Csr Systematic Long Term Performance Improvement - Handout

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CSR Training Workshop for Industries

Corporate Social Responsibility Training Workshop for Industries – Long

term performance improvement through CSR integration –

As part of the European Commission supported SME business development project on Empowering Asian Business Intermediaries through Knowledge-based Networking Focused on Sustainability Management (EMPASIA)

Müller, Opierzynski CSR Training for Industries, 2009

CSR Training Workshop for Industries Learning objectives of the CSR training 1.

Understand how organizations strategically manage CSR

2.

Reveal how organizations can strategically create their competitive advantage through CSR not only with consumers and investors, but with current and future employees

3.

Getting started with open source ICT tools for business management support

4.

Starting an ongoing learning process among the participants

Corporate Social Responsibility (CSR) – background and business context Systematic integration of CSR – process model and tools Getting started with CSR – Interactive Group Work Introduction of Redmine – Interactive Group Work „using redmine for project implementation“

Müller, Opierzynski CSR Training for Industries, 2009

CSR Training Workshop for Industries

Background, definitions and drivers

Müller, Opierzynski CSR Training for Industries, 2009

CSR Training Workshop for Industries Sustainable development

Basis for current sustainability discussion: 1987 Report of the United Nations World Commission on Environment and Development “Our Common Future” a.k.a. “Brundtland Report” “Humanity has the ability to make development sustainable - to ensure that it meets the needs of the present without compromising the ability of future generations to meet their needs.” 1992 Rio Declaration on Environment and Development, and the subsequent establishment of the “AGENDA 21”

What exactly does “Sustainability” mean and what does it entail for businesses?

Source: http://www.worldinbalance.net/pdf/1987-brundtland.pdf

Müller, Opierzynski CSR Training for Industries, 2009

CSR Training Workshop for Industries Historical background of Sustainability – from forestry to mainstream •

Hans Carl von Carlowitz (1645-1714) – Mining Administrator for the Kingdom of Saxony – Silver mining was backbone of economy – Timber valuable but scarce resource for mining



Drafting of one of the first forestry treatise – 1713 Sylvicultura Oeconomica



Two-fold strategy to secure timber supply – Demand-side – promotion of wood saving innovations – Supply-side – promotion of sustainable forestry



Timber should only be taken in relation to the forest’s ability to regenerate – Promotion of long-term viability vs. short-term profit www.zeit.de/1999/48/Der_Erfinder_der_Nachhaltigkeit http://en.wikipedia.org/wiki/Hans_Carl_von_Carlowitz

Müller, Opierzynski CSR Training for Industries, 2009

CSR Training Workshop for Industries Current views and definitions

Sustainability Management

Corporate Social Responsibility

managing resources and its impact in an environmentally friendly, socially responsible and economically wise way (‘Triple Bottom Line’ concept – maximization of economic, environmental and social performance)

Approach to give a frame for businesses to express their commitment to society. voluntarily integration of social and environmental issues into all business activities beyond regulations (corporate nomenklatura for Sustainability Management) • Internally (from health and safety to responsible use of resources and adaptation to change (innovation) •Externally – from social handling of community, stakeholder relations to human rights and global environmental protection European framework, Green Paper on corporate social responsibility

Müller, Opierzynski CSR Training for Industries, 2009

CSR Training Workshop for Industries Reasons for Sustainability Management – Why? Sustainability strategy "safeguard" - reducing and managing risks ¾ Sustainability-induced problems and challenges e.g. climate change, poverty etc. are tackled by the political system, markets or the public ¾ Risks could affect the financial, managerial or reputation of corporations ¾ Goal - securing the existing markets and the position in the markets Sustainability strategy "credibility" - enhancing credibility and reputation ¾ Credibility and reputation is a valuable non-tangible asset (also for situation of crisis) ¾ Prevention of conflicts with authorities and stakeholders ¾ Attraction of suitable employees and satisfaction of customers ¾ Defensive focus (communication with stakeholders) e.g. MNCs or industries like chemicals, pharmaceuticals, military, oil, automotive ¾ Offensive focus (sustainable products and services), e.g. food, textile, finance ¾ Good corporate citizenship is a sound investment Müller, Opierzynski CSR Training for Industries, 2009

CSR Training Workshop for Industries Systematic integration of CSR issues into business operation – Why? Sustainability strategy "efficiency" - enhancing productivity and efficiency ¾ Enhancing eco or socio efficiency of business processes ¾ Cost reduction through resource efficiency ¾ Productivity improvements through work conditions and job satisfaction Sustainability strategy "innovation" - differentiating in the market ¾ Creation of sustainable products and services with unique selling point ¾ Increase of sales and margins through environmentally and socially friendly product innovations ¾ Advantages through Sustainability in production, consumption or disposal phase ¾ needs to be strongly communicated ¾ e.g. organic food, textiles – healthy; car sharing - easy, green energy – less risky, fair trade Sustainability strategy "transformation" – developing markets and society ¾ Transformation / creation of new markets transforming human needs and consumption pattern ¾ Requires institutional changes within human needs, politics or institutional framework ¾ Proactive lobbying participation in political committees, standard creation etc

Müller, Opierzynski CSR Training for Industries, 2009

CSR Training Workshop for Industries Social Responsibility – working draft 4.1 ISO 26.000

Responsibility of an organization for the impacts of its decisions and activities (products, services and processes ) on society and the environment, through transparent and ethical behavior that: ¾ Takes into account the expectations of stakeholders ¾ Is in compliance with applicable law and consistent with international norms of behavior ¾ Contributes to sustainable development, health and the welfare of society ¾ Is integrated throughout the organization and practiced in its relationships

http://iso26000.jsa.or.jp/_files/doc/2008/iso26000_wd4.1.pdf

Müller, Opierzynski CSR Training for Industries, 2009

CSR Training Workshop for Industries

Guideline Social Responsibility – working draft 4.1 ISO 26.000

Müller, Opierzynski CSR Training for Industries, 2009

CSR Training Workshop for Industries Reasons and impacts of CSR ¾ Address the link between the stakeholders’ interests and the responsibilities of the organization ¾ Determine how best to increase the beneficial impacts of the organization’s activities and how to decrease any adverse impacts ¾ Fulfill legal obligations (e.g. to shareholders or to employees) and address conflicting interests (between the organization and the stakeholder or between various stakeholders) ¾ Reconcile conflicts of interests ¾ Improve decision making through better understanding of impact and consequences of actions ¾ Contribute to continuous learning by the organization ¾ Provide the organization with the benefits associated with obtaining diverse perspectives ¾ Help an organization review its performance so it can improve it ¾ Increase transparency and the credibility of its communications ¾ Provide a basis for cooperative activity such as partnerships

Guideline Social Responsibility – working draft 4.1 ISO 26.000

Müller, Opierzynski CSR Training for Industries, 2009

CSR Training Workshop for Industries Examples of standards which contribute to CSR

Management standards – Environmental Management • ISO 14000 Family • EMAS (European Union) – Quality Management • ISO 9000 Family • EFQM model for Business Excellence

(European Foundation for Quality Management)

Workplace standards – SA8000 (Social Accountability International) – ILO-OSH-2001 (International Labor Organization) – OHSAS 18001 (various worldwide Standardization Bodies)

Reporting standards -

GRI - www.globalreporting.org

Social standards – ISO 26000 forthcoming 2009 – AA1000 (AccountAbility) – Fair Trade Labeling Organization – BSCI (Business Social Compliance Initiative) Industry standards – Textile • ÖkoTex Standard 100Plus • Purewear • European Eco-Label

Müller, Opierzynski CSR Training for Industries, 2009

CSR Training Workshop for Industries BSCI Code of Conduct / แนวทางปฏิบัต ิข อง BSCI ¾ Aims to attain compliance of MNC and their suppliers with social and environmental standards ¾ In accordance with international conventions and laws (ILO Conventions, UN Universal Declaration of Human Rights, UN Conventions on children's rights and the elimination of all forms of discrimination against women, UN Global Compact, OECD Guidelines for Multinational Enterprises)

1. 2. 3. 4. 5. 6. 7. 8. 9. 10.

Legal compliance Freedom of association Prohibition of discrimination Compensation Working hours Workplace health and safety Prohibition of child labour Prohibition of forced labour Environment and safety issues Management systems

1. 2. 3. 4. 5. 6. 7. 8. 9. 10.

การปฏิบตั ติ ามกฏหมาย เสรีภาพในการรวมตัวและสิทธิในการตอรองรวมกัน หามมีการเลือกปฏิบัตใิ นทุกรูปแบบ การจายคาจางตอบแทน ชัว่ โมงการทํางาน สุขภาพและความปลอดภัยในทีท่ ํางาน การหามการใชแรงงานเด็ก การหามบังคับใชแรงงานและลงโทษ ประเด็นดานสิง่ แวดลอมและความปลอดภัย บริษทั ผูจดั การระบบการผลิต www.bsci-eu.com/

Müller, Opierzynski CSR Training for Industries, 2009

CSR Training Workshop for Industries

CSR surveys on practice, drivers on benefits Stiftung Warentest, Case Work March 09 (19 organisations) EU project EMIT CSR, Malaysia 07 (ca. 50 organisations) KPMG's International Survey of CSR Reporting 05 (ca. 1.600 organisations) McKinsey, CSR value study 09 (ca. 80 organisations, 150 investment professionals

Müller, Opierzynski CSR Training for Industries, 2009

CSR Training Workshop for Industries Consumer group CSR evaluation schema by ‘Stiftung Warentest’ ¾ societal and scientific opinion-forming processes of responsible corporate behavior ¾ national/internat. conventions, standards and guidelines for responsible corporate behavior ¾ criteria used within the framework of consumer-oriented company surveys ¾ criteria used for socially responsible investment ¾ criteria used in environmental, social and sustainability reporting by companies

Social Issues / Employees 1. Guiding principles and corporate policy 2. Management and measures 3. Implementation 4. Reporting

The Environment 1. Guiding principles and corporate policy 2. Management 3. Measures and implementation 4. Reporting

Social Issues / Production and Supplier

Consumers and Society

1. Guiding principles and corporate policy 2. Management and measures 3. Implementation 4. Reporting

1. Willingness to provide information 2. Community involvement www.test.de http://en.wikipedia.org/wiki/Stiftung_Warentest

Müller, Opierzynski CSR Training for Industries, 2009

CSR Training Workshop for Industries ‘Stiftung Warentest’ – Case Work March 09 Organisations by sector (Th, 19)

Manufacturing Education

Autom otive

Organisations by employees

Health and social work

less than 50 501 - 1000

other

Own CSR Department

Cross-functional Collaboration

51 - 250 more than 1000

251 - 500

No organisational CSR structure

Müller, Opierzynski CSR Training for Industries, 2009

CSR Training Workshop for Industries Attitude and commitment on social issues Commitment is explicetely expressed Avoid active or passive corruption and bribery in business Com plying with international m inim um social standards (e.g. Code of Conduct) Com pliance with the OHS standards throughout the com pany is explicitly expressed Prom otion of the integration of foreign em ployees / m inorities / different religions Prom otion of equal opportunities for wom en and m en is explicitly expressed Prom otion of training and further education is explicitly expressed Prom otion of health and safety at work is explicitly expressed Internal statem ents on corporate responsibility are accessible Public statem ents concerning responsibilities towards its em ployees Detailed guidelines or principles on responsible treatm ent of the em ployees 0%

com prehensively

largely

partially

5%

10% 15% 20% 25% 30% 35% 40% 45% 50%

inadequately

Müller, Opierzynski CSR Training for Industries, 2009

CSR Training Workshop for Industries Social Issues / Employees – measuring results of implementation Measuring employee satisfaction Details of em ployee absenteeism are system atically recorded and analysed Measures for im provem ents are introduced on the basis of these results Em ployees are inform ed of the results by publication Em ployee satisfaction is m easured regularly Em ployee satisfaction is m easured for all em ployees 0%

com prehensively

largely

5%

partially

10%

15%

20%

25%

30%

35%

40%

inadequately

Number and development of accidents at work in the company

Greater share or the number of workplace accidents has decreased Average share or no change Number of workplace accidents has decreased Lower share 0%

10%

20%

30%

40%

50%

Müller, Opierzynski CSR Training for Industries, 2009

CSR Training Workshop for Industries Supply chain management - social issues Supply chain management - social issues There is a com plaints office for em ployees at the production site Ensuring com pliance of sub-contractors with m inim um social standards Preference is given to certified / audited sub-contractors (e.g. SA8000, BSCI) The com pany offers free advice and training for em ployees at his production sites The com pany offers free advice and training for buyers and sub-contractors Non-com pliance results in the im plem entation of certain m easures and sanctions if applicable Com pliance with social standards is regularly surveyed Com plying with m inim um social standards is a pre-requisite for every signed delivery contract 0%

com prehensively

largely

5%

10%

15%

20%

25%

30%

35%

partially

Reporting on such topics No reporting on such topics 0%

5% 10% 15% 20% 25% 30% 35% 40% 45% 50%

Müller, Opierzynski CSR Training for Industries, 2009

40%

CSR Training Workshop for Industries Environmental performance

Status of environmental protection Motivation system to im prove environm ental perform ance in production and acquisition Em ployees are actively involved in environm ental protection throughout the com pany Environm ental indicators are defined in order to m onitor achievem ent of targets Measurable environm ental targets have been approved Responsibility for environm ental protection concerns is integrated in product developm ent Responsibility for production process related environm ental protection is allocated A specific organisational unit is responsible for environm ental protection within the com pany Responsibility for environm ental protection is allocated within the m anagem ent 0% com prehensively

largely

10%

20%

30%

40%

50%

partially

Müller, Opierzynski CSR Training for Industries, 2009

60%

CSR Training Workshop for Industries Monitoring / publishing of company data on material and energy consumption Environmental performance measurement Other data: transportation kilometres, noise, production accidents, complaints from the neighbourhood Waste: total quantity, composition, hazardous waste Water emissions: waste water quantity and pollution (especially COD, heavy metals) Air emissions: climate relevant pollutants (CO2), nitrogen oxides, sulphur dioxide, airborne dust Water: use in production / manufacture (industrial water), drinking water consumption Energy: consumption data according to energy source, share of regenerative energy Materials: consumption of raw and process materials (absolute quantities) 0% Data is collected from several areas and published

Data is collected from some areas and published

5% 10% 15% 20% 25% 30% 35% 40%

Data is collected from a few areas and published

Data of material and energy consumption is not collected and published

Müller, Opierzynski CSR Training for Industries, 2009

CSR Training Workshop for Industries Complaint management system to increase customer satisfaction

Customer complaints All custom er com plaints are docum ented and system atically evaluated Open custom er inform ation on com plaints Em ployees are given regular training in dealing with custom er com plaints Fulfillm ent of defined standards is regularly m onitored and m easured Defined targets for dealing with com plaints and actively com m unicates them to em ployees W ritten declaration of service and quality standards for custom er com plaints W ritten declaration of responsibility within the organisation for com plaint m anagem ent 0%

com prehensively

largely

5%

10%

15%

20%

25%

30%

partially

Müller, Opierzynski CSR Training for Industries, 2009

CSR Training Workshop for Industries Consumers and society - community involvement

Community support Participation in Local Agenda processes Prom otion of projects, which im prove OHS of the em ployees of sub-contractors or suppliers Sponsoring or support of training/educational establishm ents for the em ployees of sub-contractors Regular tim e off for em ployees for charity work Sponsoring of cultural events and am ateur sports Annual donations in the form of m oney, m aterial goods or services for environm ental, social aim s 0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50% com prehensively

largely

partially

inapplicable

Müller, Opierzynski CSR Training for Industries, 2009

CSR Training Workshop for Industries Why is your company interested in applying CSR? Company - CSR Driver Community pressure Attraction of new investors or customers Competitive pressure Philanthropy Information demand by stakeholders Differentiation opportunities Legal- or regulatory obligations Environmental concerns relating to products or service Social concerns relating to products or service Improving Business Performance

0%

10% 20% 30% 40% 50% 60% 70% 80% EU project EMIT CSR, Malaysia, 2007 - 2008

Müller, Opierzynski CSR Training for Industries, 2009

CSR Training Workshop for Industries Market forces that could drive the need for organizations to address CSR 1. Economic considerations 2. Ethical considerations 3. Innovation and learning 4. Employee motivation 5. Risk management or risk reduction 6. Access to capital or increased shareholder value 7. Reputation or brand 8. Market position or share 9. Strengthened supplier relationships 10. Cost savings

KPMG's International Survey of CSR Reporting (2005). This report surveyed more than 1,600 companies worldwide and documented the top ten motivators driving corporations to engage in CSR for competitive reasons.

Müller, Opierzynski CSR Training for Industries, 2009

CSR Training Workshop for Industries Valuing corporate social responsibility

Müller, Opierzynski CSR Training for Industries, 2009

CSR Training Workshop for Industries

Müller, Opierzynski CSR Training for Industries, 2009

CSR Training Workshop for Industries

Müller, Opierzynski CSR Training for Industries, 2009

CSR Training Workshop for Industries

Müller, Opierzynski CSR Training for Industries, 2009

CSR Training Workshop for Industries Consequences for action 1.

Potential for shareholder value from environmental, social, and governance programs needs to be better understood.

2.

Stakeholders needs and demands are the base for meaningful changes.

3.

Applying systematic performance evaluation (data gathering, evaluation and corrective action) can drive systematic improvement

4.

The integrating of effects and impacts of environmental, social, and governance programs with the rest of the company’s finances / performance assessment is crucial.

5.

The role of employees in the value adding process can be enhanced through CSR.

6.

Opportunities of environmental, social, and governance programs to create new revenue streams is not sufficiently recognized. Holistic integration of CSR issues in business planning and reporting is the base to tap these opportunities.

7.

Communication and corporate culture are keys to CSR.

Müller, Opierzynski CSR Training for Industries, 2009

CSR Training Workshop for Industries

CSR – making profit with a clear conscience!

Involves every aspect of an organization, like ¾

Governance

¾

Environmental sustainability

¾

Risk management

¾

Workplace issues

¾

Cultural norms

¾ ¾

Local laws and customs ….

Müller, Opierzynski CSR Training for Industries, 2009

CSR Training Workshop for Industries Further reading ¾ Green Paper on Promoting a European framework for Corporate Social Responsibility, European Commission, 2001 ¾ ISO 26.000 ‘Guidance on Social Responsibility, ISO/TMB/WG SR N 137, 2008.03.11 ¾Mapping instruments for corporate social responsibility, European Commission, DirectorateGeneral for Employment and Social Affairs, 2003 ¾ Valuing corporate social responsibility, McKinsey Global Survey Results, Value and effects of CSR, survey among CFOs, investment professionals and CSR professionals, 2009 ¾ Corporate sustainability: What is it and where does it come from?, Mel Wilson, Ivey Business Journal Online, 2003 ¾Sustainability Management in Business Enterprises, Concepts and Instruments for Sustainable Organisation Development, Schaltegger, Herzig, Kleiber, Müller, published by The Federal Ministry for the Environment, Nature conservation and Nuclear Safety (BMU), Division for Environment and Economy, Eco-Audit

Müller, Opierzynski CSR Training for Industries, 2009

CSR Training Workshop for Industries Further reading, information and networking – www.sustain-asia.org

Müller, Opierzynski CSR Training for Industries, 2009

CSR Training Workshop for Industries

Systematic integration of CSR into business operation

Müller, Opierzynski CSR Training for Industries, 2009

CSR Training Workshop for Industries

Performance Controlling

Reporting

Assessment

Continuous Improvement

Müller, Opierzynski CSR Training for Industries, 2009

CSR Training Workshop for Industries

Strategy Development

Internally directed analysis of own company (e.g. SWOT) Externally directed analysis of - Industry - Markets - Environment

Formulation of the company’ company’s core reason to be. Definition of corporate values Definition of corporate culture

Formulation of midmid- and longlong-term plan of action to - fulfill the company’ company’s mission, - while taking account the company’ company’s capabilities (internal analysis) and it’ it’s competitive environment (external analysis)

Müller, Opierzynski CSR Training for Industries, 2009

CSR Training Workshop for Industries Implementation Planning

Using the Balanced Scorecard approach to break down business strategies (Kaplan & Norton)

Financial perspective Which financial objectives have to be fulfilled to implement the strategy

Internal process p.

Customer perspective How the company wants to be seen by the customer

Vision & Strategy

How do internal processes have to change to implement the strategy

People & knowledge p. What employees and the organisation have to learn implement the strategy

Müller, Opierzynski CSR Training for Industries, 2009

CSR Training Workshop for Industries Company Medium-Term Strategy Increase the company’s profits by international expansion and differentiation through sustainability Financial Perspective

Move products up market to increase profit margin for own branded products.

Customer Perspective Be recognized as sustainable company

Internal Process Perspective

Green production process

Increase business transparency

Provide (own-branded) products tailored to customers’ needs and tastes Develop and introduce right products to the right markets

Increase flexibility of production

People and Knowledge Perspective Foster a company culture of sustainability

Ensure production staff can perform tasks environmentally responsibly

Move to knowledge based value creation

Improve business communication

Müller, Opierzynski CSR Training for Industries, 2009

CSR Training Workshop for Industries Financial Perspective Goal Increase profit margin for ownbranded products

Key issues • Profit margin • Production costs • Selling price • Overhead costs

Target • +50 percent • -10 percent • +60 percent • -5 percent

Activity Align company processes to sustainability principles to differentiate products and create added value for customers

Müller, Opierzynski CSR Training for Industries, 2009

CSR Training Workshop for Industries

Goal Goal

Financial Perspective Customer Perspective KPIs Target Key issues Target

Increase profit • Profit margin Be recognized as • Positive media margin for own• Production costs a sustainable reports branded products • Selling price company • Overhead costs • Consumer survey score • Marketing budget Provide products tailored to customers’ needs

• Customer satisfaction • Loyalty ratio (rebuy rate)

• +50 percent • 6 reports in • -10 percent local, 3 in • +60 percent international • -5 percent media • +35 percent • +25 percent

• +50 percent • 50 percent

Activity Activity

Align company processes to Use PR instruments to sustainability principles to communicate company’s differentiate products and commitment to sustainability. create added value for Develop co-branding/co-selling customers strategy with sustainable products.

Engage customers to survey needs and identify trends, focus also on buying habits.

Müller, Opierzynski CSR Training for Industries, 2009

CSR Training Workshop for Industries Financial Perspective Customer Perspective KPIs Target Process Perspective KPIs Target

Goal Goal Increase profit margin Goal as • Profit Key issues Be recognized • Positive media

Activity Activity • +50 percent Align company processes to Target Activity • 6 reports in Use PR instruments to

margin for own• Production costs • -10 percent sustainability principles to a sustainable reports local, 3 in communicate company’s Green production • Recycled materials • 40 percent Analyzeproducts production branded products • Selling price • +60 percent differentiate andprocess company international commitment to sustainability. processes as input a holistic perspective and • Overhead costs • -5 percent createfrom added value for media Develop co-branding/co-selling • Hazardous • Decrease or customers identify potential to green the • +35 percent to 10 strategy with sustainable • Consumer materialssurvey substitute production process, e.g. • +25 percent products. score percent through substitution, reduction • Marketing • Energy budget • Use 40 percent and avoidance . consumption from RES Provide products • Customer • +50 percent Engage customers to surveythrough Flexibility of • Lead-time • -10 percent Improve order planning tailored to satisfaction needs and identify trends, focus production • Set-up time • -15 percent effective customers involvement customers’ (re• 50• -20 percent also on buying habits. processesneeds • Loyalty • Time ratio to customer percent (design) buy rate) Training of staff, Optimization of internal and external logistic, optimize supplier management

Müller, Opierzynski CSR Training for Industries, 2009

CSR Training Workshop for Industries Financial Perspective Customer Perspective KPIs Activity ProcessTarget Perspective KPIs Target Activity People and Perspective • Profit margin • +50Knowledge percent company processes KPIs Target Align Activityto

Goal Goal Increase profit Goal as • Positive media Be recognized • 6 reports in Use PR instruments to margin for own• Production costs • -10 percent sustainability principles to Goal Keymaterials issues local, Activity a sustainable reports in Target communicate company’s Green production • Recycled • 40 3 percent Analyze production process

branded products • Selling price • +60 percent differentiate products and company international commitment to sustainability. processes as input a holistic perspective and Improve • Training • 6 hours / month Provide production related • Overhead costs of staff• -5 percent createfrom added value for media Develop co-branding/co-selling • Decrease or / year identify potential the knowledge based • Hazardous • 2 courses training, set upto ofgreen knowledge customers • +35 with sustainable materialssurvey substitute to 10 strategy production process, e.g. Value value creation • Consumer •percent 30% increases management system, • +25 percent score percent through reduction of CIP impact products. addedsubstitution, products through new • Marketing budget • Energy • Use 40 percent and avoidance . • 25 % increase to designs • R&D costs consumption from RES production cost Provide products • Customer • +50 percent Engage customers to survey Flexibility • Lead-time • -10 percent Improve order planning Cultureofof • Employee • 85 percent Anonymous employeethrough survey to tailored to satisfaction needs and identify trends, focus production • Set-up time • -15 percent effective customers involvement sustainability satisfaction identify customers’ ratio (re• 50• -20 percent also on buyingproblems, habits. set up of processesneeds • Loyalty • Time to customer percent (design) • Improvement by • 15 suggestions incentive schema, CIP buy rate) Training of staff, employees per quarter networking events, Optimization of internal and • Recruitment of • +20 percent communication platform, external logistic, optimize Univ. Gradates applications improving working atmosphere supplier management

Müller, Opierzynski CSR Training for Industries, 2009

CSR Training Workshop for Industries

Performance Controlling

Reporting

Assessment

Continuous Improvement

Müller, Opierzynski CSR Training for Industries, 2009

CSR Training Workshop for Industries Development of a CSR Performance Assessment Systems

Assessment Plan

Goal system for the company Activity specification Stakeholder engagement

Assessment Procedure

Defined procedure (reporting cycles, assessment meetings) Responsibilities / competences Standard key performance indicators Change management plan for improvements Communication plan Review procedure

Assessment Reports

Types Content Structure Reporting

Monitoring, benchmarking, audit / internal/external KPIs, benchmarks, goal achievement, improvement monitoring Specific definition, graphics, results Publication, frequency, work flow

Müller, Opierzynski CSR Training for Industries, 2009

CSR Training Workshop for Industries Performance assessment / closed-loop controls

Company

Production Area

Information flow

Top Management

Area 1

Department 1

Department 2

Closed Loop

Closed Loop

Area 2

Department n

Department

Area n

Material Flow

Closed Loop

Müller, Opierzynski CSR Training for Industries, 2009

CSR Training Workshop for Industries Procedures, Responsibility and Competences Ways of decisions

Ways of communication

CEO Director Manager Master Forman Employee A

B

levels

เกรงใจ graengdjai ??

Interfaces Müller, Opierzynski CSR Training for Industries, 2009

CSR Training Workshop for Industries Challenges for CSR activity implementation & performance controlling ¾ Established management structures and processes ¾ Hierarchical power, prestige, career related interests of employees employees etc. ¾ Assumptions, thoughts and beliefs of employees regarding goals and activities ¾ Insecurity and rejection caused by transparency and quantitative quantitative controlling ¾ etc. ¾ Strong commitment from top management ¾ Creation of awareness and open mindmind-set of employees (internal acceptance) ¾ Proactive approach to tackle potential mental reservations of employees employees ¾ Establishing a discoursediscourse-oriented infrastructure (e.g. internal discussion on activities before implementation) ¾ Involvement of various functions and departments ¾ Consideration of micromicro-political issues (influence and hierarchical power) ¾ Integration into general management (avoid separation of management management systems!) ¾ Regular revision according to performance and changes in corporate corporate strategy ¾…

Müller, Opierzynski CSR Training for Industries, 2009

CSR Training Workshop for Industries Further reading / listening ¾ Leveraging the Balanced Scorecard for Social Responsibility and Reporting, Michael E Nagel, Balanced Scorecard Collaborative, Inc., 2005, webcast (Why the Balanced Scorecard is a powerful tool for managing and communicating corporate social responsibility) ¾Sustainability management with the Balanced Scorecard, Thomas Bieker, Institute for Economy and the Environment at the University of St. Gallen (IWOe-HSG)

Müller, Opierzynski CSR Training for Industries, 2009

CSR Training Workshop for Industries

ICT and business management

Müller, Opierzynski CSR Training for Industries, 2009

CSR Training Workshop for Industries Ensuring business performance and competition levels From resource and labor intensive to more knowledge based production pattern through adaptation of advanced business management practices

World Bank ranking Thailand – overall business efficiency index versus knowledge economy index 34 – 56 (business performance versus base for economic success) ¾ Total Factor Productivity (TFP) is regarded as technical productivity Statistical method to determine economic development drivers Technology growth and efficiency main sub-sections of TFP ¾ Knowledge economy index reflects ability to employ technological progress for economic prosperity World Bank survey of over 20.000 businesses in low- and middle-income countries Result: companies using ICT were found to have 60% higher profits and 15% higher reinvestment rates, the value added per employee was about 3.400 US$ higher (average base of value added per employee / a: 7.000 US$). The Global Competitiveness Index rankings, 2007–2008 comparisons, World Economic Forum The Role of ICT in Doing Business, Information and Communications for Development, 2006, World Bank, www.worldbank.org/ic4d

Müller, Opierzynski CSR Training for Industries, 2009

CSR Training Workshop for Industries Adaptation of advanced business management – key areas and approaches ¾ Strategic business management – CSR CSR – holistic and strategic management approach to lead towards environmental-friendly and socially advanced businesses, Integration of environmental and social factors meaningful into business practices ¾ Operational business management – Resource Management process management approaches to enable effective planning and efficient use of environmental related resources (Process Monitoring & Controlling and Enterprise Resource Planning) ¾ Performance evaluation – Environmental Cost Accounting and Investment Appraisal activity based, physical and monetary accounting for impact and opportunity quantification enables fundamental decision support through quantification of environmentally related costs and investment opportunities (e.g. technology evaluation) ¾ Communication and business culture which contribute to organisational learning Cross-functional methods, e.g. Continuous Improvement Processes, Knowledge Management, Stakeholder Relationships Management

Müller, Opierzynski CSR Training for Industries, 2009

CSR Training Workshop for Industries General requirements for the adaptation of advanced business management

¾ Enhancing creativity and know-how of employees ¾ Enhancing organizational learning ¾ Systematic comprehensive and targeted communication ¾ Creating transparency and managerial awareness of business processes Both, transparency and awareness depend on the ability of companies (particularly SMEs) to collect, process, and analyze respective data

Hence, modern business management depends on availability and efficiency of corresponding systems for data processing system (so-called advanced ICT)

Müller, Opierzynski CSR Training for Industries, 2009

CSR Training Workshop for Industries Reasons for insufficient level of ICT adoption Poor service of support infrastructures result in limited business access and low application levels

While basic infrastructures and ICT equipment are accessible in Thailand, service and support infrastructures are underdeveloped.

Most advanced ICT products are designed for larger firms, not SMEs

ICT firms used to target large enterprises (budget, HR to run state-of-the-art ICT). These products are often too expensive and too complex for SME users.

Limited ICT literacy of SME owners hinders their ability to choose

Many SME owners are unfamiliar with operating a computer, skeptical of the concrete benefits for the core business, and share the stereotype that advanced ICT is only for larger companies.

Limited ICT literacy of employees in SMEs hinders ICT adoption

Even if SME owners have a strategic understanding of why they should adopt ICT, their staff is often poorly trained. Training costs both time and money – resources that SMEs usually lack.

Adopting ICT is not a technical challenge

ICT is a difficult task for companies of all sizes, whether they are in developed or developing countries. The main challenge is, it must go along with organizational and structural changes in companies.

Lack of financing options limits SME ability to purchase ICT

IT budgets are usually small or nonexistent. In addition, adopting ICT is not a onetime cost because there are ongoing costs of maintaining and upgrading hardware and software, and human capacity building.

Müller, Opierzynski CSR Training for Industries, 2009

CSR Training Workshop for Industries ICT for business management Sustainable business success needs adequate controlling and supporting systems. A large number of Thai companies are not prepared for the future! ? (IT&C FORCE 04) IT systems used to support controlling and management tasks and real benefit (or benefit from future use) Business assessment based on indicator Process monitoring with indicator Internal communication Internal documentation In-house gap analysis Representation and analysis of material flows Simulation of processes Preparation of material and energy balances External documentation/communication Recycling or waste exchange Definition of environmentally oriented objectives 80%

60%

40%

in use

20%

0%

not in use

0%

20%

40%

60%

80%

100%

very great and great

Müller, Opierzynski CSR Training for Industries, 2009

CSR Training Workshop for Industries Selected advanced ICT for business management Examples for advanced ICT

SM approach

Function

Link

Open Bravo, SoFi

Resource Management, CSR, Environmental Cost Accounting

Indicator based process monitoring from manufacturing process to supply chains and Enterprise Resource Planning

http://forge.openbravo.com, www.pe-international.com/sofi

Redmine

Environmental Management, CSR

Workflow management for continuous improvement processes

www.redmine.org/

Umberto

Resource Management, Environmental Investment Appraisal

Material and energy flow analysis, process simulation

www.umberto.de/en

Drupal, SugarCRM

Stakeholder Relationship Management

Internal / external communication, stakeholder involvement (CRM)

http://acquia.com/productsservices/acquia-drupal , www.sugarcrm.com

E-Front, Elgg

Knowledge Management, eLearning for business

web 2.0 e-learning and knowledge management for businesses, Internal / external communication

www.efrontlearning.net http://community.elgg.org

Müller, Opierzynski CSR Training for Industries, 2009

CSR Training Workshop for Industries Resource flow analysis

www.modiconsult.com

Müller, Opierzynski CSR Training for Industries, 2009

CSR Training Workshop for Industries Open Source Software ¾ Computer software for which the source code are provided under a variety of software license License examples: Apache License, GNU General Public License, GNU Lesser General Public License, MIT License GNU General Public License most popular (about 2/3 of projects listed on SourceForge.net) ¾ Permits users to use, change, and improve the software under specified conditions ¾ Permits to redistribute it in modified or unmodified forms under specified conditions ¾ Often developed in public or collaborative manner web-based source code repositories offer centralized location for developers to control and manage open source software development projects e.g. SourceForge, world largest development site, more than 230,000 projects with over 2 million registered users, 34 million unique visitors each month ¾ Linux, MySQL, Firefox, WordPress, xt:commerce, Elgg, OpenOffice, Redmine … http://en.wikipedia.org/wiki/Open_Source_Definition http://sourceforge.net/ http://opensource.yeebase.com/top100

Müller, Opierzynski CSR Training for Industries, 2009

CSR Training Workshop for Industries Redmine - www.redmine.org ¾ Flexible project management web application to manage, document and track work ¾ Written in Ruby on Rails framework ¾ Open source and released under the terms of the GNU GPL v2 ¾ Multiple data base support Issue management system Refers to the discipline and process of managing business tasks Workflow, communication support and controlling Typical application: complaint, suggestion and project management ¾ Main features: Multiple projects support, flexible role based access control Flexible issue tracking system, news, documents & files management Feeds & email notifications, per project wiki and forums Time tracking, custom fields for issues, time-entries, projects and users Multilanguage support, Multiple databases support (MySQL, PostgreSQL or SQLite)

Müller, Opierzynski CSR Training for Industries, 2009

CSR Training Workshop for Industries Redmine – example for issue workflow ¾

Typical issue workflow [issue submitted] -> [open] -> [assigned] -> [solved] -> [in evaluation] -> [closed]

¾

Often tasks and work are completed in loops [assigned]

¾

Example for electronic workflow with regard to roles:

¾

1.

issue submitted by a customer, salesperson, employee

2.

issue is relocated to the responsible employee’s inbox

3.

employee evaluates the issue and fulfills the task

4.

In case task can not be completed issues is assigned to the next appropriate employee (workflow) until task is completed

5.

When task is completed result will be evaluated and closed

6.

Originator will be notified

Workflow, inputs and outputs fully documented in the system

Müller, Opierzynski CSR Training for Industries, 2009

CSR Training Workshop for Industries Indicator Management

Process Management

Müller, Opierzynski CSR Training for Industries, 2009

CSR Training Workshop for Industries Project proposition: Transition of SMEs and supply chain networks towards sustainable production processes through an active uptake of ICT solutions for sustainability management – ICT4SM Objectives 1.

To develop a portfolio of efficient ICT-based sustainability management tools and solutions tailored to the local conditions in Southeast Asia and needs of local SMEs across various industrial sectors

2.

To stimulate and facilitate an uptake of ICT-based sustainability management methods and tools in significant number of regional SMEs and to improve their competitiveness and local environment situation

3.

To establish a service infrastructure for fostering sustainability management culture and capacity

4.

To encourage uptake of sustainability management tools and practices on national/regional level through active dissemination and promotion activities

Müller, Opierzynski CSR Training for Industries, 2009

CSR Training Workshop for Industries Example for combining tools and services for on demand application

Müller, Opierzynski CSR Training for Industries, 2009

CSR Training Workshop for Industries Further reading ¾ Small and Medium Enterprises and ICT, Vadim Kotelnikov (Foreword by Kim Hak-Su), UNDPAPDIP, APCICT, 2007 The e-primer looks at how the knowledge-based economy has impacted small and medium enterprises (SMEs); explores why so few SMEs have adopted why SMEs should adopt ICT; provides policy recommendations for promoting SME adoption of ICT. ¾ The Role of ICT in Doing Business, Information and Communications for Development, 2006, World Bank, (IC4D is a regular publication of the World Bank on the critical role of ICT in economic development. www.worldbank.org/ic4d ¾ Towards a Knowledge Economy in Thailand, Office of the National Economic and Social Development Board, World Bank, 2008 (Fundamental reasons for Thai SMEs to switch to more sustainable and innovation-based development patterns) ¾ How businesses are using Web 2.0, McKinsey Global Survey ¾ IT’s unmet potential, McKinsey Global Survey Results, 2008

Müller, Opierzynski CSR Training for Industries, 2009

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