James Austin and Ezequiel Reficco
Harvard Business School, Working Paper No. 09-101
Transforming a profit-driven company into one that values social issues can be a challenging and disruptive process, but companies such as the Starbucks Corporation and Timberland Company have managed the transformation successfully. The authors of this paper looked at these companies for lessons on how firms can better create a culture of corporate social responsibility. The first step, they conclude, is for management to champion the value of social and environmental projects, and to make this approach part of the company’s core purpose. A second crucial step is to provide incentives and rewards for employees who generate social value. At Timberland, for example, employees can earn up to 40 hours of paid time off for volunteering in their communities. Collaborating with socially conscious organizations is also essential. Starbucks entered into a partnership with Conservation International, a nonprofit organization focused on protecting the earth’s biodiversity, to promote environmentally sustainable coffee production among Mexican farmers. Through this partnership, Starbucks was able to increase its capacity to work with small farmers. Companies that wish to promote social responsibility do not see social issues as separate from or secondary to the bottom line, according to the authors. Instead, they find innovative ways to create both societal and business value.
Many companies strive to be more socially responsible, but few have integrated a social agenda into their values, strategy, and processes. By looking at two companies that have successfully made the transition, this paper provides a primer on how to cultivate corporate social responsibility.