Supporting Internal Learning and Change through Stakeholder Engagement

1. Supporting internal learning and change through stakeholder engagement Boleslaw Rok, LKAEM Tytuł prezentacji Miejsce i data Kyiv, Ukraine, June 6, 2008

2. CSR and social issues • CSR focuses on responsible decision making and practice in all business activities. • A basis for value creation through innovation, discovering new business models, new markets, new products. • How can business contribute through collaborative governance to address (solve?) main social problems such as poverty alleviation and climate change? • The new ‘social contract’ between business, government and civil society. There are all part of the problem and together can be part of the solution.

3. RESPONSE: Stakeholder engagement • SE appears to be an important step, but not sufficient in and of itself to achieve excellence in CSR. • SE might be most effective where it focuses on supporting learning and change. • SE should be redirected, at least in part, from the current emphasis on ‘listening’ and ‘telling’ to more active collaboration aimed at embedding responsibility in all relevant processes.

4. Co-creation • Traditional, firm-centric view of engagementvs. innovative co-creation by the partnership of companies and stakeholders. • The key building blocks of co-creation: dialogue, access, risk assessment and transparency – DART. (Prahalad, Ramaswamy) • From „firm-centric” to „dialogue-centric” (the Copernican Revolution) to complexity (the network revolution).

5. SE: a tool for beginners? • The set of companies in the RESPONSE project was made up of ‘good’ and ‘great’ social performers. It could be that SE practices are necessary conditions to get to ‘good’ social performance levels, from the ‘poor’. • The pressure from external stakeholders can play an important role in the development of managerial awareness of the social implications of their decisions. • What does is mean ‘successful engagement’ – in terms of consequences for the social performance?

6. Example: Stakeholders importance • CSR Reports in Poland (not only): Greater importance to traditional stakeholders than to social stakeholders. • Managers sequence stakeholders based on the importance of their impact on the company. They implicitly view stakeholders for what “they can do to us”, rather than “what we do to them”.

7. Different forms of dialogue Non-participatory (based on Bendell, 2000): • to disarm particularly critical stakeholders; • toeducate, to inform,to persuadesome stakeholders; • to consult, to access stakeholder opinions. Participatory: • partnership: planning and decision-making responsibilities are shared to a certain extend (coordination, cooperation, coopetition); • delegation: delegating certain decisions tocommittees where stakeholders have a majority voice (CCI initiatives); • collaboration: working together toward a common goal by sharing knowledge and learning (mutuality).

8. Conclusion 1: new hybrid structure CSR - CCI FIRM Stakeholder New hybrid • Business as a hybrid structure, a collaborative act addressing hot social issues, based on the common values, and shared entrepreneurial attitude. • Mutuality (understanding, education, benefits). • The shift from co-operation and coordination to collaboration geared towards significant change (process, product, person).

9. Conclusion 2: interdependence Firm 1 NGO 1 Firm 2 social issue community NGO 2 public authority government Firm 3 • Issue-based attitude, common space, not firm-centric. • Interdependence in collaborative networks: there is a need for participants to come together tosolve a complex problem that they recognize they cannot solve on their own. (Mandell and Keast) • Looking for a new partnership pattern that links business with different stakeholders and promotes social, economic, and environmental development - internally-driven or externally driven engagement.

10. Final conclusions • Business is a creative, entrepreneurial act involving multiple collaborating partners contributing to social, ecological and economic gain. (Wheeler, McKague) • The more closely tied a social issue is to a company’s business (and personal values), thegreater the opportunity to leverage the firm’s resources and benefit society (Porter and Kramer, Midttun) • ...and to leverage stakeholders’ resources, to convince others of a vision, to build commitmentthrough interpersonalrelations. • The purpose is to find more innovative ways to solve the problem(s) for which the partnership was established.

11. Issues for discussion • What to expect from the government, in terms of public policy, supportive regulations (GSR)? • What to expect from the management education? • High risk of collaboration with irresponsible partners (mature civil society?) • Vision for the future: „All over the world the private sector, governments and civil society are cooperating in a common space, with long-term, sustainable benefit for all.”

12. Thank you for listening Boleslaw Rok LKAEM brok@wspiz.edu.pl