Corporate Innovation Strategies: Corporate Social Responsibility and Shared Value Creation

206 Pages·2021·4.892 MB·English

by  Nacer Gasmi

Corporate Innovation Strategies
Smart Innovation Set
coordinated by
Dimitri Uzunidis
Volume 33
Corporate Innovation
Strategies

Corporate Social Responsibility and
Shared Value Creation

Nacer Gasmi
First published 2020 in Great Britain and the United States by ISTE Ltd and John Wiley & Sons, Inc.
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© ISTE Ltd 2020
The rights of Nacer Gasmi to be identified as the author of this work have been asserted by him in
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Library of Congress Control Number: 2020944437

British Library Cataloguing-in-Publication Data
A CIP record for this book is available from the British Library
ISBN 978-1-78630-654-8
Contents
Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ix
Part 1. Analysis of Factors Incentivizing Companies to Develop
CSV-based Strategies for Societal Innovations . . . . . . . . . . . . . . . . . . 1
Introduction to Part 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Chapter 1. Foundations of the Societal Strategy Based on
Creating Shared Value (CSV) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
1.1. The issues at stake in the liberal and contractual conceptions of CSR . . . . . 5
1.2. CSR as a lever for adapting corporate governance . . . . . . . . . . . . . . . . 6
Chapter 2. CSR as a Lever Which Corrects and/or Anticipates
Potential Damage to the Company . . . . . . . . . . . . . . . . . . . . . . . . . . 9
2.1. CSR as a lever to avoid pressures from socio-political stakeholders . . . . . . 9
2.2. CSR as a lever for alleviating or anticipating regulatory pressures . . . . . . . 10
2.3. CSR as a lever to avoid or mitigate the pressures exerted by soft power . . . . 12
2.4. CSR as a lever for securing a competitive advantage, reducing negative
societal externalities or producing positive externalities . . . . . . . . . . . . . . . 14
2.4.1. Labels, a tool for managing the appropriation of CSR as
differentiating attributes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
2.4.2. Process of optimizing customer focus on societal attributes . . . . . . . . 20
2.4.3. Factors determining consumer eco-responsibility . . . . . . . . . . . . . . 22
vi Corporate Innovation Strategies
Chapter 3. Innovation and Ecosystem as Key to the Success
of CSV-based Societal Strategies . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
3.1. Innovation as a fundamental lever for developing CSV-based strategies . . . . 27
3.2. Analysis of the ecosystem’s role in the process of implementing
CSV strategies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
3.3. Assessing the impact of an innovation on each stakeholder in
the ecosystem . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
Chapter 4. Value of Impact Investment for Societal Innovations . . . . . . . 51
4.1. Key steps in calculating the value of the impact investment . . . . . . . . . . . 52
4.2. Impact and ethical investment opportunities . . . . . . . . . . . . . . . . . . . 55
Chapter 5. Development Strategies of CSV-based Innovative
Business Models . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
5.1. Traditional tools of competitive analysis in CSV-based CSR practices . . . . . 58
5.2. Foundations of business models . . . . . . . . . . . . . . . . . . . . . . . . . . 61
Part 2. Analysis of the Different Environmental Innovation Strategies
Developed by One Company and their Impact in Terms of CSV . . . . . . . 65
Introduction to Part 2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
Chapter 6. Analysis of Societal Strategies Based on Ethical
Values and their Limitations with Respect to CSV . . . . . . . . . . . . . . . . 73
6.1. Issues concerning ethical values . . . . . . . . . . . . . . . . . . . . . . . . . . 73
6.1.1. Values as an instrument for enhancing the company’s image . . . . . . . . 74
6.1.2. The company’s values as an attribute of differentiation . . . . . . . . . . . 75
6.1.3. Strategy development through the practice of corporate values. . . . . . . 76
6.1.4. Factors limiting the appropriation of the company’s values by
customers in their practices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79
6.2. Comparative analysis of the values communicated by Decathlon
and the values appropriated by customers . . . . . . . . . . . . . . . . . . . . . . . 82
6.2.1. Ethical values as a substitute for CSR . . . . . . . . . . . . . . . . . . . . . 83
6.2.2. Awareness index of the values displayed by Decathlon among
the customers surveyed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 84
6.2.3. Discrepancies between the values displayed by Decathlon and
those quoted by customers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 87
6.2.4. Main factors preventing customers from adopting the values
formalized by the company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 89
6.2.5. Main limitations of the study . . . . . . . . . . . . . . . . . . . . . . . . . 90
Contents vii
Chapter 7. Analysis of CSV-based Environmental Innovation
Strategies Developed by a Company and their Impact . . . . . . . . . . . . . 93
7.1. Environmental innovations, environmental externalities and
competitive advantage . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 93
7.2. Different categories of environmental innovation and shared value creation . . 95
7.2.1. Environmental technological innovations and shared value creation . . . . 96
7.2.2. Integrated technological innovations which are not purely
environmental and shared value creation . . . . . . . . . . . . . . . . . . . . . . 99
7.2.3. Organizational environmental innovations and shared value creation . . . 104
Chapter 8. Analysis of Specific Environmental Innovation
Strategies to Each Activity of the Decathlon Group . . . . . . . . . . . . . . . 107
8.1. Analysis of the Decathlon Group’s environmental policy based on CSV. . . . 109
8.2. Analysis of the contributions of Decathlon Group’s environmental
innovations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 112
8.3. Environmental innovations related to product and production activities . . . . 115
8.3.1. Integrated technological innovations related to products and
processes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 115
8.3.2. Organizational environmental innovations . . . . . . . . . . . . . . . . . . 118
8.4. Environmental innovations related to site construction and operation . . . . . 122
8.4.1. Organizational innovations related to energy optimization . . . . . . . . . 123
8.4.2. Organizational innovations related to waste and water . . . . . . . . . . . 124
8.5. Environmental innovations related to transport . . . . . . . . . . . . . . . . . . 125
8.5.1. Organizational innovations related to site reconciliation and
packaging design . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 126
8.5.2. Organizational innovations related to modes of transportation . . . . . . . 127
8.6. Main positive impacts resulting from the various environmental
innovations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 128
Part 3. Analysis of Social Innovation Strategies Based on CSV
and their Impact on the Company and Society . . . . . . . . . . . . . . . . . . 131
Introduction to Part 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 133
Chapter 9. Foundations of Social Innovations for Consumers . . . . . . . . 135
9.1. Social innovations for low-income consumers . . . . . . . . . . . . . . . . . . 135
9.2. Social innovations for the well-being of the poor . . . . . . . . . . . . . . . . . 139
9.2.1. Characteristics of the BoP (Bottom of the Pyramid) social
business model . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 139
9.2.2. Analysis of different forms of BoP social business innovations . . . . . . 142
9.2.3. Benefits and outlook of CSR-BoP . . . . . . . . . . . . . . . . . . . . . . . 144
9.3. Social innovations for all consumers . . . . . . . . . . . . . . . . . . . . . . . . 145
viii Corporate Innovation Strategies
Chapter 10. Analysis of Various Managerial Innovations Likely
to Motivate Employees to Engage in their Work . . . . . . . . . . . . . . . . . 147
10.1. Social innovation based on organizational ethics and its impact
on employee engagement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 149
10.1.1. Foundations of organizational ethics . . . . . . . . . . . . . . . . . . . . . 150
10.1.2. Process for implementing management based on
organizational ethics . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 151
10.2. Managerial innovation based on the higher purpose of employee
involvement and commitment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 154
10.3. Social innovation based on teleworking and employee engagement . . . . . . 157
10.4. Managerial innovation based on the role of feedback and respect
in the employee motivation process . . . . . . . . . . . . . . . . . . . . . . . . . . . 158
Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 161
References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 167
Index . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 185
Introduction
Human behavior has always been evaluated, both in terms of its effectiveness
and acceptability. Companies are not immune to this type of behavior (Pasquero
2007). The effective component of corporate behavior, which is associated with
financial performance, has always been at the heart of corporate discourse. This
performance has led companies to only focus on innovation strategies that are likely
to further enhance their competitiveness and therefore their profitability. Yet,
increasingly, the acceptable dimension of their activities for external and internal
stakeholders is also becoming a decisive strategic issue for companies. In recent
years, there has been an expectation from consumers that a company’s brands should
not only offer them functional advantages, but that companies should also invest in
corporate social responsibility (CSR) initiatives, that is, community initiatives. Since
World War II, through their activities to create value (profit), multinationals have
generated significant growth that has made it possible to significantly reduce the rate
of global poverty and to create positive externalities, such as new jobs, new services
and state budgetary contributions through various taxes (Kaplan et al. 2018).
Unfortunately, this growth has not benefited all populations. In developed
economies, the most recent gains have benefitted a small proportion of the population,
while many members of the working, rural and urban classes have suffered as a result
of socio-economic decline. In addition, these enterprises often induce negative social
and/or environmental externalities, such as lay-offs, psychosocial risks, occupational
accidents and pollution due to climate deregulation. The trajectory of production
models is always shaped by the economic, social and political climate of a given
period. Until the 1980s, responses to problems of social responsibility were part of a
reactive approach to gradually adapt to environmental and social regulations (Berry
and Rondinelli 1998).
x Corporate Innovation Strategies
While the idea of CSR is sometimes presented as a novelty (d’Humières and
Chauveau 2001), concerns about the consequences of economic activities have
always been prevalent. The idea of CSR, which involves discourse and practice
between businesses and society, dates back at least to the beginning of the 20th
Century in North America (Acquier and Gond 2007). In the industrial era,
paternalism was an early modern form of CSR. Today, social practices must be
sustainable because, as Lars Rebien Sorensen, CEO of the Novo Nordisk Group,
pointed out, “corporate social responsibility is nothing more than maximizing the
value of the company over time, because in the long run, social and environmental
problems become financial problems” (Ignatius 2015). The justification for CSR is
associated with the representation of the nature and role of the enterprise and its
raison d’être.
The more a company is concerned about the impact its activities may have on the
rest of society, the more it is considered a socially responsible company (Pasquero
2007). CSR thus becomes an exemplary positive theoretical approach, as it
challenges the contractual-legal vision of the company. This contractual vision of
CSR, which advocates a more partnership-based approach to corporate governance, is
part of the process of creating shared value (CSV). The correlation between societal
progress and commercial success is becoming increasingly apparent. To this end, “if
all companies could stimulate societal progress in all regions of the world, the result
would be a decrease in poverty, pollution, disease, and an increase in corporate
profits” (Kramer and Pfitzer 2017). According to these authors, there are two
reasons why CSR practice has become imperative for companies. The first concerns
the questioning of the legitimacy of businesses, which have come to be perceived as
thriving at the expense of the community as a whole. The second relates to the
numerous global problems, ranging from inequality to global warming, which are of
such magnitude that solutions require the expertise and inspirational models of the
private sector. Much of the work on CSR focuses on its contributions to business and
society. This type of strategy involves devising responses to social and
environmental problems generated by a company’s internal activities, or to problems
that are external to it. Until the 2000s, strategies for integrating these issues were
mainly the prerogative of large companies. Environmental and societal issues, which
threaten people and companies in all countries, require companies to redefine their
societal strategies and business philosophy, in order to create new value and prosper,
by sharply reducing negative societal externalities generated by their activities, or by
creating positive externalities (Winston 2017). Thus, all companies, whatever their
activity and size, must take into account both financial and non-financial issues in
their daily management, that is, to move towards global performance, because, as
Lash and Wellington (2007) point out, societal issues present risks that may be
irreversible for them and for society. Companies’ interest in societal issues and their
solutions is part of a strategic logic that requires all organizations to formalize their
ideology. This ideology includes all of their values (social, environmental,