CSR Systematic Long Term Performance Improvement - Handout

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
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“
Background, definitions and drivers
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
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
Current views and definitions
managing resources and its impact in an

Sustainability
environmentally friendly, socially responsible and
Management
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
Corporate
beyond regulations (corporate nomenklatura for Sustainability Management)
Social
• Internally (from health and safety to responsible use of resources and adaptation to change
Responsibility (innovation)
•Externally – from social handling of community, stakeholder relations to human rights and global
environmental protection
European framework, Green Paper on corporate social responsibility
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
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
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
Guideline Social
Responsibility –
working draft 4.1
ISO 26.000
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
Examples of standards which contribute to CSR
Management standards Reporting standards

– Environmental Management - GRI - www.globalreporting.org
• ISO 14000 Family
• EMAS (European Union) Social standards
– ISO 26000 forthcoming 2009
– Quality Management – AA1000 (AccountAbility)
• ISO 9000 Family – Fair Trade Labeling Organization
• EFQM model for Business Excellence – BSCI (Business Social Compliance Initiative)
(European Foundation for Quality Management)
Industry standards
Workplace standards
– Textile
– SA8000 (Social Accountability International)
• ÖkoTex Standard 100Plus
– ILO-OSH-2001 (International Labor Organization)
• Purewear
– OHSAS 18001 (various worldwide Standardization Bodies)
• European Eco-Label
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. Legal compliance 1. การปฏิบตั ติ ามกฏหมาย

2. Freedom of association 2. เสรีภาพในการรวมตัวและสิทธิในการตอรองรวมกัน
3. Prohibition of discrimination 3. หามมีการเลือกปฏิบัตใิ นทุกรูปแบบ
4. Compensation 4. การจายคาจางตอบแทน
5. Working hours 5. ชัว่ โมงการทํางาน
6. Workplace health and safety 6. สุขภาพและความปลอดภัยในทีท่ ํางาน
7. Prohibition of child labour 7. การหามการใชแรงงานเด็ก
8. Prohibition of forced labour 8. การหามบังคับใชแรงงานและลงโทษ
9. Environment and safety issues 9. ประเด็นดานสิง่ แวดลอมและความปลอดภัย
10. Management systems 10. บริษทั ผูจดั การระบบการผลิต
www.bsci-eu.com/
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
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 The Environment

1. Guiding principles and corporate policy 1. Guiding principles and corporate policy
2. Management and measures 2. Management
3. Implementation 3. Measures and implementation
4. Reporting 4. Reporting
Social Issues / Production and Supplier Consumers and Society
1. Guiding principles and corporate policy 1. Willingness to provide information
2. Management and measures 2. Community involvement
3. Implementation
www.test.de
4. Reporting http://en.wikipedia.org/wiki/Stiftung_Warentest
‘Stiftung Warentest’ – Case Work March 09
Organisations by sector (Th, 19) Organisations by employees
Manufactur- Autom otive Health and

ing social work less than 50 51 - 250 251 - 500
Education other 501 - 1000 more than 1000
Own CSR Cross-functional No organisational

Department Collaboration CSR structure
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% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50%
com prehensively largely partially inadequately
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% 5% 10% 15% 20% 25% 30% 35% 40%
com prehensively largely partially 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%
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% 5% 10% 15% 20% 25% 30% 35% 40%
com prehensively largely partially
Reporting on such topics

No reporting on such topics
0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50%
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% 10% 20% 30% 40% 50% 60%
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% 5% 10% 15% 20% 25% 30% 35% 40%
Data is collected from several Data is collected from some Data is collected from a few Data of material and energy
areas and published areas and published areas and published consumption is not collected
and published
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% 5% 10% 15% 20% 25% 30%
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
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
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.
Valuing corporate social responsibility
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.
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 Local laws and customs
¾ ….
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, Directorate-
General 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
Further reading, information and networking – www.sustain-asia.org
Systematic integration of CSR into business operation
Performance
Reporting
Controlling
Assessment
Continuous Improvement
Strategy
Development
Internally directed analysis of own

company (e.g. SWOT)
Formulation of the company’
company’s core
Externally directed analysis of reason to be.
- Industry
- Markets Definition of corporate values Formulation of mid-
mid- and long-
long-term
- Environment
plan of action to
Definition of corporate culture - fulfill the company’
company’s mission,
- while taking account the company’
company’s
capabilities (internal analysis) and it’
it’s
competitive environment (external
analysis)
Implementation
Planning
Using the Balanced Scorecard Financial perspective

approach to break down Which financial objectives
business strategies (Kaplan & have to be fulfilled to
Norton) implement the strategy
Customer perspective Internal process p.

How the company Vision How do internal processes
wants to be seen & have to change to
by the customer Strategy implement the strategy
People & knowledge p.

What employees and the
organisation have to learn
implement the strategy
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 Provide

Be recognized (own-branded)
as sustainable products tailored to
company customers’ needs and
tastes
Internal Process Perspective Develop and

Green Increase Increase
introduce right
production business flexibility of
products to the
process transparency production
right markets
People and Knowledge Perspective

Ensure production staff Improve
Move to
Foster a can perform tasks business
knowledge based
company culture environmentally communication
value creation
of sustainability responsibly
Financial Perspective
Goal Key issues Target Activity

Increase profit • Profit margin • +50 percent Align company processes to
margin for own- • Production costs • -10 percent sustainability principles to
branded products • Selling price • +60 percent differentiate products and
• Overhead costs • -5 percent create added value for
customers
Customer Perspective
Goal KPIs Target Activity
Goal Key issues Target Activity
Increase profit • Profit margin • +50 percent Align company processes to
Be recognized as • Positive media • 6 reports in Use PR instruments to
a sustainable reports local, 3 in communicate company’s
company international commitment to sustainability.
• Overhead costs • -5 percent create added value for
media Develop co-branding/co-selling
customers
• Consumer survey • +35 percent strategy with sustainable
score • +25 percent products.
• Marketing budget
Provide products • Customer • +50 percent Engage customers to survey

tailored to satisfaction needs and identify trends, focus
customers’ needs • Loyalty ratio (re- • 50 percent also on buying habits.
buy rate)
Goal KPIs ProcessTarget
Perspective Activity
Increase profit
Goal as • Profit margin
Key issues • +50 percent
Target Align company processes
Activityto
Be recognized • Positive media • 6 reports in Use PR instruments to
a sustainable
Green production reports
Recycled materials local,
40 3 in
percent communicate company’s
Analyzeproducts
production
•
branded products • Selling price •
• +60 percent differentiate andprocess
company
processes as input international commitment to sustainability.
• Overhead costs • -5 percent createfrom a holistic
added perspective and
value for
• Hazardous media Develop
• Decrease or customers co-branding/co-selling
identify potential to green the
• Consumer
materialssurvey • +35 percent to 10 strategy
substitute with sustainable
production process, e.g.
score • +25 percent
percent products.
through substitution, reduction
• Marketing
• Energy budget • Use 40 percent and avoidance .
consumption from RES
Provide products
Flexibility of • Customer
• Lead-time • +50 percent
• -10 percent Engage customers
Improve to surveythrough
order planning
tailored to
production satisfaction
• Set-up time • -15 percent needs and identify
effective trends,
customers focus
involvement
customers’
processesneeds • Loyalty
• Time ratio (re-
to customer • 50• -20
percent
percent also on buying habits.
(design)
buy rate) Training of staff,
Optimization of internal and
external logistic, optimize
supplier management
Goal KPIs ProcessTarget
Perspective Activity
Increase profit • Profit margin
Goal as • Positive media People and
KPIs • +50Knowledge
percent Perspective
Target Align company processes
Activityto
Be recognized • 6 reports in Use PR instruments to
a sustainableGoal
Green production reports Keymaterials
• Recycled issues local,
• 40 3 in Target communicate
percent Activity
company’s
Analyze production process
company
processes as input international commitment to sustainability.
Improve • Overhead • Training
costs of staff• -5 percent createfrom
• 6 hours / month a holistic
Provide
added perspective
production
value for and
related
knowledge based • Hazardous media
• Decrease
• 2 courses Develop
or / year co-branding/co-selling
identify potential
training, set upto ofgreen the
knowledge
customers
value creation • Consumer
materialssurvey • +35 •percent
substitute to 10 strategy
30% increases with sustainable
production
managementprocess, e.g. Value
system,
score • +25 percent
of CIP impact products.
percent through
addedsubstitution,
products through reduction
new
• Marketing
• Energy budget
• R&D costs • Use 40 percent and
• 25 % increase to designsavoidance .
consumption from RES
production cost
Provide products
Flexibility • Customer • +50 percent Engage customers to survey
Cultureofof • Lead-time
• Employee • -10 percent
• 85 percent Improve order planning
Anonymous employeethroughsurvey to
tailored to
production satisfaction
• Set-up time • -15 percent needs and identify
effective customerstrends, focus
involvement
sustainability
customers’ satisfaction identify
buyingproblems,
habits. set up of
processesneeds • Loyalty• Time ratio
to (re-
customer
• Improvement by
• 50• -20
percent
percent
• 15 suggestions
also on
(design)
incentive schema, CIP
buy rate) Training of staff,
employees per quarter networking events,
• Recruitment of • +20 percent Optimization of
communication internal
platform,and
Univ. Gradates applications external logistic,
improving optimize
working atmosphere
supplier management
Performance
Reporting
Controlling
Assessment
Continuous Improvement
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 Monitoring, benchmarking, audit / internal/external

Content KPIs, benchmarks, goal achievement, improvement monitoring
Structure Specific definition, graphics, results
Reporting Publication, frequency, work flow
Performance assessment / closed-loop controls
Company
Top Management
Information flow
Area 1 Area 2 Area n

Production Area
Department 1 Department 2 Department n Material Flow

Department
Closed Loop Closed Loop Closed Loop
Procedures, Responsibility and Competences
Ways of decisions Ways of communication
CEO
Director
Manager
Master
Forman
Employee
A B
levels
เกรงใจ graengdjai ?? Interfaces
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 mind-
mind-set of employees (internal acceptance)
¾ Proactive approach to tackle potential mental reservations of employees
employees
¾ Establishing a discourse-
discourse-oriented infrastructure (e.g. internal discussion on activities
before implementation)
¾ Involvement of various functions and departments
¾ Consideration of micro-
micro-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…
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)
ICT and business management
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 re-
investment 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
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
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)
Reasons for insufficient level of ICT adoption
Poor service of support infrastructures While basic infrastructures and ICT equipment are accessible in Thailand, service
result in limited business access and and support infrastructures are underdeveloped.
low application levels
Most advanced ICT products are ICT firms used to target large enterprises (budget, HR to run state-of-the-art ICT).
designed for larger firms, not SMEs These products are often too expensive and too complex for SME users.
Limited ICT literacy of SME owners Many SME owners are unfamiliar with operating a computer, skeptical of the
hinders their ability to choose concrete benefits for the core business, and share the stereotype that advanced
ICT is only for larger companies.
Limited ICT literacy of employees in Even if SME owners have a strategic understanding of why they should adopt
SMEs hinders ICT adoption ICT, their staff is often poorly trained. Training costs both time and money –
resources that SMEs usually lack.
Adopting ICT is not a technical ICT is a difficult task for companies of all sizes, whether they are in developed or
challenge developing countries. The main challenge is, it must go along with organizational
and structural changes in companies.
Lack of financing options limits SME IT budgets are usually small or nonexistent. In addition, adopting ICT is not a one-
ability to purchase ICT time cost because there are ongoing costs of maintaining and upgrading
hardware and software, and human capacity building.
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% 20% 0% 0% 20% 40% 60% 80% 100%
in use not in use very great and great
Selected advanced ICT for business management
Examples for SM approach Function Link
advanced ICT
Open Bravo, SoFi Resource Management, Indicator based process monitoring from http://forge.openbravo.com,
CSR, Environmental manufacturing process to supply chains www.pe-international.com/sofi
Cost Accounting and Enterprise Resource Planning
Redmine Environmental Workflow management for continuous www.redmine.org/

Management, CSR improvement processes
Umberto Resource Management, Material and energy flow analysis, www.umberto.de/en

Environmental process simulation
Investment Appraisal
Drupal, Stakeholder Internal / external communication, http://acquia.com/products-
SugarCRM Relationship stakeholder involvement (CRM) services/acquia-drupal ,
Management www.sugarcrm.com
E-Front, Elgg Knowledge web 2.0 e-learning and knowledge www.efrontlearning.net
Management, e- management for businesses, Internal / http://community.elgg.org
Learning for business external communication
Resource flow analysis
www.modiconsult.com
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
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)
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:
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
¾ Workflow, inputs and outputs fully documented in the system
Indicator Management Process Management
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
Example for combining tools and services for on demand application
Further reading
¾ Small and Medium Enterprises and ICT, Vadim Kotelnikov (Foreword by Kim Hak-Su), UNDP-
APDIP, 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

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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

1. Understand how organizations strategically manage CSR

Corporate Social Responsibility (CSR) – background and business context

Systematic integration of CSR – process model and tools

Getting started with CSR – Interactive Group Work

Background, definitions and drivers

Basis for current sustainability discussion:

• Hans Carl von Carlowitz (1645-1714)

• Drafting of one of the first forestry treatise

• Two-fold strategy to secure timber supply

• Timber should only be taken in relation to the forest’s ability to regenerate

managing resources and its impact in an

Approach to give a frame for businesses to express their commitment to society.

Sustainability strategy "safeguard" - reducing and managing risks

¾ Sustainability-induced problems and challenges

Sustainability strategy "credibility" - enhancing credibility and reputation

Sustainability strategy "efficiency" - enhancing productivity and efficiency

Sustainability strategy "innovation" - differentiating in the market

¾ Takes into account the expectations of stakeholders

Guideline Social Responsibility – working draft 4.1 ISO 26.000

Management standards Reporting standards

1. Legal compliance 1. การปฏิบตั ติ ามกฏหมาย

CSR surveys on practice, drivers on benefits

Stiftung Warentest, Case Work March 09 (19 organisations)

¾ societal and scientific opinion-forming processes of responsible corporate behavior

Social Issues / Employees The Environment

Organisations by sector (Th, 19) Organisations by employees

Manufactur- Autom otive Health and

Own CSR Cross-functional No organisational

Commitment is explicetely expressed

Avoid active or passive corruption and bribery in business

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

com prehensively largely partially inadequately

Measuring employee satisfaction

Details of em ployee absenteeism are system atically recorded and analysed

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

com prehensively largely partially 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

0% 10% 20% 30% 40% 50%

There is a com plaints office for em ployees at the production site

Preference is given to certified / audited sub-contractors (e.g. SA8000, BSCI)

com prehensively largely partially

Reporting on such topics

Status of environmental protection

Responsibility for production process related environm ental protection is allocated

0% 10% 20% 30% 40% 50% 60%

com prehensively largely partially