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Value creation can improve human lives

Business wise: Dr Julia Roloff who heads the Centre for Responsible Business at ESC Rennes says that innovation and change management are two key processes through which MNCs can contribute to sustainable societies while remaining competitive in terms of business

education Updated: May 28, 2014 12:51 IST
Ayesha Banerjee

What are the biggest challenges facing businesses worldwide when it comes to ethical practices?
People all over the world have today higher expectations in terms of how much happiness, wealth and welfare they deserve as we are today able to compare our lives to those from completely different countries. We turn with these expectations not only to our governments, but also to our employers and to those big multinational corporations that we find today in almost every country. We believe that they have the power to help us in our quest for a better life.

Also we believe that businesses and large multinationals in particular are responsible for many of the problems we face: low wages and the exploitation of the vulnerability of employees and consumers, pollution and wasteful behaviours, unemployment and the financial greed of shareholders.

As a result we want businesses to behave better and to change the mindset with which their working: value creation means more than just making money.

Companies in all industries and countries face today the challenge to understand how they can contribute to sustainable societies and better lives and be a competitive business at the same time. This means to critically analyse the intended and unintended outcomes and effects of business activities and to change those that create significant negative impacts. As this cannot be done without innovation and change management this is a difficult and challenging process, but ultimately businesses have to undergo this process to survive

How popular are CSR practices worldwide? Can organisations do more?
When you look at the list of United Nation’s Global Compact participants, you do get the impression that businesses everywhere are doing CSR today and that they are led by the well-known large multinational enterprises. However, this picture is somewhat deceiving as although most large and many small and medium-sized companies claim today to engage in CSR, there is considerable variety in what they call CSR and to what extend their incorporate it in all their business practices.

Companies do over-and under report CSR activities. Over-reporting is also often called Greenwashing, that is when companies do a small CSR project and communicate it as a major contribution. Sometimes companies even downright lie about what they are and what they are not doing. For example they may claim that a product is ‘green’ or ‘healthy’ when it really is not.

However, I am also aware of many companies underreporting on their CSR activities. They underreport for example, because they think that what they do right now is not yet good enough to withhold public scrutiny. For example, companies that make an effort to buy only from ethical suppliers may not communicate this to their own customers, because they are afraid that some of their suppliers are cheating during audits. So if now one cheating supplier becomes public, the credibility of the whole programme may be questioned in the media and by consumers.

Nike faced this problem some years after it had introduced thorough supplier monitoring, when journalists discovered child labour at some Nike suppliers in Asia. Although much less workers were affected than in the 1990s when child labour allegations against Nike were all over the press, the reoccurrence despite all the effort made did hurt Nike’s reputation.

Cases such as Nike’s are the reasons why so many interesting CSR efforts are not made public. Some companies even under- and over-report on CSR at the same time. For example, they do not tell us how they improve their environmental performance gradually (because it was really bad), but they speak and write a lot about their philanthropic activities.

I wished that managers would be brave enough to tell us the truth about their CSR engagement. Because of all the over- and underreporting we have a completely distorted picture of what companies really do in CSR. The Greenwashing makes us cynical also about those efforts that are honest and serious. And the underreporting makes us believe that companies are not even trying to change the truly difficult problems such as labour and human rights violations along the supply chain and serious environmental impacts

Does the centre make efforts to keep organisations in France and other countries informed about its research work? Do organisations/businesses take advice from experts at the centre to formulate HR/other business policies? Do cite a few examples.

The members of Centre of Responsible Business do communicate their research to various audiences: academia, students—the future managers—and businesses. We do so at conferences, in teaching—including executive education, in workshops for practitioners and in trade journals.

Sometimes companies approach us for advice and as collaborators in research. For example, in the past years we advised a food company on improving its CSR programme and we collaborated with colleagues from the US and Mexico on advising a company in the extractive industry on their stakeholder management practices and their contribution to community development.

Getting advice on CSR is a sensitive subject for companies and in some cases they want to stay anonymous towards the public. We respect this need as confidentiality, as CSR is not only about making some positive contribution, it is also about avoiding harm, i.e. human and labour rights abuses, poor environmental performance and conflicts with stakeholders. Some managers chose to improve their company’s social and environmental performance before communicating their achievements to the public.
As a result, not everything that we are doing in our collaboration with companies is documented on the web site of the Centre for Responsible Business. We too sometimes underreport our CSR performance

Interesting areas of research and outcomes that you would like to highlight?
CSR research is very dynamic as it is still a comparable young field of study and what is a ‘hot’ research topic is changing quickly. Therefore, we try to address a wide variety to topics that are essential for businesses doing good and well, but all of them aim ultimately at improving management practices.

For example, we are looking into the question of how CSR practices can be implemented in the day-to-day business and throughout a larger organisation. This is an important question for large corporations which all pledge compliance to their codes of conduct but have to deal with the fact that not all employees and even departments fully support the non-financial values expressed in those codes.

In this context it is interesting how the characteristics, attitudes and behaviours of individual employees contribute to organisational and CSR performance. Our research investigate what kind of leaders are most effective, which kind of values and virtues are most conductive at the workplace and what is the impact of non-merit based human resource management practices. The aim is to advice managers on how to organise work in more responsible and effective ways inside the organisation.

In addition to this several researches study how good and bad business behaviour impacts the company’s reputation and legitimacy. This research is linked to our studies of stakeholder relationships, their implication for businesses and how they are best managed.

Further, we study the link between CSR and consumers’ expectations. Is CSR driven by consumer demands or is it driven by companies offering more sustainable and responsible products and services? These three streams of research allow us to make recommendations to managers on how to best manage relationships with actors outside the organisation.

A course that aids integration and insight

Mara Lederman, associate professor of strategic management Prof Lederman is the co-designer and co-teacher of the Capstone Course with Bernardo Blum, an associate professor of business economics at the Rotman School of Management.

Why is it called the Capstone course?
In an educational context, many programmes have Capstone courses which represent the culminating educational or intellectual experience of the programme. In our case, this course represents the culmination of the students’ first-year experience as it requires them to draw upon and integrate the knowledge and skills they have acquired throughout the first-year and apply them to a real problem from a real company. The problems are unstructured and unlike much of what students see in MBA problems, do not necessarily fit into neatly defined categories. That is, they mimic the types of problems they will encounter when they begin working. Yet, by having the students work on this type of problem through the course, they are given the opportunity to tackle one of these problems in a guided, developmental and educational way

When was it launched?
It ran for first time in Spring 2013 (course runs March to May each year)

Which course is it a part of and what does it aim at?
It is part of the first-year curriculum of Rotman’s two-year full time MBA programme. The aim of the course is to guide the students through the process of using Rotman’s model-based and data-based approach to problem solving to work on a real problem with real data from a real company. The course is part of a broader goal of Rotman’s curriculum which is to teach students how to approach business problems more scientifically and systematically using models and data. The students learn how to make logical arguments about the underlying mechanism behind problems (as opposed to the superficial ones) and how to validate their arguments and, in turn, their recommendations with evidence from data

Who designed it?
Prof Blum and I designed it. We wanted a course that came at the end of the year and that helped the students transition from their classroom experience to their internship experience. In particular, we wanted this course to help them develop three complementary skill sets that we believe are critical to success in today’s business world: (1) the ability to think rigorously, critically and creatively about problems and arrive at evidence-based solutions. In fact, this is why the course begins with two weeks of in-class sessions (2) the ability to do this on an unstructured and un-sanitised problem not a problem that has been prepped to be used as an in-class experience. This is why the course brings real problems and real data from real companies that neither the companies nor us as the professors know the answers to; and finally (3) the ability to effectively communicate their analysis and recommendations to multiple stakeholders. Thereby, the course integrates a module on business communication and requires the students to put their recommendations together in a variety of different vehicles targeted at different audiences

Which companies were involved in the project?
This year it was Labatt (which is part of ABInbev), Four Seasons Hotels, Kanetix and last year it was Labatt, BMO Bank of Montreal, Kanetix, Cancer Care Ontario

How were the students selected?
It is mandatory for all first-year students. At the end of the course, we select the best teams from each project to present their work to executives from the company

Their assignments? What were the industry problems they had to tackle?
The company (not industry) problems they had to tackle were highly varied. We can’t describe the problems in much detail because of the non-disclosure agreements we signed but the problems ranged from: helping one of the companies better understand customer loyalty, helping one of the companies understand why their market share predictably fell every summer and what to do to fix it, helping one of the companies reach the tipping point in online users and, in the case of Cancer Care Ontario last year, helping them come up with new ideas for reducing delays as patients move through different stages of Ontario’s health care system.

An important component of each of the projects was the use of quantitative data. Every partner organisation provided - as part of their project - a large amount of internal and confidential data. One of the goals of the course was to teach students how to integrate data into their analysis and come up with a more evidence-based set of recommendations

How many days did it cover? What did they have to do?
The course runs for six weeks. There are two weeks of in-class sessions where they learn Rotman’s unique model-based and data-based problem solving approach and practice using it. During this time, the companies come and present their problems to the students. The students then get to “bid” on the project that interests them. Once the projects are allocated, the students have 24 days to complete their project. During this time, every student group has a personalised coaching session with their professor (me or Bernardo) to describe their progress and get feedback.At the end, they put together a report, slide deck (for the company) along with a comprehensive executive summary.

Hear it from the students

Anand Inbasekaran,

I am a software engineer who pursued an undergraduate degree from Anna University, Chennai. Currently, I am interning with the technology innovation team at Procter & Gamble, Toronto.

Which company did you work on?

What was the most difficult part?
Integrative thinking

What did you learn?
I learnt how to solve business problems through defining models based on data insights

How much time did you spend out of the classroom?
Once I spent a continuous eight deriving data insights. I had also spent around five hours looking for external information

How many presentations did you make?
We made one presentation but we revised the presentation at least 10 times

How did your brainstorm with your group?
We adopted the brainstorming model from business design methodology whereby no one rejects an idea upfront

What was the outcome?
Our analysis was deemed the best analysis and we will be presenting it to the CEO of Kanetix

Hear it from the students

Rohan Bedmutha,

I pursued my Masters degree in Canada in the year 2006. I am currently working as marketing intern at Procter & Gamble.

Which company did you work on?

What was the most difficult part?
Asking the right questions

What did you learn?
Forming hypotheses and testing hypotheses

How much time did you spend out of the classroom?
Close to 60 hours

How many presentations did you make?
Just one presentation

How did your brainstorm with your group?
The group chose two hypotheses.

What was the outcome?
A solution which is simple to implement.