Designing and Implementing A CSR Strategy - Module 1

1
Implementation of Social Responsibility:

Improving the Quality of Life for Humanity
2014 BES Business Excellence Solutions, Ltd. 1
Gregory H. Watson
Management Seminar
China (Shanghai)
Pilot Free Trade Zone
24 July 2014
These lectures describe the socialization of quality and integration of social responsibility into an
organizational quality framework for a process of management which will implement plans to
create a more highly responsible organization.
Corporate Social Responsibility (CSR) has become increasingly important in the last two decades.
It applies to mechanisms in self-regulation of an organizations business model for the benefit of
society and includes active compliance with the letter and spirit of the law and their governing
regulations as well as the morals and ethics held by society in the natural communities where the
corporation operates.
This extends responsibility of a firm beyond financial achievements or the ability of a firm to
comply toward an active effort to achieve what is the good of society. Emphasis on the social
good means that a firm will deliver positive value to all stakeholders (beyond the financial
stockholders or owners, to include the broad public (e.g., clients, customers, constituents,
communities, employees and suppliers as well as the global natural environment and human race
as a integrated, systemic whole).
CSR emphasizes human dimensions in developing organizational performance which makes it
difficult to quantify its benefit (especially as compared to productivity and financial performance)
because there is no accepted indicator that applies for quantifying the benefits of a CSR strategy.
Additionally, CSR has different emphases in different cultures. In China, CSR focuses on safety
and product quality while in Germany it assures job security for workers while emphasizing
environment or moral issues in other nations.
An starting point to understand CSR is to conduct an inquiry into the subjective nature of the
cultural foundations of organizations to gain understanding of requirements to be developed to
achieve a global recognition for excellence in CSR. This is an imperative in building a global brand.
2
What do most organizations believe that CSR involves?
Related international standards and business guidelines:
ISO26000/SA8000 Social Accountability
ISO14000 Environmental Management
ISO45001/OHSAS18001 Occupational Safety and Health
United Nations Global Compact Moral Imperatives

However:
There is no global agreement on the specific content of CSR elements
Minimum international agreement CSR company makes safe, quality
products; while others add:
Positive contribution to social needs (e.g., health care and education)
Secure employment for employees
Corporate philanthropy and charitable projects
Fair trade and labor practices
Creating Shared Value (CSV) corporate success and social welfare will
operate in an interdependent manner (e.g., the triple bottom line of
profit, people and planet)
Module 1: Understanding how Corporate Social Responsibility
Relates to the Obligations of Organizations

Module 2: Implementing the Principles of Social Responsibility
Using the Methods of Quality Management

3
Organizations decide how to act collectively in society:
Premise: Mankind has trouble in making truly objective decisions and this
is especially true when it comes to value-based decisions! Therefore:

We need to reconsider our approach to making decisions.

We must reconsider how we prioritize our activities to achieve results.

We must determine how to focus on what is most important for us
to achieve for the sake of humanity in our global organizations.
Module 1: Understanding how Corporate Social Responsibility Relates to the
Obligations of Organizations
UNDERSTANDING HOW CORPORATE SOCIAL RESPONSIBILITY
RELATES TO THE OBLIGATIONS OF ORGANIZATIONS
Module 1:
IMPLEMENTATION OF SOCIAL RESPONSIBILITY:
IMPROVING THE QUALITY OF LIFE FOR HUMANITY
4
How does social responsibility apply to a global firm?
7 2014 BES Business Excellence Solutions, Ltd.
Laozi or Lao Tzu []
Zhou Dynasty [6
th
Century BCE)
Disaster is that on which good fortune depends.
Good fortune is that in which disasters concealed.
Who knows where it will end?
For there is no fixed correct.
The correct turns into the deviant;
And good turns into evil.
Peoples state of confusion
Has certainly existed for a long time!

Lao-Tzu
Te-Tao Ching, Chapter 58
UNDERSTANDING THE BAYESIAN MOMENT OF DECISION
Part 1:
5
Knowledge-based issues in rational decision making:
What can we discover in a scientific inquiry into a disruptive event or
situation in an organization?
We need to learn about the sources of variation; relationships to the
physical world; relationships to cultural components; interactions of
the various physical components; sequencing, duration, and coupling
of flows among the activities; and the degree of clarity and integrity
that the information available is able to provide.
It is also important to determine if the problem relates to the lack of
accuracy in our knowledge (which makes it appropriate for a DMAIC-
type of inquiry) or if the situation is related to inherent ambiguity (in
which case a more innovative approach is needed such as DMADV).
Essential to the approach also is the understanding of the dynamics
of the activity and ability to make strategic sense out of the current
state in order to develop a clear understanding of the management
decisions necessary to create a more positive future state.
Foresight
Realm
of
Science
Hindsight
Realm
of
History
Insight
Realm of
Psychology
The process flow of scientific inquiry:
DEFINITIONS
Hindsight: how we use historical
data to discover causal systems
from past experience.
Foresight: how we project what
future potential is possible as a
function of past experience and
knowledge.
Insight: how we perceive data of
past experience and interpret its
meaning in decision-making as
an individual decision-maker.
Bayesian Moment
Bayesian Moment: a point
in existential time when an
observation is made of the
phenomena, perceived and
interpreted as an individual
and represented through a
mental model as an actual
entity and decisions drawn
based using a constrained
level of knowledge, time or
consciousness (as bounded
reality).
6
What happens in the Bayesian Moment of deciding?
The Bayesian moment represents a brief instance in time when an
executive decision must be made and implemented operationally
based on the facts that are available.

The implications of this decision will carry an organization toward
its forward-seeking strategy in pursuit of future success.

However, poor decisions in this moment can restrain opportunities
for success in the future.

Management judgment must be based upon the available data that
supports the decision and is subject to a several decision conditions
which may be examined to determine the quality of the decision
that is made in terms of its potential future impact.

Question to consider: What drives the quality of these decisions?
How much is available to know about a subject?
Chester I. Barnard (1886-1961)
President, New Jersey Bell Telephone (1927-1949)
Functions of the Executive (1938)
Mind in Everyday Affairs (1938)
There are distinct categories of facts that bias proposed problem solutions. We can observe
facts using one perspective (e.g., physical), but interpret from another perspective (e.g.,
political). Thus, managing by facts may become distorted due to subjective manipulation
by those who lack perspective. The level of confidence with which we may draw conclusions
from data is limited by the characteristics inherent to the data itself. Our ability to explain
phenomena of actual entities is a function of the type of data contained in our observations.
Degree of knowledge
that is available from
the different types of
data:
7
How much control may we exercise over any subject?
To indicate the relationship which the theory of control bears to exact
science, it is interesting to consider six stages in the development of
better ways and means of making use of past experience. They are:
1. Belief that the future cannot be predicted in terms of the past.
2. Belief that the future is pre-ordained.
3. Inefficient use of past experience in the sense that experiences
are not systematized into laws.
4. Control within limits.
5. Maximum control.
6. Knowledge of all laws of nature exact science.
Statistical Process Control
Walter A. Shewhart (1891-1967)
The Economic Control of Quality of Manufactured Product
(1931)
Statistical Method from the Viewpoint of Quality Control
(1939)
Shewhart is called the father of statistical quality control
who developed a Theory of Control and the statistical
process control chart.
There are three choices we make in judging:
A gestalt is our personal world view the set of beliefs and
experiences that formulates a personal moral code of the way
we interpret our experiences in life. *
William K. Clifford: It is wrong always, everywhere, and for
anyone, to believe anything upon insufficient evidence.
William James: If we choose to think something we exercise
our will to believe or an acceptance of interpretations about
ideas or facts based on personal choice, with or without any
specific evidence of the truth of such facts or ideas. There are
three levels at which we actually have beliefs:
1. Belief: so-called blind faith or belief without justification
2. Justified Belief: belief based on rationally-defined premises
3. Justified True Belief: belief based on validated premises

Essays by William K. Clifford (1877) The Ethics of Belief and William James (1896) Will to Believe.
8
Personal probability defines our preference: Theory O!
Developed the idea of personal and subjective probability
in inferential statistics as compared to frequency theories
based on mathematics and logical analysis applicable to
just objective and repetitive events.
Proposed (in collaboration with Nobel Laureate economist
Milton Friedman) a subjective utility theory for rational
decision-making and choice under conditions of
uncertainty.

Statistics is the art of dealing with the vagueness and
interpersonal differences in decision situations.

Experiments, as opposed to observations, are characterized
by reproducibility and repeatability.
Leonard J. Savage (1917-1971)

Foundations of Statistics (1954)
We use three probability levels in making judgments:
Truth is only absolute when we can establish a scientific law,
and even then it is subject to confirmation. Thus, perception
in judgment, is a matter of degree of probability alignment in
meeting our personal criteria for goodness and here there
are three levels that we can observe:*

1. Personal Probability subjective estimate that is based on
the feelings of the believer 100% would be blind faith.
2. Objective Probability objective based on calculations by
use of frequency distributions from observed events. Truth
is only as valid as the ability to observe and measure.
3. Scientific Probability deterministic analyses that use the
principles of scientific experiments to establish causality.
Leonard J. Savage (1954), Foundations of Statistics (New York: John Wiley & Sons).
9
Where does the data come from?
Initial data is almost always murky, fuzzy, or just plain wrong.
People tend to report benchmarks based on their personal
opinion regarding work performance. Over-reliance on personal
observation and subjective sources of probability estimates is
called Theory O Theory Opinion.
People tend to mix into their so-called objective reports the
combination of judgments, inferences and reports each with a
differing degree of objective validity. Sometimes the outcome
is not only statistically invalid, it may also be greatly wrong!
True benchmarks are scientifically rigorous and the terms have
been operationally defined to assure clarity (lack of ambiguity)
and these measures are evaluated for their integrity ability to
describe accurately what they are supposed to report. There is
no gaming possible with a good benchmark measure.
Finally, a good measure will be openly reported and accepted
within the industry that is being studied.
Theory O drives many management decisions:
18
We build our knowledge as individuals; one experience at a time.
Education serves to accelerate our experience and expose us to a
broader base of situations.
However, each experience represents only one potential way of
working out a problem and results in either success or failure, so
there are many lessons that go unlearned because they have not
been experienced.
Conclusions drawn based upon personal experience are a limited,
not comprehensive, approach to decision-making.
Experience-based decision-making degenerates into a subjective
approach if it is not supported by facts or a sound approach to
data analysis.
Theory Opinion: An opinion based on knowledge gained from previous
experience, usually unsupported by data but expressed as a statement
of fact.
Designing processes based on Theory O often creates process mess!
2014 BES Business Excellence Solutions, Ltd.
10
Seeking profound knowledge in the Bayesian Moment:
W. Edwards Deming (1900-1993)
Out of the Crisis (1986)
The New Economics (1992, 1994)
Deming proposed a System of Profound Knowledge but he
only outlined its structure without a theoretical justification for
his belief regarding its basis. So what is profound knowledge?
PROFOUND KNOWELDGE = Statistical knowledge about process performance
There are identified four dimensions to profound knowledge:
Structure of Systems: understanding the system in which work is being done
and decisions are being made (process management).
Statistical Thinking about Process Variation: knowledge of system operation
comes from a study of performance variation, improvement requires the
control of the sources of variation (statistical thinking).
Development of Knowledge: knowledge comes by observing work, defining a
theory, testing and confirming it (measurement system).
Psychological Impact: human behavior must be understood, motivated and
coordinated to achieve results (collaborative culture).
The statistical component in improvement:
Special cause variation is any deviation from standard process performance
that can be assigned an identifiable cause. Common cause variation is the
natural level of variation that exists in a process it has no specifically
identifiable cause but represents variation that is inherent in the system
design and it is not possible to improve this variation by making changes in
a work process.

When common cause variation is too great to obtain performance results
expected of the process, then a transformation or redesign of the process
is required. This is the job of management and it will typically require a
reallocation of organizational resources.
Statistical Thinking:
A process of learning and then taking action based on three following principles:
1. All work occurs in a system of interconnected processes.
2. Variation exists in all processes use data to learn about processes.
3. Understanding and reducing variation are the keys to performance
management and business improvement.
11
How does using averages distort process knowledge?
Measuring and reporting performance using averages
Performance Indicator:
Daily averages of call answering time:
In average the call center answered phone calls
between 3-9 minutes during this week!
Lets use a very
simple example
to illustrate a key
point on using
statistics!
Here is call center
data from a
company which was
reported to its
management.

What can they do
with this data?
Does this information help managers know WHAT to improve?
Using statistical process analysis we see the long tail:
22
B 5 seconds A Average: 4 minutes
1 hour 10 minutes C
Systemic Result
Performance that
fits the natural
process variation
and may be
improved using
data analysis
Long Tails
Performance
results that are
well out of the
ordinary.
Measuring and reporting these facts observing full process statistics:

Using averages
alone creates
optimism and
distorts quality in
our business
decisions!
12
Solving problems using statistical analysis:
The average outcome (mean, median, or mode) of a factor is
a necessary condition to describe performance of a process,
but it is not sufficient to fully characterize its performance
without a related measure of process variation or degree of
consistency (e.g., variance, standard deviation, or range, etc.).

When both measures are used to characterize the set of data,
then process improvement is possible by following a simple
statistical objective to improve the process performance: any
work process may be improved by either shifting its mean,
reducing its variation, or doing both at the same time.

The easiest way to improve a process is to discover the factors
that reduce a long tail in an outcome metric and eliminate
those factors that are identifiable causes of process variation.
Developing a scientific approach to process analysis:
Historical data must be collected in a way that preserves its meaningfulness.
The data must be grouped using various rational sub-groups that will display
relationships in the overall performance to variance in the sub-group actions
which may be further analyzed.
Pattern analysis using graphical representations and underlying probability
for pattern occurrence isolate variables for more detailed statistical analysis.
Confirmatory analysis through hypothesis testing demonstrates that there is
a statistical basis for interrelationships among process factors.
Experimentation demonstrates that the relationships are or are not causal.
Historical

Process Data
Rational
Sub-group

Decision
Filters
Confirmatory

Analysis
Pattern

Analysis
Representation of a problem occurs by decomposition:
13
Defining the task and responsibility of management:
Management must produce economic results.
Management is concerned with decisions for actions.
Productivity [results] means that balance occurs between all factors of
production that will give the greatest output for the smallest effort.
The guiding principle of business economics is not the maximization of
profits; it is the avoidance of losses.
The more a management creates economic conditions or changes them
rather than passively adapts to them, the more it manages the business.
Management must reflect: what will our business be? and what should
our business be?
25
Peter F. Drucker (1909-2005)

The Concept of the Corporation (1946)
The Practice of Management (1954)
Managing for Results (1964)
The Effective Executive (1967)
Management, Tasks, Responsibilities (1973)
Innovation and Entrepreneurship (1987)
Decisions are constrained by bounded rationality:
26
Herbert A. Simon (1916-2001), Nobel Laureate

Administrative Behavior (1947)
Organizations (with James G. March, 1958)
Models of Bounded Rationality (1982, 1997)
Reason in Human Affairs (1983)
The Sciences of the Artificial (1996)
An Empirically-based Microeconomics (1997)
Boundedly rational agents experience limits in formulating and solving complex
problems and in processing (receiving, storing, retrieving, transmitting)
information.
The human being striving for rationality and restricted within the limits of his
knowledge has developed some working procedures that partially overcome
these difficulties. These procedures consist in assuming that he can isolate from
the rest of the world a closed system containing a limited number of variables
and a limited range of consequences.
Complete truth is not possible, but decisions must be made under constraints of
(1) quality of available information; (2) competence of decision-makers; and (3)
urgency of timeframe for decision-making.
14
Sensemaking is different from problem solving:
Karl E. Weick (1936 )
Rensis Likert Distinguished Professor of Psychology
University of Michigan

The Social Psychology of Organizing (1969)
Sense Making in Organizations (1995)

Introduced the concepts of Loose and tight coupling,
mindfulness and sense making as elements of rational
decision making.

Not every type of concern or undesirable situation is a problem that
needs to be fixed. Some divergent conditions are issues that must be
managed; others are dilemmas that need to be resolved; paradoxes that
need to be challenged; conflicts that need to be settled; constraints that
need to be removed; or opportunities that need to be taken.
Sensemaking requires the perceiving, interpreting, and understanding
of observations within a given cultural setting and it is imperative that
all these dimensions are understood during any comprehensive inquiry.
Developing innovative, dynamic capability of the firm:
David J. Teece (1948 )
Professor of Business, Haas School of Business, UC Berkeley

Economic Performance and the Theory of the Firm (1992)
Technology, Organizational Capability and Strategy (2008)
Strategy, Innovation and Theory of the Firm (2011)

Developed the concept of dynamic capability as a way to
describe the relationship of innovation and competition to
new product development for advancing technology.
Dynamic capabilities are threefold: (1) the capacity to sense and shape
the opportunities and threats that face an organization; (2) the ability to
seize opportunities and make decisions that will implement the needed
change for the organization to remain competitive; and (3) the stamina to
maintain competitiveness through the continual enhancing, combining,
protecting, and when necessary, reconfiguring the business enterprises
tangible and intangible assets.
The development and exercise of internal dynamic capabilities is at the
core of sustainable success for an enterprise.
15
Application: organizational executive decision making
How do these seemingly diverse ideas relate to each other? They are
all integral components of the strategy management process and are
critical aspects of the decision-making activities that shape choices
made about organizational futures in a Bayesian Moment.

Key questions need to be address with respect to the combining or
executing of these ideas: what decisions need to be made at what
point of the organization? Who needs what degree of authority to
make choices and have they been developed with the right degree of
competence to make truly informed decisions? Do these people have
the requisite resources to support their decision (both tangible and
intangible)?

Responsible manager avoid creating organizational loss waste! It is
important to make decisions that avoid loss in both the short and long
term decision horizons and to assure that the processes have a
dynamic capability to perform and also make sense across a variety of
foreseeable future business case scenarios.
Differing cultures may require unique process designs:
Joseph M. Juran (1904-2008)
American Quality Consultant
Quality Handbook (1951, 1962, 1974, 1988, 1999)
Managerial Breakthrough (1964)
Management of Quality Control (1967)
Quality Planning and Analysis (1970)
Upper Management and Quality (1980)
Often there is a single variable that will dominate in its contribution to the
performance of an overall process. In a physical process the usual forms
of dominance are elements such as: setup-dominance, time-dominance,
component-dominance, worker-dominance, and information-dominance.
Processes will vary in terms of the appropriate performance measures as
well as the degree of ability to self-regulate or control quality in their
results.
Patterns of activities that dominate a process will also provide the key for
their effective control and each dominance pattern will employ different
types of control mechanisms to produce effectively stable results.
16
Information is the answer to a question:
If only I had the right question if only I had the right question the
formulation of a problem is often more important than its solution.
The raising of new questions requires creative imagination
imagination is more important than knowledge.
~ Albert Einstein
What are the right questions? There are two ways to improve:
(1) Eliminate waste, or
(2) Improve efficiency
Questions to ask about waste include:
Where is there waste in our process?
What are we doing inefficiently or ineffectively?
Where have we invested too much in assets? Can we make them
more efficient?
Do managers contribute through wasteful decisions?
How can we improve the way that we do our routine work?
We learn about waste by internal assessment; we innovate in efficiency when
we learn the practices or processes of excellently performing organizations.
But, experience varies in interpretation by culture!
There is no question of theory versus practice but rather of intelligent
practice versus uninformed practice.
Every great advance in science issues from audacity of imagination.
Failure is instructive. The person who really thinks learns quite as
much from his failures as from his successes.
Experience is the ultimate test of truth and by explaining connections
and gaining meaning that we develop an understanding of the reality
that we observe, so experiential verification is the criteria that is both
necessary and sufficient for validating theory.

John Dewey (1859-1952)
Professor, Columbia University
American Educator, Philosopher, and Psychologist

How We Think (1910)
The Quest for Certainty (1929)
Logic: The Theory of Inquiry (1938)
Knowing and the Known (1949)
17
Reflective Introspection about our Pursuit of Quality:
Have we become so focused on learning more and more
about less and less that we have missed the big picture?
Have we forgotten the holistic aspects of the human in our
thinking and concentration on problems?

Have we become too focused on addressing problems and
forgotten how to deal with other issues? How do we deal
with non-problems like ambiguity?

Have we become so focused on implementing tools and
methods that we have forgotten how the whole system of
work must work together? How can we integrate the
philosophy and methods of quality into a coherent
management system that satisfies the need for continual
improvement and is globally viable?
REVISITING THE MEANING OF THE PARETO EFFECT
Part 2:
18
How do we establish our priorities for improvement?
Often we prioritize our work based on the Pareto Principle: it says
that 80% of the success events in a process are caused or
contributed by just 20% of the individuals involved (a standard 80-
20 Pareto rule for distribution of result and participants).
But this implies that the categories of success and individuals are
drawn from the same population and that these success events are
independent of each other. The vital portion of the contributors to
success however sometimes changes from the 20% that is
identified by this base rule.
However, we see in some start-up organizations that almost
everything depends only one or two organizational members (this
would be a 95-5 rule instead of an 80-20 rule).
Also in some highly integrated team activities the case may be that
80% of the success depends upon 90% of the people (or an 80-90
rule).
Crowd-sourcing also indicates that there is power in the mass or the
miscellaneous category this is called the restaurant bill effect.
What is the logic behind the Pareto Effect?
Pareto charts display frequency of occurrence information about attribute
data (e.g., the most frequently occurring type of quality defect or relative
magnitude of different types of product orders received by a sales group).
The Pareto principle assumes that there is independence among the data
observations (e.g., all types of failure are equally likely to occur) and when
this is true, then the 80-20 rule holds: 80% of the problems come from
20% of the events (the vital proportion of events).
However, if the data is not independent, then the 80-20 rule (or Pareto
effect) is not valid as one particular type of failure may cause all observed
defects (e.g., bearing failure in a motor causes multiple failures; however,
the resultant failures are conditional upon the prior failure of the bearing).
The 80-20 rule is used to distinguish the vital few events that create
the majority of the problems from the trivial many events that possess
only a minor influence on the total result.
36
Pareto Chart
Named for Vilfredo Pareto (18481923), an Italian
industrialist, sociologist, and economist who first
observed this effect in economic income data.
19
Interpreting a Pareto chart to see relative frequency:
37
Count 7 7 7 6 5 5 5 5 5 5 17 4 4 4 3 3 2 2 2 2 2 13 2 2 1 1 9 12 10 8 8 8 8
Percent 4 4 4 3 3 3 3 3 3 3 9 2 2 2 2 2 1 1 1 1 1 7 1 1 1 1 5 7 5 4 4 4 4
Cum % 49 53 57 60 63 66 68 71 74 77 9 79 81 83 85 86 88 89 90 91 92 16 93 94 95 95100 23 28 33 37 41 46
C
o
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n
t
Lead Time
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t
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e
r
2
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9
1
8
9
7
0
6
0
5
3
4
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2
8
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4
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7
2
4
6
6
5
5
5
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3
9
3
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7075HE200
7075HE200 8553HE200
7286HE200 7592HE200 7411HE201 7411HE201 7506HE200 7434HE200 7434HE200
7434HE200 7434HE200
7423HE200 7411HE200 7411HE200
7160HE200 7720HE200 7720HE200 4858HE208 4858HE208 7467HE202
7467HE200
6983HE200 7063HE200 7063HE200
7063HE200 7063HE200 7063HE200 7936HE220
7936HE220
7936HE210
7805HE202
7936HE200
Pareto Chart of Lead Time
The Vital Few
Performance
Contributors
The Trivial Many
Process
Performance
Contributors
Last 5% is
grouped
together.
Priority for corrective action?
The Pareto Chart identifies the mode within a statistical distribution!
Pareto Principle (80-20 Rule): Approximately
80% of the effects observed in performance
are generated by about 20% of the causes.
Demings description of organizational responsibility:
According to Dr W. Edwards Deming, approximately 15% of all
work-related defects made by operators are the responsibility of
the operator (where these defects arise from a single population
of failure possibilities).

This observation raises some pertinent questions:
Who is responsible for the other 85% of these problems?

Then, under what conditions should workers be held accountable
and responsible individually for the quality of his or her work?

How does this discussion correspond to the two types of process
variation that occur: special cause and common cause variation?

This observation about organizational responsibility for problems
follows the Pareto Principle!
20
Restaurant Bill Syndrome *
The restaurant bill syndrome describes what happens when a wide
variety of small extras are added to the base price of a meal the cost
impact of these extras will often far outweigh the base price (this is drive by
selection of the appetizer, drinks and desert portions of the bill!).

In this case the total of all the miscellaneous items generates a cumulative
effect that far exceeds their individual contribution. Here these items have
been added one-at-a-time, each item consists of a single low cost decision;
however, the net result of all these low-cost decisions is a substantial
increase to the total cost of the bill.

This increase in risk is a similar effect to the risk increase to a person who is
tortured using the death-by-1,000-cuts method!
We must remain alert to the incremental increase in effect that
may occur through the multitude of small decisions that are made
during the design and execution of our work processes.
* Credit for developing the restaurant bill syndrome belongs to Zigmund Bluvband (2014).
How does this apply to implementing CSR?
In business often the financial impact of the trivial many will
become the most significant contributor to overall cost.
Many of the CSR decisions that an organization makes are not
made at the executive level but are made at the level of their
implementation. This means that these decisions and the risks
form their implementation are largely invisible to management
at the highest level of the organization (e.g., decisions may be
embedded in supplier sourcing decisions by purchasing agents,
benefit designs by human resource managers, or in technology
selection or design by R&D engineers).
The trivial many become ignored through application of the
Deming Logic or Pareto Principle to decision-making.
However, it is at the point of process detail where important
CSR issues are decided which have an overall implication on
the outcome of the organizations total social responsibility.
21
UNDERSTANDING SOCIAL CHOICE IN SETTING CSR STRATEGY
Part 3:
The nature of global organizations and their cultures:
Global organizations have a special challenge how to define their
ways of working so that they are aligned with the diversity among
the national cultures and moral value systems of their subsidiaries?
Achieving sensitivity to diverse issues of informal cultures within an
organization is not a clearly defined process and requires that each
organization develop a sensitive awareness to the subtleties of their
constituent sub-cultures.
In fact, some of the belief systems of organizational sub-systems
may operate in conflict with each other and generate systematic
interaction effects that confound progress across the organization.
Identifying cross-cultural conflicts and appropriately dealing with
them requires cultural awareness and astute sensitivity to all of the
challenges that are inherent within the organization.
The approach to develop a robust social system within a global
organization is to maintain a core identity (corporate culture) that is
relatively rigid and remain flexible in permitting development of the
local sub-cultures that are aligned with local implementation issues.

22
Distinctions between BIG Q and little q quality:
Big Q Strategic Quality Little Q Operational Quality
Culture (Company)
Vision, Mission and Values
Policy and Philosophy
Competition (Business Learning)
Innovation
Leverage
Benchmarking
Change (Renewal)
Strategic
Operational
Cascade (Alignment)
Improvement Projects
Objectives and Targets
Measures
Communication (Awareness)
Message
Media
Competence (People)
Individual and team development
Training/development program
Capability (Process)
Daily process management
Data bases and analytic software
Compliance (Product)
Quality management system
Performance agreements
Certification (Standardization)
System certifications/standards
Functional certifications/standards
Industry certifications/standards
Conformity (Learning)
Business and operational reviews
Correction (Repair & Improvement)
Corrective / Preventive Actions
Business Excellence Operations Excellence
Insight: Quality is both content as well as process
Thus quality must be defined comprehensively and interactively:

Content the output that is produced by an organization (its
products and/or services).

Process the means by which these deliverables are designed,
developed, produced and delivered.

Content and process are not separable they interact and one
depends implicitly upon the other for its context and meaning.
Quality is inclusive (it applies complementary logic of both/and not
an exclusive approach using divisive logic of either/or).
Quality is holistic and not separable into components as any sort of
blemish on ones quality reputation destroys the foundation.
23
Implementing CSR: Effect and engagement of culture
The recommended approach for development of a global CSR
system is to develop global processes but to populate them
with performance details that are aligned to national or local
cultures.

Creating such an approach can be accomplished through the
creative application of quality philosophies, principals, and
methods this will be the topic of our second CSR lecture.
Thank you! Any questions?

Designing and Implementing A CSR Strategy - Module 1

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