CHAPTER 1 | Wccescuie Ever wondered what the inherent connection between corporations and society is? It may be a lingering question to you how these add up or work in the larger scheme of things. Let us welcome you to the world of corporate social responsibility and corporate governance. Some may still be foreign concepts, and even for some practitioners, this may always be a topic for polarizing views and perspectives. In this book, we will uncover the whole schema of its importance and relevance to our lives. Diagnostic questions: 1 z, 3. What is a [Link] you? What, for you, are the values and mores that make up a good organization? What do you think is the role of management in the survival of a company? Do you believe that corporations should behave ethically and be morally accountable to society at large?i ise dette) ‘The Corporation — olders created by an individual or group of share 15 of stocks issued by the ‘ nes a corporation as a structure and labor generally [Link] isa legal entity corporation) to corporation (through share and Minow (2011) defi fae s to contribute to capital, expertise, corporation i types of shares have ownership of the engage in business activities. Monks established by law to allow different parties or the maximum benefit of all of them. Their ownership of the represented by their holding of common stock (one share = one vote). Certain pes ofshars can have more voting rights or dividend priority, as expressed in the company °Y Hie all corporations though are formed with the objective of profit-making, such as ch institutions, nonprofits, or nongovernmental organizations (NGOs). But the majority o corporations are formed to provide a return for their shareholders. Since the inception of the corporation in the nineteenth century, they have been part of our daily lives as we need the products and services from these corporations (food, utilities, housing, and the like) to survive. It hag been a popular form of business organization because of four appealing attributes: limited liability, transferability of ownership, legal personality, and centralized management (Clark, 1986, cited by Monks & Minow, 2011). In cases of bankruptcy, owners of corporations may protect their assets from being foreclosed or confiscated, and creditors can only recover debts incurred by the company through the liquidation of remaining assets owned by the company. Individual liability is avoided. Transferability allows a shareholder to sell his shares of stocks in the stock market freely should he/she decide to let go a part or all of his shares unless explicit stated in the s 'S explicitly i corporate bylaws, , Corporations are legal entities and are sometimes defined as i “legal ” Corporations are allowed to perform functions that humans make, suc = Pesan h as buying and selling properties, owning copyrights, patents, trademarks, and engaging i business activities. Corporations have an indefinite life « ging in any other generation to generation, pan that can survive fromae (4) ‘The Philippine Corporation AN yd2 feb 23,2019 Lm imum number According to the 2019 Revised Corporation Code (RCC), there is no of incorporators (directors) but shall not have more than 20, and each of the incorporators (directors) must own at least one share of stock. ‘Today, a corporation is granted a perpetual corporate term (in lieu of the previous 50-year term). There is also the removal of the required subscribed / paid-up capital, and residency of incorporators was made to keep up with global standards. The most significant change done was the introduction of the One Person Corporation (OPC). ms: enhancement of ease of doing business in onalized corporate governance and improved policies and The RCC focuses on four areas of refor the Philippines; fortified stockholder protection and instituti provisions; emphasis on corporate social responsibility; regulatory corporate framework. Importance of Social Responsibility and Good Governance ‘The way a corporation conducts its business has profound effects on individuals in the societies they operate. Corporations have continued to grow and can sometimes influence government policy through political lobbying. Imagine @ society where drinking water becomes a problem when its water resources are being polluted by companies dumping their waste into lakes, rivers, and oceans oF when you wake up one day to find out that the bank where you have put all your savings into collapsed overnight. Who should be accountable? How do you, as, an individual member of to good governance? At length in the succeeding chapters, we shall society, contribute 5 in which stakeholders contribute or do their part in be discussing the various way addressing these issues. Corporate Social Responsibility Corporate social responsibility (CSR) is a manifestation of good corporate governance, a complementary concept that we will be discussing more in-depth in Chapter 3. CSR is the responsiblity of companies to act and behave ethically to satisty cholders’ needs. It is an ongoing commitment of organizations to to the stakeholders their existence impacts. The foremost authority , views CSR from four different perspectives as their various stak ensure accountability on this subject, professor Afchie Carroll illustrated on the next page. CHAPTER1 | SOCIAL RESPONSIBILITY FRAMEWORK = 3Philanthropical (Above and / beyond compliance). senna \ / Ethical (Do what is \ A right) x / Legal (Follow rules) Carroll (1991) provided four dimensions that provide a structure or framework that characterizes companies’ responsibilities within societies: Economic - An expectation of profit is natural when sharchoiders form corporations, The lowest layer of the pyramid suggests that companies must first be profitable after they have paid their obligations to employees and suppliers, and conform to consumers’ needs and demands. This is the very foundation and required of all corporations. Legal - A corporation i created through law and, as such, must abide by the rules and regulations imposed for faimess and justice. Much like economic responsibilities, itis required for companies to be legally compliant as well. Ethical - Doing what is right for stakeholders is what ethical companies should aim for. Society expects companies to take on this responsibility beyond what is required of them legally. We will look into the concept of ethics in more detail in the next chapter. Philanthropic — To fulfill this responsibility, companies need to truly embrace philanthropy, meaning, issues that pertain to the improvement of human lives must be addressed without compromise. This responsibilty, however, is not required nor expected but rather desired by companies, . 4 | GOOD GOVERNANCE AND SOCIAL RESPONSIBILITYA Brief History of CSR CSR can be traced back to the industrial revoltition when there was a growing concern industrial revolution for the well-being of workers and its effect on their productivity. Th still, the downside of indust was responsible for the economic growth of nations. that contributed to social problems (such as increased poverty and unfair labor practices, among others) became advocacy for reformers. CSR slarted as a philanthropic endeavor of suce men who wanted to do good through their donations to help the underprivileged. A rise in nations’ wealth brought about an increase in philanthropists such as Carnegie and Rockefeller in the United States. sful busin CSR was officially introduced in the early 1950s through American economist and educator Howard Bowen’s (1953) seminal work on social responsibility. Bowen paved the way for the succeeding academic research and management practice of CSR. The last 40 years, beginning in the 1970s, saw marked developments in CSR as companies started to be more aware of their social responsibility. In the 1980s and 1990s, more companies became more responsive to the various stakeholders due to social activism. At the turn of the twenty-first century, CSR has become an integral part of organizational strategy and rightfully, so companies do not exist in a vacuum. In the Philippines, CSR started as donations from various businesses in the 1960s. ‘Activities from this decade were unorganized and sporadic. The 1970s saw more coordinated efforts between companies and intermediaries. The end of the Marcos regime in the 1980sand its adverse effects on the economy led to a closer collaboration between donors and donees. CSR flourished in the 1990s as companies acknowledge their role as social catalysts. And from the 2000s onward, CSR has become an essential part of a company’s identity (Roman, 2007). Top companies stazted to approach CSR as an integrative strategic management tool, CSR how is a universally accepted norm of good corporate governance. The Business Case Economist Milton Friedman (1970) argued that the sole responsibility of corporations the shareholders and that it is the government's responsibility to .ds, Friedman's view on CSR may be considered archaic, given that corporations engaging in CSR actively increase their is to generate profit for provide for society’s nee the growing empirical evidence business, thereby creating more value for the company. In the study of CSR, the business case has been a long-standing argument in the academe and practice. The business case for CSR refers to reasons why businesses should support and accept the CSR agenda. By doing so, these companies will behave more responsibly. Supporters of CSR espouse this because studies have shown a strong correlation between CSR and corporate financial performance (Yusoff, Mohammad, Torugsa, 0’ Donohue, & Hecker, 2012). & Darus, 2013; CHAPTER: | SOCIAL RESPONSIBILITY FRAMEWORK 5Drivers and Barriers of CSR sof the barriers | How ean one strengthen the propagation of CSR? And what are some of Ts it needs to contend with for companies to embrace it fully? Below is an illustration of the opposing forces of CSR: BARRIERS DRIVERS fialechiaeniacs Geet feelise Melee steels Profit Gefarlemavsu) finales PIES ee ceili) human resources Sagi Drivers: Regulation ~ Regulation and law provide a framework that companies must comply with. This is in relation to the legal dimension of Carroll's CSR framework discussed previously. For instance, in China, CSR is no longer a voluntary act but is mandated by the central goverriment (Hudtohan é& Zhang, 2018). $ Market behavior ~ Benchmarks have been established because of companies’ best practices that use CSR as a builder of reputation; how’ the market behaves a influences; and how companies engage in their respective CSR initiatives and i become a source of competitive advantage. — Social activism - How stakeholders in society react and voice out their’c corporations publicly through various means (such as social media, dem ania’ Tawsuits, and the like) have impacted how organizations behave. Seont ne saarsither Be ifemally or eXtetal Hite ieantngioottpinkesdb nee cee ee have to respond to public clamor but can internally drive change fro pecciumly organization. i wilt ie Culture - Culture is a mixture of beliefs, norms, symbols, and the heri particular country or geographic area shares and practices. This is fete ov over time 6 | GOOD GOVERNANCE AND SOCIAL RESPONSIBILITYand becomes part of its normative values. For CSR and good governance to thrive, @ culture of benevolence and philanthropy must be ingrained or deeply embedded in an organization. ° Strategy ~ Perhaps the most significant driver of CSR is strategy. Integrating CSR in its planning from the different functional areas of a company fortifies the relationship and becomes a creator of value that benefits the corporation in the long term. It is also important that the focus and objectives of a company’s desired CSR initiatives must be clearly articulated to its internal (management) and external partners (beneficiaries/ intermediaries which will be discussed in the next chapter). Barriers: Limited financial resources - As with Carroll's economic perspective of CSR, a company needs to be profitable and take care of its own needs before it has the ability and resources to engage effectively in social responsibility. CSR requires a long-term stance in its commitment of resources to truly see the benefits of its initiatives. Profit maximization - A company -that single-mindedly focuses on operational efficiency is usually driven by profit maximization. According to Kolstad (2007), most executives support the Friedmanian view of maximizing returns to shareholders despite the growing literature on CSR's positive effects on corporate financial performance, persistence, and acceptance of maximizing profits act as barriers to CSR. Availability of human resources—No matter how good the intentions are in promoting, CSR in organizations, it will need efficient mobilization through employee involvement and engagement in its programs. Without the support of human resources in its implementation, CSR activities will be lackluster. Measuring CSR ‘The purpose of measurement is to understand what is being measured better and lay the groundwork for improvement. CSR is a management concept that is not easy to measure. Unlike other functional areas where tangible measurements have been developed for quite some time, market share, customer satisfaction, attrition rate, turnaround time, financial ratios, goodwill, loyalty, and social/environmental impact are just some CSR concepts that cannot be accurately measured. But all these intangibles can be translated into measurable variables that can provide indications of relationships and outcomes. Measuring CSR provides several benefits, such as helping organizations make better decisions on allocating resources with the greatest impact, improving processes that will make CSR initiatives more efficient, and providing more support for the business case. (GAFTER1 | SOCIAL RESPONSIBILITY FRAMEWORK 7Kaplan and Norton’s (1996) Balanced Scorecard is an example of an pean strategic measurement system. Illustrated below is the authors’ framework | ry . lich, companies can include both tangible and intangible measurements that can identify if goals are met in each of the four dimensions (financial, customer, processes, and learning and growth). Metrics must be carefully identified for each objective. Application of this scorecard is also dependent on the specific need or circumstance of a company and may be adjusted accordingly. a | Toternal Busines Process i. = = ee SS Spemwer [Sine teen tem Saar Ss Vision and ta a Strategy Lesring and Goma 8 | GooD GovERNANcE AND: SOCIAL RESPONSIBILITYIn recent years, with the growing emphasis on employee happiness and good corporate governance, ideal results such as employees’ well-being, ethical behavior, and other factors have been considered as part of a company’s “bottom line,” and these contribute to multiple bottom-line reporting. As human development continues to pense in the future, the traditional look at the bottom line (profit) is already a thing of the past. Leadership Leadership has a key role in influencing CSR. Both CSR and leadership are founded on concepts of service, integrity, and inspiration to others. The relationship between them is mutually empowering and transforming (Guarneri & Kao, 2008). Employees and managers as members of organizations are naturally concerned about, contribute, and react to their organization's social consciousness (Rodrigo & Arenas, 2008), particularly to their leaders’ commitment to CSR. Leader perceptions provide evidence regarding their CSR attitude and acts of the leaders can trickle down to affect employees’ subsequent attitude, behavior, and actual engagement through volunteerism. A leader must also be able to communicate their CSR stories internally and externally effectively. These stories through internal memos, press releases, social media, and others contribute to companies’ reputation. Usually, large companies have a corporate communications group to assist the leadership in their CSR efforts. It is therefore critical that whatever accomplishments have been made by their initiatives and programs, have to be made known to the various stakeholders for CSR to thrive and progress even further in the long term. Ina study by Ng and Rivera (2018), the Filipino concept of “kapwa” (fellowship) is considered to be an essential component of effective leadership. Church and Katigbak (2002) defines “Kapwa” as a shated identity with others. This is rooted in the Filipino’s notion of “kapwa” which “embraces both the categories of ‘outsider’ (ibang tne), and ‘one of us’ (hindi ibang tao)” (Enriquez, 1986, p. 16) and sparks genuine concern. The cultural basis of Philippine CSR may be viewed from the concept of fellowship, which has parallel conceptual foundations with leadership. Future of Philippine CSR : “Corporate Social Responsibility has become integral for most companies as it becomes an opportunity to wholly and directly engage stakeholders, creating shared value for both the organization and the communities it serves. It goes beyond profit, It becomes about serving the Filiping, and is a clear reflection of the values that your company stands for. With the current global trends on sustainability and community CHAPTER | SOCIALRESPONSIBILITY FRAMEWORK 9)cli connectivity, | believe that CSR will be critical in mapping out company Policies, especially when it comes to serving the best interest of the greater public: Mr. Chito Bauzon AvP-CSR Marketing SM Cares (SM Supermalls) ‘The future of CSR in the Philippines is promising and continually evolving, The F driver of this evolution is awareness of the individual that his/her contribution to society is ever-increasingly important. As the environment deteriorates because of geopolitics and differing expert opinions, certain individuals such as Greta Thunberg can bring CSR issues to the forefront. Top Philippine corporations, such as Ayala Land, BDO Unibank, Coca Cola Philippines, Globe Telecoms, and many others are leading the way in setting examples on how to embed CSR in their corporate strategies Hudtohan (2009) argues the criticality of the individual social responsibility in shaping CSR that leads to sustainable development. It is the individual, not corporations that will act as the catalyst for the socio-political-economic influence of a nation. Volunteerism and activism will be one of the key drivers in furthering the progress of CSR. Full disclosure and transparency will also be the norm. Synergy among the socio-political-economic is crucial if CSR is to be effectively carried out. The Philippines is abiding by international regulatory frameworks so that CSR will be universal in its approach. After all, we all live on the same planet and breathe the same air. The survival and sustainability of the human race is a common goal, regardless of gender and race. Exe Mini Case Study “Starting right...where and how do I give back to society?” Mrs, Caroline Caballes-Suntay, CEO of Storage Solutions Philippines, started her business a decade ago. She entered into this business after gaining valuable experience from her professional retail work here and abroad. Her business steadily grew and one day she came to the realization: What is next? She spoke to her former superior/meniee and asked how she can give back to society. She thought of: (1) improving further the ives of her employees with emphasis on empowering women; (2) Providing more support and commitment to Jocal manufacturers that she uses in producing, her merchandise, and (3) contributing’ to the care of the environment given the nature of her business (storage items, such as travel kits, wallets, organizers, and the like, made of plastic, fabric, leatherette, and other hatural and synthetic materials). 10 | GOOD GOVERNANCE AND SOCIAL RESPONSIBILITYCHAPTER 2 STRATEGIC MANAGEMENT OF STAKEHOLDER RELATIONSHIP | PN year lileya) ) From our definition of CSR from the last chapter, it is an ongoing commitment of organizations to ensure accountability to the stakeholders its existence has an impact on. On. the other hand, strategic CSR may be explained as a process in which businesses evaluate their various stakeholders’ changing demands and how these demands are to be met or satisfied. The process by which to create strategic CSR must involve thought-out planning and execution. Whatever the company’s plans have on its CSR, it cannot be effective unless the strategy aligns its stakeholder concerns with corporate goals. Diagnostic questions: 1. Who would you consider society’s stakeholders? 2, _ Is it important to manage relationships with the various stakeholders of the company? Why? 3. What is the purpose of the strategy? 4. How can one create value for a company? 13Pesporaton What is strategy? Astrategy is defined as a plan of action taken to achieve objectives. The process of the Strategy involves three steps: formulation, implementation, and evaluation (David, 2017), Strategic management is a process of creating, a competitive advantage over its competitors and sustaining this advantage in the long term, The process of strategic management is illustrated below: 3 eran and scan environment asec ee = Establish goals ~ This is initially performed by creating and/or clarifying your business vision / mission and identifying goals objectives. 1. __ Vision: what the company envisions itself to be in the future or to become 2, Mission: describes what the company is all about, who they are, what and how they do things, and for whom 3. Goals: desired outcomes of planning, broader than objectives 4, Objectives: aimed targets that are needed to achieve goals Scan environment ~ Perform a thorough analysis and assessment of the internal and external environment of the company. 1, External: looks atthe external opportunities and threats, given the dynamics of a particular industry 2. Internal: looks at a company’s strengths and weaknesses by assessing its resources 14. | Coop GOVERNANCE AND SOCIAL RESPONSIBILITYFormulation ~ develops top-level strategies that can be trickled down to the rest of the organization Implementation ~ executes developed plans by providing detailed objectives and action plans Evaluation ~ measures and assesses results, and recommends changes for improvement if necessary Who are the stakeholders? Stakeholders are individuals or groups of people who can be affected by the activities engaged in by corporations in achieving their goals. Key stakeholders are shareholders (investors, owners, partners, or anyone who hasa financial stake in the company), customers, employees, suppliers, and society (government, civil society, institutions). Stakeholder Theory ‘One of the key arguments used in understanding CSR is the stakeholder theory. This theory states that companies are responsible for generating reasonable profits for their shareholders but should also be responsible for their stakeholders’ well-being (Freeman, 1984). * To illustrate, when a manufacturing company produces indusitial waste and dumps it into a river, residents affected by this unethical practice will demand the proper disposal of chemicals as it affects their right to clean air and water. Employees of the company may alsa be exposed to the toxic chemicals in making the product and have the right to demand protective gear and processes that will not be harmful to them. These residents and employees do not have any financial or managerial participation except maybe buying the products or helping produce them, but their concerns should be heard and be a part of the company’s decisions. This is a moral claim exercised by a stakeholder, and forms part of a company’s desired ethical behavior. Strategic CSR "in the early years of CSR, programs were designed and developed with minimal stakeholder engagement. However, it has since becgme evident that creating shared value among a company’s stakeholders is critical and essential to the CSR agenda, and beneficial for program objectives, impact, market value, and bottom line. Dialogue, feedback, transparent reporting, collaborative partnerships, for example, are powerful tools to build trust and strong relationships among the stakeholders. This drives CSR into the company’s DNA, and ensures the corporate values remain embedded with a company’s culture.” _ Nena Wuthzich Executive Director ‘LBC Foundation Inc. ' ‘GHAFTER? | STRATEGIC MANAGEMENT OF STAKEHOLDER RELATIONSHIY 15CSR initiative, ny’s objectives, embeds and align: Strategic CSR starts within an organization when as part of the company’s overall strategy. This simply means that a comp strategies, and core values take inio consideration the impact ils operations have on the stakeholders, Encircled below are the core ot critical parts ofa strategic COR framework: Similar to the process of strategic planning, an effective CSR strategy would entail performing the following steps: 1. Identify the goals/ objectives of the company. - Scan the environment by looking at the internal and external situations by which the company operates. The internal assessment looks at the vision, mission, resources, strengths, and weaknesses of the’ company en i external assessment looks at the needs of the stakeholders, cat ietiiia given opportunities and threats that are in line with corporate ity id objectives. Step 2 provides a foundation and aids in developing ai siciogl CSR program. Formulate a CSR strategy that is aligned with corporate operations. The compariy must identify how they will approach their CSR initiatives (corporate donation, work with foundations, or intermediaries) and programs (single, 2 16 | GOOD GOVERNANCE AND SOCIAL RESPONSIBILITYfocused, or multi-program activities), and understand the needs of your target beneficiaries. Implement the CSR program with consistency, meaning, programs are aligned with the company’s goals /objectives. Cohesiveness of the entire process is an important element of strategic CSR. This would come to fruition when CSR is embedded in its operations. o Evaluate the program if it has achieved its desired objectives and outcomes. Should there be gaps and inconsistencies in the plan and execution of the Programs, remedial efforts, or ways to improve, these initiatives should be undertaken, Success Indicators For CSR to be strategic, companies must manage stakeholder relationships effectively, for social responsibility is primarily about stakeholders’ well-being. Alignment of CSR with Business Strategy In the beginning, some companies may engage CSR on a superficial level, meaning, such activities are of a marginal or secondary position and are not part of their core business strategy. Companies may be needlessly spending on CSR programs but with little impact on stakeholders. Therefore, as discussed in the strategic CSR section above, it is vital that focusing on particular objectives in consonance with corporate strategy will yield the best results: a growing and profitable business and satisfied stakeholders (McEthaney, 2009; Hildebrand, Sen, & Bhattacharya, 2011). Leadership “Passion: Most importantly - follow the lead of “Management's Heart.” Authenticity is key. When you see that Management's heart is the one leading, and when you keep the community's best interest upfront - everything becomes natural, cohesive, and authentic, It becomes a value-added experience, not just for the beneficiaries, but also for your own employees.” Mr. Chito Bauzon AVP - CSR Marketing SM Cares (SM Supermalls) ‘As discussed in the pievious chapter, a champion is necessary for CSR to thrive in organizations. Leadership has always been a comerstone of effective organizations. Numerous studies have supported the role of leadership in organizational outcomes, including CSR. YiRu and Chun-Ju (2014) supported that leaders can increase employee CHAPTER? | STRATEGIC MANAGEMENT OF STAKEHOLDER RELATIONSHIP 17is communicated to the company, involvement through leader performance and how CSR will be coming s ” s sually Support from top management is also a critical area since resources US ly from the board or executive management's approval. Employee Engagement One of the ways on how CSR can be strengthened is through employee volunteerism, Companies pave the way for employees to engage in the programs voluntarily, and some companies even give incentives to employees who participate in these activities. Acompany’s CSR activities positively influence employee atlitude and behavior at work (Chaudhary, 2017). Apart from feeling good about helping the community, employees involved in CSR develop better morale and feel proud of their workplace. Collaboration CSR is not and cannot be operated and implemented in a vacuum. It will take cooperation from various institutions to make it work effectively and efficiently. The role of government in CSR is to ensure that the very essence of corporations is to provide for the common good, which pertains to stakeholders. Civil society's CSR role is to ensure that they, as stakeholders too, serve as watchdogs in the monitoring and implementation of CSR, Businesses or corporations must be consciously aware of the impact of their activities on the public, including all primary and secondary stakeholders (Hudtohan, 2009). ‘As suggested by Friedman (1970), government alone cannot solve and provide the needs of its people and therefore needs partners in doing this. Synergy is needed to allow strategic CSR to come into efficient fruition. Alliances or partnerships with government, civil society, business, and all stakeholders are important sources of legitimacy. Trust is also essential. When organizations opt to work together, they build social capital as relationships develop over time. Social capital is an interconnected network of relationships in society that benefits everyone. Communication Success stories must be encouraged. Communication perfornis an important role in managing stakeholder relationships. By communicating the success of a company’s CSR initiatives, Estanislao (2017) stated that it would have an immediate effect on strengthening buy-in within the company and encourage participants to perform better. Furthermore, informing the various stakeholders on these success stories, no matter how small, will increase public trust and legitimacy. 18 | GOOD GOVERNANCE AND SOCIAL RESPONSIBILITYValue Creation The ultimate goal of business is to create sustainable value for its stakeholders. Companies, now more than ever, must be aware of how they operate in today’s volatile and uncertain environment and how. they eventually affect our daily lives. Chandler (2019) encourages companies to understand their roles in society and their responsibilities to society, The role of business in society is ever-changing because itis going beyond the creation of economic and financial wealth as itis rightfully shaping our values and, importantly guiding public policy (Zadek, 2017). Engaging in commerce and generating profits is not bad. It is good and needed for human progress and development. The basic problem is when individuals or companies are focused on profit maximization. From this, there are many other issues, such as extemnalization of operational costs, greed, and corruption among others. Companies that create value for stakeholders through sustainable use of natural resources, risk reduction, Teputation, trust, benevolence, transparency, collaboration, and many more value-added initiatives will have truly performed their roles as ethical and legitimate corporations in our society. | BITC irate) Mini Case Study “The Ideal Partner” ‘ Scentimental Inc. a Filipino SME owned by Mrs, Jin Balmadzes, has been in operations for over 20 years. She takes pride in supporting the local manufacturing industry with her design creativity. Given their success in the retail and wholesale of décor products with retail giants SM and All Home, as CEO, Mrs. Balmaires has. intermittently supported certain charities over the years. But she felt that the efforts of her company in this area were wanting. Moved by the much-needed relief for the residents affected by the Taal Volcano explosion in early 2020, she was advised by Ker management consultant to work with a foundation. She did some research on her own ori various potential partners. She found that she can either go ditectly to her desired beneficiaries, work with an established foundation, or through an intermediary. She decided to follow her consultant's advice and work with a foundation. She had her secretary set up an appointment with her chosen foundation the following week, ‘CHAPTER? | STRATEGIC MANAGEMENT OF STAKEHOLDERRELATIONSHIP 19Preteen) Questions for discussion: 1. What are some of the questions that the CEO needs to clarify with her chosen, partner in their initial meeting? /donation will be put to far 2. How can the CEO be assured that her contribution: foundation use? Clarify how she can demand accountability from the 3. Explain some ways on hony she can moniter and /or ensure the effectiveness of her CSR initiatives, 4. Should she require her employees to engage in the activities spearheaded by the foundation? Strategy on Doing Good You are inheriting your parent's business of a Level 2 private hospital in the province of Quezon. After’ years of working in a tertiary public hospital as one of its resident consultants, you are now faced with two aspects of hospital work when you officially take over your family business: providing public service as a hospital and ensuring sustainable revenues in the coming years. Create a strategic CSR with the following guidelines: 1. Review the vision/mission statement, Assess the dynamics of the industry (this includes the internal and external stakeholders of the business environment within which it is operating). 2. Formulate a CSR stratégy that aligns both business and social responsibilities by considering operational and CSR processes. 3. __ Implement these strategies by identifying specific initiatives and programs, and how these will be operationalized. Monitor and evaluate the implementation based on the identified objectives of the CSR initiatives and /or programs by providing metrics. Prepare a framework to help illustrate this plan of yours to your retiring parents. 20 | GOOD GOVERNANCE AND SOCIAL RESPONSIBILITY