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“This compact book ... contains all one needs to know about getting a company up to speed on being a socially responsible operation ... It’s all there in this one small package — enough practical wisdom to guide business practice in needed and desirable directions.”
William C. Frederick
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Almost every manager today knows that satisfying customers
by meeting their quality demands is a critical component of business success.
Quality management is a given in modern companies - a competitive imperative.
Yet it was not always so. Back when the quality movement was getting started,
few managers really understood either the importance of quality to customers or
how to manage for quality. Much the same could be said today about managing
responsibility. Why and how should responsibility be managed? What is
responsibility management? Total Responsibility
these questions while at the same time providing a systemic framework for
managing a company's responsibilities to stakeholders and the natural
environment that can be applied in a wide range of contexts.
This framework uses managerial familiarity with quality management to illustrate the drivers for responsibility management. Companies know that product or service quality affects their customer relationships and the trust customers have in the company's products and services. So, too, a company's management of its responsibilities to other constituencies affects its relationships with those other stakeholders and the natural environment. But why bother? The answer is quite simple. Never has it been easier for employees, reporters, activists, investors, community members, the media and other critical observers to find fault with companies and their subsidiaries. A problem identified, even in a remote region or within a remote supplier, can instantaneously be transmitted around the world at the click of a mouse. Ask footwear, toy, clothing and other highly visible branded companies what their recent experience with corporate critics has been and they will tell you about the need to manage their stakeholder responsibilities (human rights, labour relations, environmental, integrity-related) or face significant consequences in the limelight of public opinion.
Managers will discover that whether they do it consciously or not, they are already managing responsibility, just as companies were already managing quality when the quality movement hit. This manual makes the process of managing responsibilities to and relationships with stakeholders and nature explicit. Making the process explicit is important because too few of today's decisions-makers yet understand how they are managing stakeholder responsibilities as well as they understand how to manage quality.
Managing responsibilities goes well beyond traditional 'do good' or discretionary activities associated with philanthropy and volunteerism, which are frequently termed 'corporate social responsibility'. In its broadest sense, responsibility management means taking corporate citizenship seriously as a core part of the way the company develops and implements its business model. The specifics of responsibility management are unique to each company, its industry, its products and its stakeholders, yet, as this manual illustrates, a general approach to managing responsibility is feasible — indeed, is increasingly necessary.
Based on work undertaken by Boston College and the International Labour Office, Total Responsibility Management is the first CSR manual. Its original case studies add value to a range of tools and exercises that will make it required reading for all managers in need of a practical guide to managing responsibility and to students and researchers looking for an overarching framework to contextualise the changing responsibilities of global business.
“Big CSR Wisdom in a Small Package”
This compact book (180 pages) contains all one needs to know about getting a company up to speed on being a socially responsible operation. My OED defines a manual as “a small book for handy use; a concise treatise; a book of instructions for learning a subject” — precisely what you will find here. It’s tailor-made for today's corporate executive who seeks a practical way to instill CSR throughout the firm. A perfect item for any executive education program promoting social responsibility and sustainability.
Total Responsibility Management (TRM) puts it all together into one “systematic framework for managing responsibility for all of the companies’ stakeholder- and natural environment-related activities.” The result is a blend of theory and practice — Waddock’s holistic vision-and-values and Bodwell’s wide-ranging global field experience with the Swiss-based International Labour Office. In fact, TRM is an extension of the ILO’s Factory Improvement Program (FIP) developed earlier by Bodwell which keeps an eye on supply-chain labor practices. Lending credibility to TRM’s potential are several short case examples written by Jennifer Leigh.
So, what is TRM and how does it work? It is heavily indebted to stakeholder management, no surprise to CSR followers. And although it appeals to the pragmatic side of corporate management by offering a parallel to the doctrine of Total Quality Management (TQM), the authors are not shy in reminding corporate leaders that they are constantly exposed to the risk of being labeled bad actors by ignoring the rights and interests of a whole host of stakeholders, each one holding a cell phone-camera with instant connections to the Internet. While true, one can’t help but wonder if this is the best way to arouse enthusiasm for TRM — eliciting good behavior on penalty of otherwise incurring bad publicity. Of course, you can argue — and the authors do — that it has worked in the past in some famous cases. Perhaps thatís the kind of world we live and do business in, more’s the pity.
More positively, TRM proposes that companies should engage in a four-phase process:
- Inspiration: Projecting a vision and a company mission based on the values of integrity and sustainability, achieved through an active program of stakeholder engagement
- Integration: Melding vision and strategy by building responsibility into all phases of management
- Innovation and Improvement: Addressing errors and shortfalls through continuous feedback from involved stakeholders that guides remediation and innovation
- Performance Indicators: Measuring a company’s TRM progress by assessing how well it meets international standards for economic, social, and environmental performance, along with transparency and accountability
The authors admit that TRM is no slam dunk. Companies serve diverse markets and do business in stunningly different cultural settings. The stakeholder idea is anathema to some businesses, and totally unrecognized in some societies. Shareholder dominance — a single-minded stakeholder focus — prevails from Wall Street to London to Tokyo.
So why do visionary Waddock and tough-minded ILO negotiator Bodwell believe that TRM’s time has come? Because “TRM make(s) good business sense.” The belief is familiar to long-time observers of the CSR scene who say that companies can “do well by doing good.” This time, the argument is a bit more pragmatic but still not new. Managing stakeholder ties strategically leads to improved employee relations, higher morale, and increased productivity. So too are there advantages of (long-term) cost savings from environmental production safeguards that reduce waste and save energy. Not to speak of not being hassled so frequently by activist NGOs ever ready to pounce on corporate misdeeds. In other words, tightening up a firm’s management techniques in light of multiple stakeholder interests leads to more responsible behavior inside and outside the company — and a lowering of costs (employee turnover), competitive marketing advantages (better brand recognition), a polished public image, and a more financially secure future.
Some skeptical readers may say, Show me the evidence. And that is where the case examples become important. These ten cases, short and well-written, display what a TRM approach can do for a wide variety of companies. However, the case evidence is ex post TRM, not ex ante. That’s understandable since the authors propose TRM as a newly conceived comprehensive system of managing responsibly. Their case will be more convincing when they can show that companies, with deliberate forethought, adopt and act on the TRM methodology per se. These ten companies, without that guidance, somehow found pragmatic ways to satisfy stakeholders and confront some of the many CSR problems that arise in today’s business world. But that’s one of the authors’ main points: Such companies have been managing stakeholder relations responsibly without using the TRM label, just as earlier companies improved product quality without the TQM label. In other words, there need not be an unbridgeable gap between socially responsible management and financially successful performance. A consciously-adopted TRM approach can be the bridge linking these two important goals.
I showed this TRM manual to an executive acquaintance who has been a successful CEO of a handful of high-tech companies and asked him to tell me what he thought. His comment: “Begins and develops well, but the final chapter is missing.” The lack of closure he felt may suggest a need for more how-to-do-it specificity, but I suspect the authors wanted to leave plenty of room and imagination for diverse companies to fit TRM into their particular situations and cultures.
For any company that wants to chart a CSR path, this manual shows how to get
started. TRM provides the social and business rationale, demonstrates the
practical steps needed, describes the social and financial payoffs involved, and
places the entire process within easy range of hard-nosed pragmatic executive
thinking. Total Responsibility Management is indeed within the grasp of any of
today’s global companies. No longer must their managerial reach exceed their CSR
grasp. TRM brings them together. It’s all there in this one small package —
enough practical wisdom to guide business practice in needed and desirable
William C. Frederick
1. What is responsibility management? And why bother?
2. The business case for responsibility management: the new business imperative
3. Building integrity and sustainability systemically
4. Inspiration: vision setting and commitment processes
6. Improvement and innovation systems
8. Getting started: change management and the complexity of being ‘glocal’
|Sandra Waddock is Professor of Management at Boston College’s Carroll School of Management and Senior Research Fellow at BC’s Center for Corporate Citizenship. She holds MBA and DBA degrees from Boston University and has published over 100 articles on corporate responsibility, corporate citizenship and inter-sector collaboration in journals such as The Academy of Management Journal, Academy of Management Executive, Strategic Management Journal, The Journal of Corporate Citizenship, Human Relations and Business and Society. Author of Leading Corporate Citizens (McGraw-Hill, 2nd edn 2006), co-editor of Unfolding Stakeholder Thinking (Greenleaf Publishing, 2002, 2003), and Learning to Talk (Greenleaf Publishing, 2004), she is a founding faculty of the Leadership for Change Program, co-founder (with Steven Lydenberg and Brad Googins) of the Institute for Responsible Investment, initiated Business Ethics’ 100 Best Corporate Citizens ranking with co-author Samuel Graves and editor Marjorie Kelly, and edited The Journal of Corporate Citizenship from 2003 to 2004. She received the 2004 Sumner Marcus Award for Distinguished Service from the Social Issues in Management Division of the Academy of Management, and the 2005 Faculty Pioneer Award for External Impact by the Aspen Institute Business and Society Program and the World Resources Institute. She has been a visiting scholar at the Harvard Kennedy School of Government (2006–2007) and University of Virginia Darden Graduate School of Business (2000).|
|Charles Bodwell is currently the manager
of the ILO’s Factory Improvement Programme (FIP), a Swiss- and US-funded
project linking competitiveness with improved labour practices. As with
TRM, FIP takes a holistic view of organisations, focusing on establishing
strengthened systems, improved measurement, broad-based involvement and a
commitment to continuous improvement. With FIP, Charles is currently
working with auto and motorcycle parts supplier factories in India and
garment factories in Vietnam and Sri Lanka (see more on FIP). Prior to taking over FIP,
as a senior specialist in the International Labour Office his work focused
on corporate citizenship and supply chain issues, in particular the CSR
efforts of large multinational enterprises. It was while based at ILO
headquarters in Geneva that he developed, together with Sandra Waddock,
the TRM model as well as the FIP approach to upgrading production
facilities. He has been a graduate researcher at Cambridge University,
visiting professor at the Helsinki School of Economics and visiting
scholar at Stanford University. He has worked for IBM, Agfa and
Schlumberger, while also consulting to various Fortune 500
companies. He has an MBA from McGill University and a Master’s of
International Management from ESADE. He currently lives in Bangkok,
Thailand, with his wife Ivanka and three sons, Tomi, Matija and