Let’s discover how a company can merge its CSR-based commitment and a Strategic Performance Management Model into a really responsible and sustainable strategy.
Corporate behaviour appears to be and to grow up being the main topic in the consumer assessment and evaluation of a company.
The ever changing and growing laws and regulations, a new cultural, environmental, social awareness impose a variety of issues, rules and knowledge dramatically wider than before to be faced. And it may be hard and costly for most companies.
On the other side, a strong commitment to ethical responsibility and sustainability may further and propel the company’s image and, after all, its performances.
As a consequence, managers need to be able to evaluate whether and how the company’s performances depend on a responsible engagement.
In my recent experience, the integration between Corporate Social Responsibility (CSR) principles and a strategic performance management platform has been appearing essential in pursuing the company’s strategy.
While other Balanced Scorecard (BSC) Models add new perspectives to the four traditional ones, an innovative approach to a BSC Model suggests to integrate and balance four CSR categories such as Ethics, Environment, Community, Governance into the traditional four perspectives of growth and learning, internal processes, customer relationship, and finance.
This articulation assures that any of the four usual perspectives be investigated according to all the CSR principles.
In the first table we show a sample of how CSR categories (Ethics in the example) can incorporate the BSC perspectives.
| BSC Perspective | CSR Obj. Category | CSR Objective |
|---|---|---|
| External | Ethics | Correct quality/price relationship of the product/service |
| External | Ethics | Marketing policies ensuring advertising truthfulness |
| External | Ethics | Regular (ITT) Invitation To Tenders and (ITB) Invitation To Bids management |
| External | Ethics | Truthfulness and honesty in applying for authorizations, permits, licences, etc. |
| External | Ethics | Truthfulness, timeliness and honesty in managing fines and sanctions |
| Financial | Ethics | Capital reward sharing |
| Financial | Ethics | Ethical investments in the long term |
| Financial | Ethics | Adequate wage policy |
| Financial | Ethics | Fair and prompt payment guarantees for suppliers and employees |
| Internal Process | Ethics | Informative transparency |
| Internal Process | Ethics | Security and hygiene |
| Internal Process | Ethics | Controls ability of preventing from creating extra accounting funds |
| Internal Process | Ethics | Regular Balance Sheet preparation |
| Learning and Growth | Ethics | Transparency and thoroughness of Internal Processesernal communication |
| Learning and Growth | Ethics | Thoroughly extended perception of ethical values |
| Learning and Growth | Ethics | Definition of a Code of Ethics and a Disciplinary System |
| Learning and Growth | Ethics | Communication and diffusion of the Code of Ethics and the Disciplinary System |
In the following BSC-based table we show how a sample of the External perspective can be rearranged to incorporate some CSR instances.
| BSC Perspective | CSR Obj. Category | CSR Objective |
|---|---|---|
| External | Environment | Ethical purchasing policy, giving priority to suppliers with sound environmental practices |
| External | Ethics | Correct quality/price relationship of the product/service |
| External | Ethics | Marketing policies ensuring advertising truthfulness |
| External | Ethics | Refrain from using goods or services produced with child or prison labor |
| External | Ethics | Transparency and thoroughness of external communication |
| External | Ethics | Truthfulness and honesty in applying for authorizations, permits, licences, etc. |
| External | Ethics | Truthfulness, timeliness and honesty in managing fines and sanctions |
| External | Governance | Correct Board of Auditors and Auditing Firms relationships |
| External | Governance | Competitive Positioning |
| External | Governance | Correct relationships with Public Institutions and Security Agencies |
| External | Governance | Supply and service compliance to rules and regulations |
| External | Governance | Timely response to customers complaints |
| External | Governance | Effective contract management |
| External | Governance | Correctness and regularity in Purchase Orders to suppliers |
| External | Community | Contributions to local development |
| External | Community | Cooperation in community projects |
| External | Community | Policies prioritizing local suppliers and employees |
| External | Community | Partnership and cooperation with communities for pursuing mutual goals |
The multidimensional approach that these tables suggest allows the CSR objectives and the BSC measures to be investigated from either point of view.
In an overall vision of the above outlined approach, any individual working in the Company, or for any reason involved with its business and management, will surely acknowledge, and adapt him/herself to, the strategic importance of sustainable behaviour as essential to the survival and success of the Company.