04-10-2010 1 Corporate Social Responsibility in the Innovation Process. The Danish Case, as a concept Complimentary work for DEA Phd. in Management and Marketing Year: 2008-2010 Department of Management and Marketing Universidade de Vigo, Spain Author: JORGE OLIVEIRA TEIXEIRA Director : PEDRO FIGUEROA DORREGO, Phd 2010/10/05 Contents 1. Introduction to CSR 2. Corporate Social Responsibility 3. Innovation 4. Corporate Social Responsibility and Innovation 5. The Danish Case in CSR and Innovation 6. Notes for future considerations Business Innovation Conference,Presented at ILLINOIS INSTITUTE OF TECHNOLOGY 2
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04-10-2010
1
Corporate Social Responsibility in the Innovation Process.The Danish Case, as a concept
2. Corporate Social Responsibility(one definition)
Business Innovation Conference,Presented
at ILLINOIS INSTITUTE OF TECHNOLOGY05-10-2010 4
“An evolving concept, not universally accepted definition;
The way organizations integrate social, environmental andeconomic concerns into their values, culture, decision-making,strategy and operations, and thereby establish better practiceswithin the organization, create wealth and improve society”.
04-10-2010
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2.1 Introduction to CSR
CSRVoluntary
CollectiveAgreements
LawRegulated
Business Innovation Conference,Presented
at ILLINOIS INSTITUTE OF TECHNOLOGY05-10-2010 5
2.2 Relationship Between an organizationits stakehoders and society
An innovation is the implementation of a new or significantlyimproved product (good or service), or process, a newmarketing method, or new organisational method inbusinesspractices, workplace organisation or external relations.
Innovation activities include all scientific, technological, organisational,
financial and commercial steps which actually lead, or are intend to
lead, to the implementation of innovations. Some of these activities
may be innovative in their own right, while others are not novel but
represent technical advance so significant that no increase inscale, efficiency, or design can make older technologies competitive with the newTechnology
to new customers and so-far un served markets Innovation can also be characterized by its ability to either strengthen a firm's existingcapabilities and market position or to disrupt them by rendering competencies obsolete or reaching out
introduced the notion of (lead) user-driveninnovation to describe the ability of user communities to initiate and develop exceedingly complex products sometimes even without any specific manufacturer involvement
The term corporate social innovation is increasingly taken upby practitioners. Patrick Cescau CEO of Unilever for exampledefines corporate social innovation as a way of "finding newproducts and services that meet not only the functional needsof consumers for tasty food or clean clothes but also theirwider aspirations as citizens."(cited in Webb, 2007).
Literature bringing together CSR and innovation has emerged
gradually over the past decade. One interpretation of “social
innovation” can refer to improvements in the CSR process.
Examples could be improved social reporting tools or CSR
management systems.
Corporate Social Innovation
The term “corporate social innovation” was first introduced byRosabeth Moss Kanter (1999) who argues that firms should usesocial issues as a learning laboratory for identifying unmetneeds and for developing solutions that create new markets.
An important subtheme of corporate social innovation is thefocus on low-income markets. Prahalad and Hart (1999) talk in thiscontext of the potential of the bottom or base of the pyramid(BOP). Ex: reverse innovation
The BOP premise is that by focusing on the unmet needs of low-income populations firms can create profitable markets while alsohelping the poor address some of their most urgent.
Prahalad’s most notable assumption is that BOP markets have topay a “poverty premium”(This means that many poor have to paymore for products and services such as food, water,medication,credit, or telecommunication, than their middle or upper classcompatriots.
• KEY ACTION AREA 1: PROPAGATING BUSINESS-DRIVEN SOCIAL RESPONSiBILITY
• The Government wants to:
• encourage Danish companies and investors to continue and develop theircommitment and CSR work
• make it mandatory for large business to report on CSR in the management’s reviewof the annual report
• make it mandatory for institutional investors and unit trust to report on CSR in themanagement’s review of the annual report
• set up to the Social Responsibility Council charged with making recommendationsfor the Government, the corporate sector and associations
• establish a new social responsibility communication portal(www.samfundsansvar.dk)
• organize international conference “Danish Business innovating for WorldChallenges” to identify innovation areas for Danish business
• set up a knowledge network among organizations, researchers and advisors onbusinesses-driven social responsibility and responsible supplier management
• advise business though Danish representations in other countries
• work to ensure a transparent market that promotes social responsibilityconsiderations in consumer purchasing. The Government will launch a study ofconsumers‘ role in CSR
• prepare a biennial progress report on Danish businesses’ observance of andcommitment to Global Compact and PRI, first time in 2010
• KEY ACTION AREA 2: PROMOTING BUSINESSES’ SOCIAL RESPONSIBILITY THROUGHGOVERNMENT ACTIVITIES
• The Government wants to:
• ensure that, in the future, joint state supply contracts will systematically embed requirements forsocial responsibility as articulated in the conventions that provide the foundation for the UN GlobalCompact
• ensure that all state procurement officers can access the guidelines for embedding socialresponsibility
• open up dialogue with local authorities and regions with a view to disseminating experience inembedding social responsibility in their areas
• make it mandatory for state-owned public limited companies to report to CSR in the management‘sreview for the annual report
• ensure that all major state-owned public limited companies accede to the UN Global Compact
• ensure that the Vækstfonden accedes to the UN principles for responsible investment (PRI)
• ensure that the Eksport Kredit Fonden (EKF) accedes to the UN Global Compact
• continue its work for embedding social responsible in Danish development work
• ensure that the Industrialiseringsfonden for udviklingslande (IFU) and the Investment Fund forCentral and Eastern Europe (Iø) accede to the UN Global Compact
• organize conferences on businesses‘ social responsibility in developing countries jointly withDanish representations outside Denmark, local players and businesses
• ensure that the regional trade and industry development system contributes to propagatingbusiness-driven social responsibility
• strive to ensure that international investment banks embed social responsibility in their businessand investment strategies