Why Corporate Social Responsibility Is the Next Management Revolution -

an example from China

Bright China

In the 1990s, Shao Ming Lo, the chairman of Bright China, a development corporation in
China, was in an airport in North America, where he was amazed to see cleaning
workers who were respected by the public and enjoyed their work. He went home to
Shanghai committed to bringing that respect to Chinese workers. Like Gandhi in the
1940s, Chm. Shao believed that the only way to bring about such a change was to be
responsible for creating it.

Bright China’s management team believes that for China to become a sustainable,
functioning society, its business leaders must proactively address community services
needs and create opportunity and respect for everyone. For its first 15 years, the
management team led a real estate development company with a socially responsible
outlook-in contrast to what we read about much of China’s enterprise, which is known
for horrific industrial assault on the environment, abuse of quality, and exploitation of
labor. Bright China’s management believes that if leaders better understood the
responsibility of management, the vast majority of enterprises in China would be socially
responsible. Hence, in the late 1990s, its mission and investments were broadened to
help all of China learn how to lead in the Drucker way.

The first strategic social investment was in a ServiceMaster franchise, after Bright China
Chairman Shao Ming Lo was in the Chicago airport and observed its cleaning crew
wearing uniforms, proud of what they were doing-in contrast to cleaning people in China
who worked on the floor with their hands, without training, equipment, or dignity. Why
couldn’t the ServiceMaster model be brought to China? Bright China invested in and
launched Bright China Service Industry, the Chinese franchise of ServiceMaster, which
started in 1998 without any employees. Within four years it had created a successful,
respectable cleaning industry in China, a watershed event. In 2006, when Bright China
Service Industry was sold to Aramark, 7,000 employees were working with pride. Chm.
Shao has not stopped tracking the company’s progress and recently noted that Aramark
grew to over 15,000 employees and won the catering contract for the 2008 Olympics.

By 1999, in part because of the Bright China Service Industry experience, Shao and his
management team had come to believe that China’s management needed training. The
team believed that the underlying Chinese culture would support and even embrace
social responsibility. Yet a manager was often seen as a controlling profit-seeker. This
prompted the second strategic social investment-a management-training institute. After
visiting and studying many of the top universities worldwide, Chm. Shao concluded that
China needed a nontraditional institute. He then went to California to visit the ninety-
year-old Peter Drucker. With Drucker’s encouragement, the Bright China Management
Institute was launched. It now has 25,000 alumni and operates programs in 10
provinces and Hong Kong with a staff of 22 full-timers and 10 part-timers.

In 2006, the institute was renamed the Peter F. Drucker Academy. The academy trains
about 5,000 students per year and is targeting 10,000 per year by 2009. The curriculum
focuses on management, incorporating the best management tools and including only
Drucker-based material with an emphasis on social responsibility. A nonprofit institution,
the academy donates all its profits to promoting Drucker’s legacy across China. In fact,
it has a department dedicated to social responsibility, which acts as a lighthouse to help
others chart their management principles. In 2007, the academy donated Drucker
archives named “Window to Drucker” to eight universities, launched free Drucker
seminars for 2,200 students, and helped student leaders set up Drucker Societies. The
academy is doubling its efforts in 2008.

The Bright China management team’s third strategic investment is in the Bright China
Foundation, established to help educate and build entrepreneurial capabilities in rural
areas and prisons. Since 2003, Bright China has invested in the foundation, which has
provided scholarships to over 19,000 students. Its entrepreneurship program operates
in six rural provinces and is targeting to train 16 million vocational students and a million
prisoners over the next five years. Each of Bright China’s investments is linked to its
overall goal: to help create a sustainable, functioning society in China with a new kind of
managerial culture, and where the level of health care and services for the less
fortunate is elevated. Bright China’s management team is currently revisiting its mission
and purpose with the aim of again broadening it to capture emerging social
opportunities, all in the spirit of better serving the society in which it operates. For
example, an effort is under way to support the needs of the emerging social
entrepreneurs in Hong Kong.

The Bright China model of linking profit, nonprofit, and education under a broader
organizational umbrella would be unusual in any nation. That this model was developed
in China is compelling evidence of the power of management determination against all
odds.

CSR: From Theory to a New Business Practice

Social responsibility will be built into the business theory that drives not just these
organizations, but many of their competitors

Reprinted from: The Next Management Revolution: Investing in Social Assets

By Elizabeth Haas Edersheim and Craig Wynett, 06/01/2008
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