ForumThe Role of ICT in Doing Business, Information and Communications for Development, 2006, World Bank, www.worldbank.org/ic4d



Adaptation of advanced business management Adaptation of advanced business management –– key areas and approacheskey areas and approaches

Strategic business management – CSR

CSRCSR – holistic and strategic management approach to lead towards environmental-friendly and socially advanced businesses, Integration of environmental and social factors meaningful into business practices

Operational business management – Resource Management

process management approaches to enable effective planning and efficient use of environmental related resources (Process Monitoring & Controlling and Enterprise Resource Planning)

Performance evaluation – Environmental Cost Accounting and Investment Appraisal

activity based, physical and monetary accounting for impact and opportunity quantification

enables fundamental decision support through quantification of environmentally related costs and investment opportunities (e.g. technology evaluation)

Communication and business culture which contribute to organisational learning

Cross-functional methods, e.g. Continuous Improvement Processes, Knowledge Management, Stakeholder Relationships Management



Enhancing creativity and know-how of employees

Enhancing organizational learning

Systematic comprehensive and targeted communication

Creating transparency and managerial awareness of business processes

Both, transparency and awareness depend on the ability of companies (particularly SMEs) to collect, process, and analyze respective data

Hence, modern business management depends on availability and efficiency of corresponding systems for data processing system (so-called advanced ICT)

General requirements for the adaptation of advanced business manGeneral requirements for the adaptation of advanced business managementagement



Reasons for insufficient level of ICT adoptionReasons for insufficient level of ICT adoption

Even if SME owners have a strategic understanding of why they should adopt ICT, their staff is often poorly trained. Training costs both time and money –resources that SMEs usually lack.

Limited ICT literacy of employees in SMEs hinders ICT adoption

ICT is a difficult task for companies of all sizes, whether they are in developed or developing countries. The main challenge is, it must go along with organizational and structural changes in companies.

Adopting ICT is not a technical challenge

IT budgets are usually small or nonexistent. In addition, adopting ICT is not a one-time cost because there are ongoing costs of maintaining and upgrading hardware and software, and human capacity building.

Lack of financing options limits SME ability to purchase ICT

Many SME owners are unfamiliar with operating a computer, skeptical of the concrete benefits for the core business, and share the stereotype that advanced ICT is only for larger companies.

Limited ICT literacy of SME owners hinders their ability to choose

ICT firms used to target large enterprises (budget, HR to run state-of-the-art ICT). These products are often too expensive and too complex for SME users.

Most advanced ICT products are designed for larger firms, not SMEs

While basic infrastructures and ICT equipment are accessible in Thailand, service and support infrastructures are underdeveloped.

Poor service of support infrastructures result in limited business access and low application levels



Sustainable business success needs adequate controlling and supporting systems. A large number of Thai companies are not prepared for the future! ? (IT&C FORCE 04)

Business assessment based on indicatorProcess monitoring with indicatorInternal communicationInternal documentationIn-house gap analysisRepresentation and analysis of material flowsSimulation of processesPreparation of material and energy balancesExternal documentation/communicationRecycling or waste exchangeDefinition of environmentallyoriented objectives

0%20%40%60%80%

in use not in use

0% 20% 40% 60% 80% 100%

very great and great

IT systems used to support controlling and management tasks and IT systems used to support controlling and management tasks and real benefit (or benefit from future use)real benefit (or benefit from future use)

ICT for business managementICT for business management



http://acquia.com/products-services/acquia-drupal , www.sugarcrm.com

Internal / external communication, stakeholder involvement (CRM)

Stakeholder Relationship Management

Drupal, SugarCRM

www.efrontlearning.nethttp://community.elgg.org

web 2.0 e-learning and knowledge management for businesses, Internal / external communication

Knowledge Management, e-Learning for business

E-Front, Elgg

www.umberto.de/enMaterial and energy flow analysis, process simulation

Resource Management, Environmental Investment Appraisal

Umberto

www.redmine.org/Workflow management for continuous improvement processes

Environmental Management, CSR

Redmine

http://forge.openbravo.com, www.pe-international.com/sofi

Indicator based process monitoring from manufacturing process to supply chains and Enterprise Resource Planning

Resource Management, CSR, Environmental Cost Accounting

Open Bravo, SoFi

LinkFunctionSM approachExamples for advanced ICT

Selected advanced ICT for business managementSelected advanced ICT for business management



www.modiconsult.comwww.modiconsult.com

Resource flow analysisResource flow analysis



Computer software for which the source code are provided under a variety of software license

License examples: Apache License, GNU General Public License, GNU Lesser General Public License, MIT License

GNU General Public License most popular (about 2/3 of projects listed on SourceForge.net)

Permits users to use, change, and improve the software under specified conditions

Permits to redistribute it in modified or unmodified forms under specified conditions

Often developed in public or collaborative manner

web-based source code repositories offer centralized location for developers to control and manage open source software development projects

e.g. SourceForge, world largest development site, more than 230,000 projects with over 2 million registered users, 34 million unique visitors each month

Linux, MySQL, Firefox, WordPress, xt:commerce, Elgg, OpenOffice, Redmine …

Open Source SoftwareOpen Source Software

http://en.wikipedia.org/wiki/Open_Source_Definitionhttp://sourceforge.net/http://opensource.yeebase.com/top100



Flexible project management web application to manage, document Flexible project management web application to manage, document and track workand track work

Written in Ruby on Rails frameworkWritten in Ruby on Rails framework

Open source and released under the terms of the GNU GPL v2Open source and released under the terms of the GNU GPL v2

Multiple data base support Multiple data base support Issue management systemIssue management system

Refers to the discipline and process of managing business tasks

Workflow, communication support and controlling

Typical application: complaint, suggestion and project management

Main features:Main features:

Multiple projects support, flexible role based access control

Flexible issue tracking system, news, documents & files management

Feeds & email notifications, per project wiki and forums

Time tracking, custom fields for issues, time-entries, projects and users

Multilanguage support, Multiple databases support (MySQL, PostgreSQL or SQLite)

RedmineRedmine -- www.redmine.orgwww.redmine.org



Typical issue workflow [issue submitted] Typical issue workflow [issue submitted] --> [open] > [open] --> [assigned] > [assigned] --> [solved] > [solved] -->> [in evaluation][in evaluation] --> > [closed] [closed]

Often tasks and work are completed in loops [assigned] Often tasks and work are completed in loops [assigned]

Example for electronic workflow with regard to roles:Example for electronic workflow with regard to roles:

1.1. issue submitted by a customer, salesperson, employee issue submitted by a customer, salesperson, employee

2.2. issue is relocated to the responsible employeeissue is relocated to the responsible employee’’s inboxs inbox

3.3. employee evaluates the issue and fulfills the task employee evaluates the issue and fulfills the task

4.4. In case task can not be completed issues is assigned to the nextIn case task can not be completed issues is assigned to the next appropriate employee appropriate employee (workflow) until task is completed(workflow) until task is completed

5.5. When task is completed result will be evaluated and closedWhen task is completed result will be evaluated and closed

6.6. Originator will be notifiedOriginator will be notified

Workflow, inputs and outputs fully documented in the systemWorkflow, inputs and outputs fully documented in the system

RedmineRedmine –– example for issue workflowexample for issue workflow



Indicator Management Process Management



Project proposition: Transition of SMEs and supply chain networkstowards sustainable production processes through an active uptake of ICT solutions for

sustainability management – ICT4SM

1. To develop a portfolio of efficient ICT-based sustainability management tools and solutions tailored to the local conditions in Southeast Asia and needs of local SMEs across various industrial sectors

2. To stimulate and facilitate an uptake of ICT-based sustainability management methods and tools in significant number of regional SMEs and to improve their competitiveness and local environment situation

3. To establish a service infrastructure for fostering sustainability management culture and capacity

4. To encourage uptake of sustainability management tools and practices on national/regional level through active dissemination and promotion activities

ObjectivesObjectives



Example for combining tools and services for on demand applicatiExample for combining tools and services for on demand applicationon



Small and Medium Enterprises and ICT, Vadim Kotelnikov (Foreword by Kim Hak-Su), UNDP-APDIP, APCICT, 2007

The e-primer looks at how the knowledge-based economy has impacted small and medium enterprises (SMEs); explores why so few SMEs have adopted why SMEs should adopt ICT; provides policy recommendations for promoting SME adoption of ICT.

Further readingFurther reading

The Role of ICT in Doing Business, Information and Communications for Development, 2006, World Bank, (IC4D is a regular publication of the World Bank on the critical role of ICT in economic development. www.worldbank.org/ic4d

Towards a Knowledge Economy in Thailand, Office of the National Economic and Social Development Board, World Bank, 2008 (Fundamental reasons for Thai SMEs to switch to more sustainable and innovation-based development patterns)

How businesses are using Web 2.0, McKinsey Global Survey

IT’s unmet potential, McKinsey Global Survey Results, 2008

Documents

CSR systematic long term performance improvement - handout