Some local businesses recently showed they are capable of implementing responsible behaviours as they pursue their profit-making activities. It suggests that such a ‘shared value’ approach can unleash new business opportunities as it creates new markets and strengthens competitive positioning.
Of course, the enterprises’ performance must be continuously monitored and evaluated in terms of achieving the desired financial results. Effective and efficient operational processes are aimed at adding value to the firm itself.
Interestingly, there are many multinational businesses which are embracing this new ‘shared value’ concept, including General Electric, Google, IBM, Intel, Johnson and Johnson, Nestlé, Unilever, International Hotel Group and Wal-Mart which have already taken on board the notion of creating shared value. In a recent communication, even the European Union Commission endorsed CSV, as it encouraged enterprises to adopt a long term, strategic approach to CSR.
My recent study explored the local entrepreneurs’ attitudes and perceptions of responsible behavioural practices. The methodology has been based on a combination of both quantitative and qualitative research methods. The empirical study investigated the companies’ cultures and values, their commitment and behaviour for (or against) social and environmental practices.
In the main, the informants have indicated that responsible behaviour (strategic corporate social responsibility) often resulted in substantial benefits to the firm itself, as it supports their core business activities. The discretionary spending in CSR whether it is driven from a strategic intent or from ‘posturing behaviour’ often results in improved relationships with internal and external stakeholders. Following, this study’s quantitative findings, the ‘synergistic value’ model is being proposed for business practitioners.
The synergistic value model suggests that internal and external stakeholder engagement leverages the organisational performance resulting in a better market standing and financial performance. At the same time, businesses are forging community and regulatory relationships for their own interest. The rationale of societal engagement is to respond to third party pressures, to lower any criticisms from the public. They are also minimising regulatory problems by anticipating legal compliance.
This captioned model features direct links between responsible behaviour and societal relationships as it presents the potential effect of the government’s relationship on the organisation’s slack resources. These findings suggest that there is scope for governments in their capacity as regulators to take a more proactive stance in promoting responsible behaviours.
They can possibly raise awareness of sustainable practices through dissemination of information as well as provide training and development programmes for entrepreneurs. They may assist businesses by fostering the right type of environment for responsible entrepreneurship; through various incentives (e.g. grants, tax relief, sustainable reporting guidelines, frequent audits et cetera).
This research posited that social and environmental behaviours will ultimately bring financial results, as it suggests that organisational capabilities are positively linked to organisational performance and that slack resources are a facilitator for quality and innovation. It has been reported that discretionary expenditures in social and environmental practices result in strategic CSR outcomes.
Effective human resources management, employee motivation and operational efficiencies and cost savings will translate in healthier financial results. It goes without saying that slack resources are highly required for appropriate investments in human resources and sustainable environmental solutions.
The responsible behaviours which were investigated in this study included training and development opportunities for employees, employee consultation and dialogue, health, safety and security issues as well as measures for work-life balance. Apparently, business organisations are increasingly pledging their commitment for more sustainable environmental investments.
For instance, energy and water conservation, waste minimisation and recycling, pollution prevention, environmental protection as well as sustainable transport options are bringing strategic CSR benefits such as operational efficiencies and cost savings.
The concept of shared value is an integral organisational strategy as it re-conceives best practices. Shared value is opening up new opportunities for sustainability with its innovative approach to re-configure the value chain.
When the organisations are doing well, there are more available jobs in the community; they address the unemployment issues, resulting in more tax contribution to government authorities.