Designing the New Social Vision: A Social Vision for Corporate Citizenship – Edmund Burke

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Designing the New Social Vision: A Social Vision for Corporate Citizenship

by Edmund M. Burke, Ph.D., Director Emeritus, The Center for Corporate Citizenship at Boston College In the early 1980s a number of U.S. companies began to realize they needed a vision to give direction to planning community relations programs. Business visions had been helpful in giving direction to their companies’ strategies and goals. A similar vision was needed to guide the development of community strategies.Most used the term “social” vision1. A few, uncomfortable with the word social, used the term “community” vision. Regardless of what term was used, more and more companies, surveys showed2, adopted vision statements for community relations.

With the more recent move toward a broader vision of corporate citizenship has come a growing recognition that the earlier social or community vision was too limiting. Corporate citizenship encompasses a much broader array of activities, including the environment, ethics, transparency, human rights, child labor and diversity in addition to community involvement. A newer vision was needed to guide the development of a company’s citizenship strategies.

Fewer companies were uncomfortable with the term “social” vision. After all, the company’s citizenship programs were responses to social issues. Moreover, people began using the term “social visionary” to describe CEOs who were in the forefront of corporate citizenship.3

Like its predecessor, the new social vision is different than a business vision. A business vision includes statements of why the company exists, what purpose it serves, and how the company should be positioned in the future. It provides direction, drives change, motivates and energizes employees, gives context to strategies, and influences managers in their decision making. It is also a public statement, a signal to shareholders, analysts, and business thought leaders, that describes the prospects for growth and the vitality of the company.

A social vision, a statement of the company’s core operating values and the benefits it wants to make to society as it goes about carrying out its business goals and objectives, complements the business vision. It too guides the collective behavior of the company, but it also gives direction to how the company should act in its relationships with external stakeholders.

A business vision may be necessary for business success, but it is no longer sufficient. And while a social vision alone may not be necessary for business success, it is a sufficient condition that contributes to the success of the business vision.

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Why the need for a social vision?

A prime reason for creating a social vision is that it reassures stakeholders that the company intends to adhere to the new rules of corporate behavior: it will safeguard the environment, support human rights, eliminate child labor, adopt codes of ethics, enter into partnerships with non-governmental organizations, display openness and transparency in relationships with customers, employees, community groups and governmental organizations, promote diversity in the workplace, help communities solve their social problems, support local, national and international charities, and pay its fair share of taxes.

A second reason is that it is plain old good business. Studies by The Center and other organizations reveal that shareholders, employees, customers, government officials, activists, and the public have overwhelmingly favorable attitudes toward companies that demonstrate they are responsive to the quality of life issues in communities and societies.4

And when customers, employees and key public officials know a company has adopted and lives up to a social vision, the favorable attitudes increase. A social vision also makes it easier to establish relationships with key officials, and the relationships tend to be more loyal and trusting.5

Third, a social vision is a distinguishing mark of a world class company. Admired companies, companies that have the respect and trust of their peers, customers and employees, have a vision that is broader than their economic or business vision. While they are proud of their products and services, revel in creativity and innovation, and are continually attentive to the needs of customers and clients, they are also attentive to the changing social, environmental and ethical needs and attitudes of the public.

World class companies are leaders. They are quick to anticipate trends and issues. Responding to the accounting and governance scandal of 2002, for example, the Coca Cola company changed its accounting practices to report the value of stock options it granted to executives as an expense. This was a daring move, challenging the common wisdom of most corporations. But it had to be done, according to CEO Douglas N. Daft, to get ahead of a growing distrust and anger against corporations that was making its presence felt in a precipitous drop in the stock markets.

“We know,” explained Coca Cola’s Chief Financial Officer, “we’re in a new environment and we need to take the lead on this issue and perhaps in a small way, try to help restore confidence in corporate America.” Other companies quickly followed their lead.

World class companies, moreover, see no incompatibility between a business vision and a social vision. Indeed a social vision is viewed as an integral part of a world class company’s business vision.

“We do not see our social responsibilities,” says Sir Peter Middleton, Chairman of Barclays Bank, “as conflicting with business objectives, neither do we see them as add-on. Providing progressive employment practices and excellent customer service, minimising our impact on the environment and supporting the wider community all help to define who we are and how we differ from our competitors. We see our role as a good corporate citizen as helping to build a stronger business.”

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The characteristics of a social vision

1. A social vision is a statement about the company’s social, environmental, and ethical obligations to communities and societies.

The social vision is designed to give direction and focus to the way a company will act in society as it goes about achieving its business goals and strategies. It is a pledge to internal and external stakeholders that the company will:

  • contribute to the development of communities in which it operates
  • maintain and sustain the environment for the present and future generations
  • treat its employees with dignity and respect
  • foster human rights
  • engage in ethical and open relationships with shareholders, employees, customers and community officials
  • work collaboratively with external stakeholders in addressing community and societal concerns and issues

It is recognition, too, that social, environmental and ethical issues and concerns have a direct relationship to the company’s ability to be successful. It answers the questions: “What do we want the public to say about the behavior of this company? How do we want to behave as we go about operating in communities and societies? What values do we want to add to the communities in which we operate? What environmental legacy do we want to hand down to our successors?”

While the vision grows out of assessments of changing trends, attitudes, issues, and concerns of external stakeholders, it is first and foremost a statement by the company. It is a pledge the company—not a stakeholder—makes to confirm the integrity of the company’s behavior.

Equally important, it is a product of an objective analysis of public social, environmental and ethical trends and issues. It is a factual assessment. Objectivity is important if only to avoid the easy temptation to blame or to question the sincerity of outsiders for the problems a company may face in communities and societies.

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2. The CEO is the driving force for developing and managing the social vision.

Similar to the business vision the social vision must be the creation of the chief executive officer. In fact, according to a survey of 1,500 senior leaders, 870 of whom were CEOs, designing a vision is the principal behavior trait desired in a CEO. The job of the CEO, according to the respondents, is to convey “a strong sense of vision.” 7

The CEO not only has to be the molder of the vision, but also its champion. The days when the CEO was the civic cheerleader in the community are over. Mergers and acquisitions as a consequence of globalization are shrinking the number of CEOs. And those that are left have little time for heading up a museum gala or a community development effort. What precious free time a CEO has is now expected to be spent with the family.

The new “civic” job of the CEO is to promote the social vision inside the company and to ensure that it is being carried out. If the social vision is to be an enduring guide to management decision making then it is the CEO who must ask the questions: “Does this business decision support the kind of company we want to be in society? Does it detract from the social vision of our company?”

Another reason why CEOs have to be responsible for shaping and managing the social vision is their new “celebrity” role. Today’s CEOs are recognized and sought after for opinions. They appear on business television channels and talk shows, make speeches at public forums, and write best-selling books. They are questioned not just about the economic performance of their own companies but about business in general.

They are also asked about social and environmental responsibility, including their own company’s responsibility to society. And when the answers do not conform to the public’s new rules for corporate behavior, they are faulted. Jack Welch, for example, has seen his legacy as the most admired CEO in the country become tarnished because of the way he fought against removing a toxic chemical, polychlorinated biphenyls (PCB), GE had dumped into the Hudson River. “There are many, even in corporate America,” wrote Joseph Nocera, executive editor of Fortune Magazine, “who believe that the ferocity with which GE fought to avoid having to clean up the river was the single biggest mistake of the Welch era.”8

Writing in the Harvard Business Review, Warren Bennis, the Distinguished Professor of Business Administration at the University of Southern California, referred to the PCB issue as one of the two famous failures of Welch’s tenure. The other was the aborted Honeywell acquisition, which itself is an example of Welch’s refusal to understand that the rules for corporate behavior had changed.9

Ironically, Welch’s predecessor, Reginald Jones, is quoted by the Business Roundtable, an organization of the chief executive officers of major companies, as saying, “public policy and social issues are no longer adjuncts to business planning and management. They are in the mainstream of it. The concern must be pervasive in companies today, from boardroom to factory floor.”10

Corporate social issues have now become a form of public accountability. And if the CEO is to be held publicly accountable for the company’s social and environmental performance, then it behooves the CEO to take responsibility for shaping and managing its social vision.

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3. A social vision needs to be explicit—repeatedly explicit.

Managers should not have to guess how the company expects them to behave in their relationships with external stakeholders. It should be as indelible in their minds as the company’s business vision. It has to be intrinsic to the culture of the organization—a “this is the way we do things here” expression of the behavior of the people who work for the company.

A common characteristic of these vision statements is their simplicity, conciseness, and clarity. Business visions are rarely long winded. Jack Welch’s famous and successful business vision for GE, soon after becoming CEO in 1980, is a good example: It is necessary, he told his managers, for GE to become “number one or two in every thing we do—or do something about it .”11 Nothing could be clearer. And it certainly worked.

A social vision, like a business vision, should not be a “white paper” or a complicated description of the company’s social programs. It should be a straightforward explanation of how the company wants to be perceived by employees, customers, shareholders, vendors, community stakeholders, and the general public.

Repeatedly explicit means that the social vision should be promoted whenever possible. Jack Welch, for example, kept hammering on his business vision at any occasion. “Like every goal and initiative we’ve ever launched, I repeated the No. 1 or No. 2 message over and over again until I nearly gagged,” said Welch. “I tried to sell both the intellectual and emotion cases for doing it. The organization had to see every management action aligned with the vision.”12

Because it is a societal vision, it should be made publicly explicit. Why hide a concept that influences customers, employees, and public officials? State it. Publicize it. Promote it in all sorts of ways.

Significantly, there is a growing movement to publish professionally attractive corporate social or social responsibility annual reports. The old low-cost community relations report has taken on a new luster. It has also attracted attention. Ford’s first annual social report, Connecting with Society, earned it a front page story in the New York Times, and was also praised in an editorial a few days later.13

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4. Consistency is equally as important as explicitness.

A vision statement is long range in scope. It gives direction to strategic planning and provides a framework for day-to-day decision making. Unlike goals and objectives it should not fluctuate or be subject to individual whims. It explains what the organization will do when confronted by ambiguity and surprises.14 Changing a company’s social vision should be done cautiously and thoughtfully. The consequence of inconsistency can be disastrous.

When Monsanto, for example, was preparing to implement its biotechnology strategy in the late 80s it was well aware of the fears and uncertainty of the public towards bio-engineered food products. It knew, too, that there was strong organized opposition among many environmental groups to bioengineering.

A strategy committee was charged with gaining public acceptance of the company’s push into biotechnology. One of the original strategies was to bring in opponents as consultants, believing that their involvement in the process would ease bio-engineered food into the market place. Plans were developed to reach out to affected groups, environmentalists, farmers, agricultural universities, food companies, and public officials in hopes of winning their support. This approach would be time consuming—probably ten years long according to Monsanto’s chief operating officer at the time.

In the late 1980s, however, the company, dissatisfied with the go-slow approach, suddenly reversed course and adopted a government affairs strategy, at the direction of the newly appointed CEO, Robert Shapiro, whose background was urban policy.

A new management team, experienced in government affairs, took over the biotechnology planning. The go-slow approach was shelved in favor of a strategy that would tackle the regulatory barriers head on. Government guidelines would speed up public acceptance. They hastily began meeting with elected and appointed government officials in Washington.

The original committee members argued against tampering with collaboration and consultation, a strategic approach that had worked well for the company in the past. Caution, they insisted, should by the byword of the biotechnology strategy.

The new managers hurried on, however. Without any advance warning to the public and against the advice of scientists, they began introducing biotechnology products. Bovine growth hormone, which improves milk production, was quickly introduced, followed by bioengineered bacteria designed to make plants resistant to frost. Newspapers printed photographs of scientists in protective gear spraying strawberry plants. The public was horrified. Environmental opponents were delighted.

The strategy blew up in Monsanto’s face. Public furor was unrelenting, and resistance to biotechnology spread and intensified. By the end of the 1980s Monsanto’s error in abandoning its slow collaborative strategy was apparent. “I don’t think they really thought through the whole darn thing,” said a professor of biological sciences at Stanford University.15

Shapiro admitted failure. “We’ve learned that there is a fine line between scientific excitement on the one hand and corporate arrogance on the other,” he wrote. “We’ve been working with biotechnology for 20 years. We think we know something about the subject, perhaps more than most people. When we think that about ourselves, it’s not hard to give people the impression that we don’t much care what they think—that our job is to teach (or preach) and theirs to listen respectfully. We didn’t listen very well to people who insisted there were relevant ethical, religious, cultural, social, and economic issues as well.”16

Ironically, Monsanto had at that time and still has strong, positive and supportive relationships in its manufacturing communities. The support and positive reputation of the company is based on an implicit vision that its community and environmental programs and strategies should support the goal of enhancing and protecting the company’s license to operate. To a person, Monsanto managers will tell you that in today’s cynical and litigious world, obtaining the permission to operate is essential in running a facility. Maintaining that permission, they maintain, requires developing positive, sustainable, and collaborative relationships with individuals, organizations and groups in communities—which seems like the beginning of an effective social vision.

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5. A social vision should be global in scope.

Community relations practices are much more mature than they were just 10 years ago. They are more strategic, better managed, more successful, and a good deal more professionally operated. Consequently, managers have benefited from a rich experience in designing long range “community” and “social” visions on how to position a company favorably in a community.

The success of community relations, however, has led to a tendency in companies to neglect the development of a global social vision, believing that a vision that works at the community level is sufficient to guide it in international operations. The problem with this reasoning, however, is that international issues can often be far different and often more complex than local issues. And when confronted by an international issue, corporate officers, many inexperienced in modern community affairs, fall back on practices that are based on the old rules of community relations.

The inability of major pharmaceutical companies to succeed in a lawsuit to prevent the South African government from purchasing generic AIDS drugs is an example. The suit, brought on behalf of 39 companies, generated immediate and widespread protests. Leaders from around the world, including Nelson Mandela, former president of South Africa, Kofi Annan, Secretary General of the United Nations, and officials at Yale University where one of the AIDS drug was developed, soon joined the protests. Even the business-friendly George W. Bush Administration expressed their support for the South African government.

The drug companies persisted in their suit, despite evidence that the litigation tactic was failing. On April 19, 2001, two years after the suit was filed, the pharmaceutical companies finally relented.

The ironic lesson is that at the community level pharmaceutical companies had long foresworn litigation as a tactic in dealing with community groups and activists. They had been building, quite successfully, strategies based on a vision that consultation and collaboration should be the guiding force of programs and in working with community groups. This experience could have been an informed source for a company-wide social vision, and may well have averted the failure in South Africa.

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6. A social vision should be individually tailored to a company.

There may be similarities in practices and programs, but each company must develop its own vision and methods for achieving it. A social vision for a high technology company, for example, may be different than that of a chemical manufacturing company, as they each respond to different societal concerns and issues. Public utilities often have to emphasize the importance of responding to community concerns that large global manufacturing companies may not. Societal and community issues are different in California than are those in New England. What is an important concern in the Philippines may not be the same in the United Kingdom.

The social vision should also relate to the unique values and competencies of a company. Almost every company has something that is distinctive; the product or service the company offers, the values of its founders and current leaders, the special culture, the knowledge, creativity, and expertise of its employees, and the vision the company has as a business. Capturing this distinctiveness in a social vision statement can be a powerful force for integrating its acceptance and adherence throughout the company.

Johnson & Johnson’s Credo is a good example of how a pharmaceutical company emphasizes one of its distinctive characteristics—health—in a social vision.

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7. A social vision is a management responsibility.

Finally, and probably the most difficult requirement to implement, is to make the social vision a responsibility of senior officers and managers in a company. All too often general managers assume that corporate citizenship is an enhanced or expanded community relations function. Nothing could be further from the truth.

General managers are the visible presence of the company in the community and in society. They set the tone. They determine the actions of the company. Consequently communities look to the manager, not the public relations or public affairs official, to explain the company’s behavior.

That means using the social vision as a guide to individual behavior and decision making. As Susan Rice, CEO of Lloyds Bank of Scotland, explains, “Corporate citizenship is best practiced when it is integrated in the company. Business decisions need to be made against the background of their impact on community and society. And corporate citizenship decisions should be made against the background of business needs.”

Of course, getting general managers to accept the operational responsibility of a social vision is a monumental task. It requires a shift in culture, a transformation of how the company is operated and run. No change of this magnitude is ever easy.

It means giving up old habits and relationships. It means learning new ways to relate to a much wider group of stakeholders. But the adoption and implementation of a social vision is no longer optional for today’s managers.

Click here to see sample social vision statements. (If your company has a social vision you would like to share, send it to us and we will include it.)

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1. E. Burke, “A Social Vision,” New York Times, 2/18/90. See also, E. Burke, Corporate Community Relations: The Principle of the Neighbor of Choice, (Westport, CN: Praeger, 1999).

2. Annual surveys on community relations conducted by The Center for Corporate Community Relations at Boston College, now The Center for Corporate Citizenship at Boston College, Chestnut Hill, MA 02467.

3. J. Garten: The Thought Leader Interview,” Strategy and Business, Issue 22, First Quarter, 2001, pp 171-177.

4. Boston College Center for Corporate Community Relations, Making the Business Case: Determining the Value of Corporate Community Involvement, (Chestnut Hill, MA: Boston College Center for Corporate Community Relations, 2000).

5. J.A. Ledingham and S.D.. Bruning, “Relationship Management in Public Relations: Dimensions of an Organizational Public Relationship,” Public Relations Review, 34 (1), Spring 1998 pp 55-65

6. F. Norris and S. Day, “Coke to Report Stock Options as Expenses,” New York Times, July 15, 2002, pp. A1, A13

7. M. Lipton, “Demystifying the Development of an Organizational Vision,” Sloan Management Review, Summer 1996, p. 84.

8. J. Nocera, “The Customer is Usually Right: Jack Welch Looks Back Over his 20 Years at the Helm of G.E.,” The New York Times Book Review, October 14, 2001, p. 13.

9. W. Bennis, “Will the Legacy Live On,” Harvard Business Review, February 2002, p. 99.

10. The Business Roundtable, “Statement on Corporate Responsibility,” )Washington, D.C.: The Business Roundtable, 1981, also cited in I. Wilson, The New Rules of Corporate Conduct: Rewriting the Social Charter, (Westport, CN: Quorum Books, 2000) p. 12.

11. J. Welch (with J.A. Byurne), Jack: Straight from the Gut, (New York: Warner Books, 2001) p. 108.

12. J. Welch, p. 109.

13. New York Times, May 12, 200

Boston College Center for Corporate Citizenship

© 2012 Boston College Center for Corporate Citizenship

Source: http://www.bcccc.net/index.cfm?fuseaction=Page.viewPage&pageId=692

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