This thought provoking topic was presented at TBOWIT's January 2016 lunch by Dr. Thomas L. Ainscough, Associate Professor, Marketing at USF St. Petersburg Kate Tiedemann College of Business. CSV, corporate shared value, goes above and beyond a company’s typical CSR, corporate social responsibility position. CSV is social responsibility that is grafted into all parts of a corporation enhancing corporate success. In the past, a company would throw some money into being a business that had corporate social responsibility. Studies named by Dr. Aisncough showed that the benefit to the bottom line was negligible at best and varied across industries.
CSV is an all-encompassing position that a company takes to promote citizenship, philanthropy, and sustainability.
- · Corporate shared values with economic and social benefits
- · Joint corporate and community value creation
- · Integral to competing and to profit maximization
- · Company specific and internally generated
- · Realigns the entire company budget.
That’s great you say! How does it work in the real world?
Dr. Ainscough gave an interesting case study involving Cisco vendor system in Hong Kong. Cisco’s statement reads, “We expect our suppliers to meet the same high standards on ethics, labor rights, health, safety, & environment that we apply to our own people.”
Cisco applied their CSV to this particular supply chain in five areas: Design/Development, Planning/Ordering, Sourcing/Making, Delivering, & End of Life. For example with Design/Development, Cisco works with and checks the following with their vendors: Improvement in energy efficiency, Reduction of product packaging, and Design ease of recycling. Cisco is not just concerned about the production process, but also the people. Some of the items that Cisco checks for in a vendor include: How many overtime hours are worked, How many consecutive days without a break, & How many toilet breaks allowed. There are over 1,400 items involved in Cisco’s CSV plan with vendors. A similar check is done throughout each area of Cisco’s operation across all business units.
CSV is corporate shared values threaded throughout a company’s budget shaping how a company forms and operates. Studies cited by Dr. Ainscough show that the stock valuation of companies with a CSV plan in place outperform the S&P 500 over a ten year period. It’s worth checking out for your company and your people!