Sustainable Success with Stakeholders

Transcription

1 Sustainable Success with Stakeholders

2 The business model of the pharmaceutical industry is on the test. In the future, only corporations will be successful who are able to implement the strategic management approach Stakeholder View in a visible and measurable way. Dr Petra Danielsohn-Weil, CEO and President Pfizer AG, Switzerland Communication is not just Orange s core business but also the most important prerequisite for a successful management. Since its foundation, Orange has greatly valued the constant dialogue with all its stakeholders and has therefore gladly agreed to participate in the case study of the authors Sachs, Rühli and Kern. The new book presents a profound analysis of how stakeholder dialogues are set up in firms and the impact which they have. The book contains valuable tips on how to establish and maintain a sustainable dialogue. Congratulations on this work! Andreas S. Wetter, CEO Orange Switzerland The sustainable success of Swiss Re s business is based on knowledge about its different stakeholder groups such as employees, customers, experts and other partners. Based on global activities in different cultural contexts, the strategic relevance of stakeholders will further increase for Swiss Re. Charlotte A. Gubler, Member of the Executive Board, Swiss Re

3 Sustainable Success with Stakeholders The Untapped Potential Sybille Sachs Edwin Rühli and Isabelle Kern

4 Sybille Sachs, Edwin Rühli and Isabelle Kern 2009 Foreword Gilbert Lenssen 2009 All rights reserved. No reproduction, copy or transmission of this publication may be made without written permission. No portion of this publication may be reproduced, copied or transmitted save with written permission or in accordance with the provisions of the Copyright, Designs and Patents Act 1988, or under the terms of any licence permitting limited copying issued by the Copyright Licensing Agency, Saffron House, 6 10 Kirby Street, London EC1N 8TS. Any person who does any unauthorized act in relation to this publication may be liable to criminal prosecution and civil claims for damages. The authors have asserted their rights to be identified as the authors of this work in accordance with the Copyright, Designs and Patents Act First published 2009 by PALGRAVE MACMILLAN Palgrave Macmillan in the UK is an imprint of Macmillan Publishers Limited, registered in England, company number , of Houndmills, Basingstoke, Hampshire RG21 6XS. Palgrave Macmillan in the US is a division of St Martin s Press LLC, 175 Fifth Avenue, New York, NY Palgrave Macmillan is the global academic imprint of the above companies and has companies and representatives throughout the world. Palgrave and Macmillan are registered trademarks in the United States, the United Kingdom, Europe and other countries. ISBN ISBN (ebook) DOI / This book is printed on paper suitable for recycling and made from fully managed and sustained forest sources. Logging, pulping and manufacturing processes are expected to conform to the environmental regulations of the country of origin. A catalogue record for this book is available from the British Library. A catalog record for this book is available from the Library of Congress

5 Contents List of figures List of tables Abbreviations Acknowledgements Foreword by Gilbert Lenssen viii ix x xi xii Introduction 1 1. Why put all your eggs in only one basket? 9 An appeal for a comprehensive view of management 10 The early birds in stakeholder thinking 13 The era of shareholder value fanatics 15 Stakeholder management a new horizon 16 Triggers for a stakeholder orientation Who are my fellow stakeholders? 25 Shareholders are everything 25 The grand design model 26 Basics of stakeholderism 29 Stakeholder management at stake 30 Stakeholder mapping 31 A ladder to stakeholder potential 35 Shareholder dice game Shareholders are also stakeholders 47 Can I have your watch? 48 Investing in the future 52 Shareholder engagement Getting to know your customers 65 No two alike 70 Treating them right 71 Listening to the right customers 74 In search of lead users 76 v

6 vi Contents 5. Employees as knowledge partners 79 The who is who of employees 80 The appeal of your company 82 Employees at risk 85 Zero size 88 Using the knowledge of employees The strategic core of your stakeholders 99 Strategic success explained 100 Race for resources 102 Intangible resources 103 Stakeholder contribution 104 Stakeholders as sources of resources 107 Trading core competences? 108 The Licence to Innovate The spider in the web 113 Networking 115 Agents provocateurs 117 Positioning 118 Multi-functionality 120 The Licence to Compete The demands of society 125 The Licence to Operate 125 Societal expectations 125 Laws or soft laws, that is the question 126 The corporation as global institution 128 Interest groups 132 Stakeholder democracy Transparency and sustainability 139 Sustainability 141 General principles of corporations 142 Matching goals and principles 143 Triple bottom line 145 Measure it all 146 Social performance pays off 147 Value transparency 151

7 Contents vii 10. Have your cake and eat it 155 The upside-down pyramid 156 We are the owners 159 How responsibility translates into hard currency 164 Take aways 169 Appendix I: Research Project Good Practices of Stakeholder View 173 Appendix II: Information on Case Study Firms 180 References 185 Index 191

8 List of Figures I.1 GfK Trust Index Appraisal of stakeholder awareness in your corporation Stakeholders with two or three key attributes Systematic analysis of the most important stakeholders Possible strategically relevant stakeholders The benefit potentials as perceived by Pfizer Switzerland The risk potentials as perceived by Pfizer Switzerland The Triple Bottom Line External stakeholders and special customers are important sources of innovation Collaboration with customers provides numerous and varied advantages Performance when implementing all three HR measures Performance when creating a family environment The market- and resource-oriented view Stakeholder contributions to core competences Shell s stakeholder network in the case example of Brent Spar: social and political stakeholders Comparison of gross domestic product and the total revenue of corporations The growing number of NGOs with ECOSOC consultative status (Economic and Social Council of the US) Sustainability, goal setting principles and performance assessment Relationship between financial and social success Concept of comprehensive corporate responsibility The pyramid turned The three corporate licences 166 viii

9 List of Tables 1.1 The nine learning steps of Swiss Re Characteristics of stakeholders Benefit and risk potential of stakeholders (examples) Prioritizing the benefit and risk potentials Contribution to strategic cornerstones The most important stakeholders Telecom privatization in Europe Importance of stakeholders by industry Economic, social and ecological indicators Sustainable criteria industry analysis Examples of procedural justice Examples of distributive justice 164 A.1 General information Suva 180 A.2 General information Swiss Re 181 A.3 General information Zurich Cantonal Bank 181 A.4 General information Orange 182 A.5 General information Sunrise 183 A.6 General information Swisscom 183 A.7 General information Pfizer Switzerland 184 ix

10 Abbreviations ARPU CBG CSR CRM EBITDA EFQM EIRO EITI ESG GEO GPA HMO HRM IFC IPCC ISS MbO MOSOP NYSE NGO OECD PRI ROI SMS SRI TDC UNEP VHS WMO ZKB Average Revenue Per User Coordination Against BAYER Hazards Corporate Social Responsibility Customer Relationship Management Earnings Before Interest, Taxes, Depreciation and Amortization European Foundation for Quality Management European Industrial Relations Observatory Extractive Industries Transparency Initiative Environmental, Societal and Governance Global Equity Organization Group Public Affairs Health Maintenance Organization Human Resources Management International Finance Corporation Intergovernmental Panel on Climate Change Institutional Shareholder Services Management by Objectives Movement for the Survival of Ogoni People New York Stock Exchange Non-governmental organization Organisation for Economic Co-operation and Development Principles for Responsible Investment Return on Investment Short Message Service Socially Responsible Investing Tele Danmark Communications United Nations Environment Programme Video Home System World Meteorological Organization Zürcher Kantonalbank (Zürich Cantonal Bank) x

11 Acknowledgements In writing this book several stakeholders have made substantial contributions. First of all, we would like to thank the University of Applied Sciences in Business Administration, Zürich (HWZ). We would particularly like to thank its principal, Professor Jacques Bischoff, who has always supported us financially and who always showed trust in and appreciation of our research. We are also grateful to Urs Marti, Delegate of the Board of Directors of HWZ, who has always supported us in our research projects. A special thanks goes to Christine Luisi, who translated the German version of this book into English. She did it with great commitment, expert knowledge and patience when the authors introduced new phrasings that needed to be converted into proper English. We are also grateful to Magi Wechsler, who succeeded in transforming a somewhat dry text into witty cartoons that summarize the contents of the chapters in a few pointed strokes. We would also like to thank EABIS for supporting the publication of this book and for its cooperation during the past years. All these stakeholder relations are proof of how fruitful and enriching the contribution of our stakeholders knowledge and experience can be for value creation. SYBILLE SACHS EDWIN RÜHLI ISABELLE KERN xi

12 Foreword Within EABIS (European Academy for Business in Society), stakeholders have always been identified as an important theme, both for the multinational companies and leading business schools in our network. As a result, in 2005, the Corporate Founding Partners of EABIS IBM, Johnson & Johnson, Microsoft, Shell and Unilever agreed to co-fund the HWZ-led project behind this book as one of their first priority initiatives. As in many areas of corporate responsibility research, there is an acute need for projects that deliver practical results that managers can adopt in their daily work. Through their body of work around the Stakeholder View, Sybille Sachs, Edwin Rühli and colleagues have made a notable contribution to our understanding of the business case for excellence in stakeholder management. The results of the extensive research done with seven Swiss firms most of which are either global players themselves or are subsidiaries of global corporations were initially presented at a 2007 conference in Zurich, but are further elaborated in this book. Many firms confirm that stakeholders are important to them. But as the book title, Sustainable Success with Stakeholders: The Untapped Potential, suggests firms often lack a systematic approach to stakeholder management. They lack experience in defining their strategically important stakeholders, in engaging their stakeholders in valuecreation initiatives, and particularly in understanding the potential benefit that stakeholders can bring to their own firm. This book shows managers in a very hands-on manner how they can identify their stakeholders and cooperate with them in a way that is mutually successful and satisfying. The book includes numerous examples from the case studies and from international companies, illustrating the stepping-stones to a comprehensive stakeholder management framework. This makes it an indispensable companion for managers of small as well as large firms. Moreover, it is also suited for business students who are interested in seeing how the theoretical concepts of the Stakeholder View can be applied in practice. GILBERT LENSSEN President, EABIS xii