Respond to at least two of your colleagues’ postings in one or more of the following ways:

Post an analysis of the risks and benefits of integrating a positive social change mission into organizational strategic planning. Your analysis should include the following:

· What are the benefits for organizations considering integrating positive social change into their business strategy?

· What are the potential risks for organizations considering integrating business strategies with an emphasis on positive social change?

· Provide a real-world example of an organization that experienced an unsuccessful implementation of a positive social change initiative. As an independent scholar and global change agent, explain what the organization might have done differently, including planning or executing strategies to improve marketplace or cultural impacts.

Dwight

Benefit

The primary benefit of incorporating social change into the strategic planning process is that the organization can have an impact on society (Reed, 2017). Especially if society has not moved in the direction of growth. Cummins, Inc. proved it could be done dating back to the 1940s. Cummins’ organizational leadership defined an organizational culture of diversity and Christian values early on (Reed, 2017). Thus, creating an identity of diversity for Cummins. This identity earned Cummins Inc. a reputation as an organization built on values, morals, and ethics. In turn, this built Cummins, Inc. as a brand of integrity (Reed, 2017). If you stand for something, your product must be good. 

Risks

Of equal importance is the risks organizations can face by integrating social change into strategic planning. Most notably is the effect on stakeholders (Dyer, Godfrey, Jensen, & Bryce, 2016). Cummins, Inc. supported minority workers and Lesbian, Bi-Sexual, Gay, and Transgender (LBGT) rights at a time when it was socially unacceptable to do so. The organizational culture was in direct contrast to some of the employee’s values as well as society’s (Reed, 2017). Additionally, Cummins’ profitability suffered at times because the community’s perspective was that Cummins’ diversity was illegitimate (Reed, 2017). Moreover, as such, would not support the organization economically. 

Volkswagen

The Volkswagen Group failed miserably at Corporate Social Responsibility (CSR). Volkswagen intentionally set out to develop a way to by-pass emissions control with and end-state of gaining an unfair advantage over its competitors (Blažek & Slovák, 2018). This ultimately allowed them to become the world’s number one car maker; largely based on its supposedly environmentally friendly cars. This case is CSR failure at every level. The best way to mitigate this issue is to ensure the head of CSR is enforcing governance and ethics (Dyer et al., 2016). Organizations have a CSR department for a reason. The CSR department, along with organizational leadership, has to set the tone for the organizational climate, as it relates to adhering to governance. It is hard to believe that Volkswagen’s CSR did not know the engines that were being produced were toxic to the environment. This is another case in point about the importance of leadership. Good leaders always surround themselves with the right people in the right positions. However, more importantly, they empower them to do their jobs and subsequently, they listen to them (Demirtas, Hannah, Gok, Arslan, & Cpar, 2017).

References

Blažek, L., & Slovák, V. (2018). Failure of the corporate responsibility system in a large multinational corporation case study "dieselgate." Scientific Papers of the University of Pardubice. Series D, Faculty of Economics & Administration, 25(42), 17-28. Retrieved from https://ezp.waldenulibrary.org/login?url=https://search.ebscohost.com/login.aspx?direct=true&db=a9h&AN=132025840&site=eds-live&scope=site

Demirtas, O., Hannah, S. T., Gok, K., Arslan, A., & Cpar, N. (2017, October 22). The moderated influence of ethical leadership via meaningful work, on followers' engagement, organizational identification, and envy. Journal of Business Ethics, 145(1), 183-199. http://dx.doi.org/10.1007/s10551-015-2907-7 (Original work published 2015).

Dyer, J., Godfrey, P., Jensen, R., & Bryce, D. (2016). Strategic management: Concepts and tools for creating real world strategy. Hoboken, NJ: John Wiley & Sons.

Reed, H. (2017). Corporations as agents of social change: A case study of diversity at Cummins Inc. Business History, 59(6), 821-843. http://dx.doi.org/10.1080/00076791.2016.1255196

Michael

Social-responsibility programs that merely give away money are no longer the intended outcome for firms looking to integrate social change into their platform because now the desire is philanthropy as a business strategy that produces both financial and societal returns (Bermudez, 2010). A company must choose the correct philanthropy project and support it with money and other means to advance the agenda. For this week’s discussion, I will analyze the benefits for organizations considering a social change mission. Then I will discuss some potential risk associated with integrating business strategies with an emphasis on positive social change. Finally, I will examine an example of an organization that experienced an unsuccessful implementation of a positive social change initiative, and what the organization could have done differently. 

The Benefit of Social Change Integration

          Corporations are not responsible for the world’s problems, nor do they have the resources to solve them all but each company can identify the societal problem that it is best equipped to lead toward self-sustaining solutions and from which it can gain the greatest competitive benefits (McManus, 2008). When a company does choose to align with a worthy cause, there are many benefits to the collaboration. One benefit gained is a positive reputation. Reputation contributes to public confidence where the organization earns the benefit of the doubt if negative information arises, which is an advantage over rival companies (Vercic & Coric, 2018). A company possessing a bad reputation must work harder to remove itself from previous bad conduct. Businesses should be aware that the inclusion of social responsibility objectives in strategy must not only trigger the desire to build a positive image but also as a condition of building sustainable businesses practices (Ganescu, 2012). Practicing responsible business practices encourages other organizations to do the same but the competitive advantage lies with the company that started the practice. The competitive advantage gained by being the first to start a sustainable initiative earns the company rights to brag about how they are doing something no other company has ever done before. 

Potential Risks of Social Change Integration

          Opponents of corporate social responsibility view the primary responsibility of business as generating a profit for shareholders and using company resources to engage in social change reduces the distribution of profit to shareholders but proponents believe that corporations must satisfy the need of both investing stakeholders and non-investing stakeholders (Harjoto & Laksmana, 2018). When a CEO decides to spend money on social change, he or she must determine if the risk outweigh the rewards. One problem that might exist is when less capital is available the company might take less risks to achieve competitive advantages. Harjoto and Laksmana (2018) hypothesized that social change is costly, diverts cash away from investments in brand-enhancing projects, and teaches managers risk avoidance, which threatens a firm’s survival. For example, Altria spent more than $1 billion on social projects such as preventing domestic abuse, feeding the ill and the elderly, and responding to disasters like Hurricane Katrina (Sun & Cui, 2014). Executives have a fiduciary duty to act in the best interest of the corporation while maximizing profits for shareholders so there must be a balance between social change and competitive advantage (Dyer, Godfrey, Jensen, & Bryce, 2016). A reputation can go in the other direction if the corporation acts in an irresponsible or manipulative manner to the social change activity losing social legitimacy whether intentional or unintentionally (Shim & Yang, 2016). If this were to happen, the social responsibility tarnishes the brand and the company has to fight a public relations war to fix any perceived wrong doings. 

Unsuccessful Implementation of a Social Change Initiative

          Volkswagen earned the distinction of the Ethics in Business Award at the 2012 World Forum for Ethics in Business for their efforts in the fields of environmental management and corporation social responsibility (Rhodes, 2016). Volkswagen became an example for all other companies to emulate which made the discovery of them deliberately designing a means to circumvent emissions control to provide a competitive advantage such a shock. When businesses adopt corporate social change and sustainable initiatives, they make decisions that are not consistent with previous strategic thinking and require additional data (Wilburn & Wilburn, 2016). In this Volkswagen case, they knew they wanted to retain their competitive advantage as an environmental emissions activist and became willing to cheat to keep it. The discovery found that Volkswagen installed devices in 482,000 of its diesel vehicles in the U.S., and 11 million worldwide to defeat emissions testing (Rhodes, 2016). This is a case in hypocrisy in social change responsibility because Volkswagen was notoriously an environmentally sustainable company and this was a staple in their strategic plan. The cheating eroded their reputation and proved that social change initiatives were competitive advantages corporations genuinely desired. 

Conclusion 

          Many corporations feel the need to incorporate aspects of social change into their business strategy. The social change could include monetary gifts, free promotions, or other means to advance a humanitarian type project positively. This week’s discussion began with the benefits of social change integration. It then analyzed the potential risks of injecting social change into a business strategy. It ended with the example of social change implementation gone wrong. Executive leaders should consider the image of the organization when seeking a way to bolster their image. If done correctly, the firm benefits from the venture and the social change benefits from the firm’s involvement.  

 

 

 

 

 

References

Bermudez, C. (2010). The new relationship between philanthropy and business. Chronicle of Philanthropy, (03). Retrieved from https://ezp.waldenulibrary.org/login?url=https://search.ebscohost.com/login.aspx?direct=true&db=edsgea&AN=edsgcl.241119143&site=eds-live&scope=site

Dyer, J. H., Godfrey, P., Jensen, R., & Bryce, D. (2016). Strategic management: Concepts and tools for creating real world strategy. Hoboken, NJ: John Wiley & Sons.

Ganescu, M. C. (2012). Corporate social responsibility, a strategy to create and consolidate sustainable businesses. Theoretical and Applied Economics, 11(576). 91-106 Retrieved from https://ezp.waldenulibrary.org/login?url=https://search.ebscohost.com/login.aspx?direct=true&db=edsdoj&AN=edsdoj.854eaaf628ad47018cdc389c5df8dc88&site=eds-live&scope=site

Harjoto, M., & Laksmana, I. (2018). The impact of corporate social responsibility on risk taking and firm value. Journal of Business Ethics, 151(2), 353–373. doi:10.1007/s10551-016-3202-y

McManus, T. (2008). The business strategy/corporate social responsibility “mash-up.” Journal of Management Development, 27(10), 1066–1085. Retrieved from https://ezp.waldenulibrary.org/login?url=https://search.ebscohost.com/login.aspx?direct=true&db=eue&AN=37215373&site=eds-live&scope=site

Rhodes, C. (2016). Democratic business ethics: Volkswagen’s emissions scandal and the disruption of corporate sovereignty. Organization Studies, 37(10), 1501–1518. doi:10.1177/0170840616641984

Shim, K., & Yang, S. U. (2016). The effect of bad reputation: The occurrence of crisis, corporate social responsibility, and perceptions of hypocrisy and attitudes toward a company. Public Relations Review, (1), 68. doi:10.1016/j.pubrev.2015.11.009

Sun, W., & Cui, K. (2014). Linking corporate social responsibility to firm default risk. European Management Journal, 32, 275–287. doi:10.1016/j.emj.2013.04.003

Vercic, A. T., & Coric, D. S. (2018). The relationship between reputation, employer branding and corporate social responsibility. Public Relations Review, 44(4), 444–452. doi:10.1016/j.pubrev.2018.06.005

Wilburn, K. M. & Wilburn, H. R. (2016). Asking “what else?” to identify unintended negative consequences. Bloomington, IN: Kelley School of Business. Retrieved from https://cb.hbsp.harvard.edu/cbmp/pl/71270434/71270440/25ef8a967418c3892bec38bff34ced98