Implementation of Total responsibility Management into Corporate Strategy

1. Implementation of Total responsibility Management into Corporate Strategy Štefka Gorenak, Faculty of Commercial and Business Sciences, Sloveniagorenak.stefka@siol.net Vito Bobek, University of Applied Sciences FH Joanneum, Graz, Austria; Palemid - Consulting, Research, Education LLC, Maribor, Slovenia vito.bobek@palemid.si Trends and Future of Sustainable Development, 9-10 June 2011, Tampere, Finland

2. . Paper deals with: • Strategic Corporate Social Responsibility, • Relationship and potential synergies among the TQM, Total responsibility Management (TRM),CSRand CC (corporate citizenship), • Implementation of TRM into corporate strategy, importance of the responsible leadership and stakeholder engagement, • Sustainable indicators and ISO 26000 in Slovenian multinational company Responsible competitivenes, • Gorenje Group – from TRM to CC Aim: • to present the successful case - implementation of TRM or CSR strategy into business practice in Slovenian multinational company, and • to analyze the innovative and holistic implementation of TRM into Gorenje Group strategy including its measurement (sustainable indicators) and sinergies (competitiveness, community engegement, innovative CSR…).

3. TQM, TRM, CC - Innovative CSR • Total Quality Management (TQM) and Total Responsibility Management (TRM): • Innovation imperative – innovative corporate strategies, innovative CSR, • Competitiveness of the responsible companies, • Community involvement.

4. Total Responsibility Management(TRM) in brief means: inspiration: vision setting and leadership systems; integration: corporate strategy, employee and operating practices; innovation: improvement and learning systems; plus indicators– measurement - sustainable indicators (Global Reporting Initiative – GRI - tripple bottom line - , economic, social, environmental).

5. TRM core values/concepts: Visionary and committed leadership. Stakeholder-driven excellence and responsible practices. Organisational and personal learning through dialogue and mutual engagement with relevant stakeholders (primary and secondary stakeholders). Valuing employees, partners, other stakeholders. Agility and focus on the future (short and long term). Managing for responsibility and improvement. Management by fact, transparency, accountability. Public responsibility and citizenship. Focus on positive results, impacts and value-added for stakeholders with responsible ecological practices.

6. Putting responsibility management into practice – Corporate Strategy Top management need to take a long-term perspective, make a public commitment, communicate the commitment, be a role model for the company’s values, integrate vision and values into strategies and practices and support changes. Responsibility management approaches must be both systemic and holistic of they are to be effective. ISO 26000 was designed as a holistic approach involving the interdependence of seven factors: community involvement and development, human rights, labor practices, the environment, consumer issues, fair operating practices and organizational governance

7. Successful implementation of Total Responsibility Management - Case Gorenje Group Core business:  The production and sales of large Household Appliances Organisation: A Parent Company Gorenje, d.d., and 83 Companies (59 International) - on the 31st of December 2010 Export:  95 percent of sales Gorenje's market share:in key markets was 4.5 percent and 11.6 percent in markets where they generate the greater part of their revenue (Europe). Represented in:  70 Countries Worldwide, mostly in Europe Sales under Own Brand Name:  90 percent Average number of employees:  11,174 employees (2010) Consolidated revenue:  EUR 1.4 bn (2010) Geographical sales structure of large household appliances in the 2010: The greater part of this amount (69 percent of value volume) was generated in the markets of Eastern (Russia, Ukraine) and South-eastern Europe (Serbia, Czech Republic…), followed by the markets of Western Europe (Germany, Netherland, Denmark, Norway…) with 27 percent, and the markets of the Middle (UAE, Iran, Turkey…) and Far East (China, Taiwan, Hong Kong).

8. Gorenje Corporate Sustainability Board The Gorenje Corporate Sustainability Board is made up of the members of the management boards of the subgroups responsible for ecology and technology and the heads of the Corporate Center departments Corporate Human Resources & Organization, Communications and Environment & Sustainability.

9. CSR in Gorenje Group incorporates: • Responsibility to employees (education and traning of employees, taking care for young and promising staff, healthcare of employees, assurance of sustainable employment of disabled persons, communications with employees); age management.. • Responsibility to users of products and services(assurance of product safety, assurance of environmentally friendly products)

10. CSR in Gorenje Group incorporates: • Responsibility to closer and wider social environment Responsibility to customers ensures that the product is of high quality, accessible, safe and environmental frendly causing less social and environmental impacts. More long-term attention should be paid to education of sustainable customers and all stakeholders (values) in welfare society.

11. CSR in Gorenje Group incorporates: • responsibility to the natural environment corporateculture (short- andlong-term) - ISO 14001 wasimplemented ten years ago. Theymeetrequirementsofthe EMAS regulation (in 2003). Eco cycle - newproductsenvironment-friendly, producedthroughenvironment-friendlytechnologicalproceduresandmaterials, usingenvironment-friendlytechnologicalproceduresandmaterials, andconsuminglesspower, waterand detergent. Theseappliancesrankamongthe most cost-efficienthouseholdapplicances in the market (thehighestEuropeanstandards - materialsandcomponents are at least 80 percentrecyclable). Most of Gorenje productsrank in the A, A+, or even A++ energyclass.

12. Eco family initiative Theaim: • to motivateindividuals to changetheirwastefulhabits, • to introduceenergy-efficienttechnology in theirhomesand • to seek alternative options. Byestablishingthe Eco Familyinitiative, Gorenje is extendingtheframeworkofthinkingabouttheagentsofeffortsfor a cleanerenvironment; In addition to askingwhat I can do as anindividual or employee, it seeks to answerhowwe as societycancontribute. Twobooksentitled“Ecofamily – EnvironmentallyFriendlyOperation in Order to Preservethe Planet” and“Ecofamily – Helpthe Planet withtheInformedBehaviour”, havebeenpublishedwithintheinitiativeofthe Eco Family.

13. Gorenje Group - case • Corporate social responsibility is included in the corporation strategies which include the permanent measurement (sustainable indicators) to the stakeholders. • Long-term competitive advantagesandsustainable development are expected. • Gorenje Group, with a good corporate citizenship is involved in a wide array of community activities. • Gorenje Group presents the successful case of holisticandinnovativecorporate social responsibility and sustainable development in Slovenia.

14. Thank you for your attention! Štefka Gorenak, gorenak.stefka@siol.net Vito Bobek, vito.bobek@palemid.si