Theory of Change

Theory of C-H-A-N-G-E-

What could a social responsibility enterprise do, to lead to the desired social impact.  Assumptions will be made about the various conditions that have to be met to successfully shift to a new ideology for a better, more responsible business world, complementing ambitions to fight social ills towards global well-being.

Specifically corporate, employee, and social development should be targeted, in accordance with McKinsey’s Global Survey Results from 2009, which found that those elements account for a total of 56% of the shareholder value CSR produces (see figure below).

Exhibit 2 – McKinsey Global Survey Results (2009)

Corporate development

Through CSR

Corporate Social Responsibility has become a tool that has gained political weight; moving from a voluntary initiative, with minimum governmental intervention, over regulations, scaling duties according to resources and capacities of a firm, towards the promotion of CSR as a strategic tool that is voluntary leveraged as long as it is strategically reasonable; i.e. provides business value.  Additionally, however, our conceptual understanding about the correlational impact of CSR on other, wider, development activities is very limited, making it difficult to measure and find metrics to come up with a positive business case.  Both developments, the increasingly strategic approach to CSR and need for performance indicators have created a whole new industry; one that on the one side consults companies to integrate their CSR efforts to add business value and on the other sides supports governments, advocacy groups, or other development agencies to tap the resources that are becoming available.

Exhibit 3 – Corporate development through CSR

Missing is oftentimes an understanding of the interdependence between society and company; both need each other to exist, the former to provide labour, capital and establish the needs the letter ought to match.  The result of this misconception is that CSR has largely become interchangeable with philanthropic work, sponsoring various activities, barely related to a company’s strategy and oftentimes providing meaningless or ambiguous societal results.  The raising tendency to outsource CSR into foundations, may have helped to better meet the needs for environmental or social development, yet are those units seldom connected to a company’s core business units.  This proposals wants to advance CSR, to promote an understanding of the interrelationship between a corporation and society while at the same time anchoring it in the strategies and activities of our clients.

By bringing Values into Action

The idea is to use the CSR movement to become acquainted with corporations, to become an insider, while offering an even-event-centered approach to CSR that is unique and allows connecting both sides of this new paradigm to find ends that are beneficial for society at large.  Our clients need to be committed and open to accept an innovative approach that may challenge the ordinary.  Being as specific as possible while designing a CSR campaign that reaches beyond.  However, in order to do so, employees and their managers need to be willing to invest time and be engaged in the various activities that lead up to the event(s); they need to owe the dream that we all together can make a difference.  We are aware that initial ideas might change and that the final outcome may be a deviate of what we initially had planned.  Nonetheless, we want to address all concerns and consider any idea, though we expect in return a culture that is open to change, flexible, patient, but also persistent in achieving our common and overall objective.  The proposal seeks to be more than just another service provider, we want to become a firm’s exclusive partner, becoming part of a cultural movement, valuing change, challenging old paradigms, innovating the business world.

Exhibit 4 – Corporate development by bringing values into action

Employee development

Through CSR

Corporate Social Responsibility is a concern of everyone involved in or related to a company.  As much as it is an obligation for each individual to act morally just, so is it as well a company’s duty to create an environment in which such is possible.  Consequently, the proposal wants to help a firm to establish a culture, free of ambiguity of interest, allowing managers and employees the like to understand the value of CSR for themselves, but also in regards to its contribution to a company’s strategic agenda.  Employees should develop a passion to solve issues of global concern, while utilizing a company’s resources and simultaneously fulfilling their job duties.  Naturally, the specific position will define the capability an employee might have, given scope and scale of his responsibilities.  However, each individual can contribute in regards to one’s capacity.

Exhibit 5 – Employee development through CSR

Together with the client the proposal wants to be devoted to find ways to convey that everyone plays part in doing both, supporting business objectives and contributing to social, environmental, and sustainability efforts.  A company’s tools, such as training and development, employee benefits, and recruitment tactics, facilitate the former part of the equation; the other is directly experiencing what CSR means, how it is played, and how one can contribute.  Experiencing a company’s ‘values in actions’ requires a communications campaign that market social responsible behavior, though more importantly allows to become directly involved in living and experiencing CSR.  Both need to be connected to general job responsibilities, incentive schemes and recruiting efforts.  The latter rests on the assumption that not only society and in particular customers are pressuring companies around the globe to comply with environmental and social standards, firms are also facing strong demands for CSR from their employees.

By bringing Values into Action

The suggested events find their foundation in the distinctive habitus of the multisport, multiday endurance competition called adventure race.  Adventure racing is no new sport; it can be traced back to its origins to the ‘Coast to Coast’ race in New Zealand in the 1980’s.  Competitors crossed the South Island of New Zealand, a distance of some 200 kilometers of extremely arduous terrain, by trail running, mountain biking, rock climbing, kayaking and other forms of non-motorized transport.  After the initial success of the race several others developed, but the turning point for this new genre of sport came in 1995 with the establishment of the ECO-Challenge.

First staged in Utah, USA, for MTV it has subsequently been held in Canada, Argentina, Morocco, Australia, Malaysia, New Zealand and Fiji.  The ECO-Challenge became hugely successful and was the signature sporting event for the Discovery Channel, which was considered the world’s premier and benchmark adventure race.  Following on from the success of ECO Challenge, other similar events have developed such as France’s Raid Gauloises, New Zealand’s Southern Traverse, Mild Seven’s Outdoor Quest and ESPN’s X-Games which in turn have spawned a world-wide industry with dozens of other adventure races being held annually, ranging in duration from four hours to 10 days.  Adventure racing is now a worldwide phenomenon and reputedly the world’s fastest growing team sport.  Races are generally structured to suit the venue environment and can comprise a wide range of sports, hence the term multi-sport race in use by a number of organizers.

The concept of habitus from Pierre Bourdieu is a set of incorporated schemes of disposition, perceptions, and appreciation that orients our practice and gives meaning to them.  This paradigm can be used to understand how a specific group’s preference for a specific sport practice is linked to its relative position in society and to the particular benefits expected from practice it. It is predicted that there are parallels between conceptualizations, perceptions, and judgments of practices embedded in our events and a new corporate discourse that ought to develop.  We claim that the values into action challenges offer benefits of transferability of acquired personal development, knowledge, and skills.  The competition is meant to be a symbolic practice that has value in the construction of an individual’s identity and understanding of the difference one can make towards an ideology of morally just behavior.

Exhibit 6 – Employee development by bringing values into action

Events are designed to meet the expected benefits of participants.  Competitors usually compete in teams of two to four, often co-ed, although a range of categories exists, with team’s having to cross the finishing line together.  We define who those contestants are and which team setup is most valuable to allow cultural exchange and awareness to prosper.  Following such analysis the sport practice is created towards the specific objectives the CSR campaign ought to reach.  Our events are meant to excite, to challenge, but above all they shall add to, or build, the person’s identity.

Social Development

Through partnerships

Recent years have seen the emergence of a new type of partnerships: multi-national corporations (MNCs or just multinationals) began cooperating with non-governmental (NGO) or not-for-profit organizations (NPO), influencing business practices while adding issues of global concern, such as human rights, labour standards, poverty reduction, into the corporate mix.  While, at first glance, those developments appear to support the social responsibility agenda, do some argue that market entry barriers are becoming too high, to allow the so called ‘bottom of the pyramid’ (BOP) manufacturers and service providers to enter.  The issue, however, is a paradoxical one, as it one the one side can improve production and safety standards, while on the other side those very advancements exclude local producers, given a comparable lack of technology, limited access to labour market, education and training.

Partnerships between NGOs/NPOs and MNCs usually begin when the former pressures the latter in employing ethical business practices; for instance, adapting fair and equal labour practices in developing countries, where a manufacturer has production sites.  While initially to mitigate the risk of public outcries, does a company’s cooperation with a local NGO bring legitimacy to their business practices, being perceived as acting socially responsible.  Nonetheless, no matter if those initiatives are solely externally motivated or based on true moral grounds, it could be argued that companies should further and actively engage in supporting BPO producers.

We want to argue that MNCs can add further value to overall society in four areas: first, microcredits could be given out to smaller businesses in disadvantaged areas, to allow technological upgrades; second, companies’ could share their advanced knowledge about production to improve quality, efficiency, and safety standards; third, most BOP producers are geographically isolated, investing in a community’s infrastructure can be a sustainable investment in the future; finally, most emerging and developing areas lack access to market information, such as reliable market prices or data for cost comparison, making this information available is a vital element to make break-even analyses and strategic sourcing as well as pricing decisions.

The main challenge in establishing a partnership between an NGO and a profit business entity is to find the right balance between resources devoted to the NGOs mission and resources from the profit side that are needed to support that mission (e.g., skills like marketing, communication, and finance, funding capacities, profit generation abilities, governmental connections).  Both parties need to be aware that real social change requires investment, but to remain mindful of how the public will react to corporate sponsorship (e.g., negative connotations towards philanthropy).

The suggested social enterprise can be understood as external entity bridging sometimes innumerable gaps between a for-profit and a non-for-profit entity, as depicted in the figure below.  Mediation between those two parties will require a deep understanding of each ones’ capacities, but as well limitations, challenges, and benefits of sharing resources.  Such a comprehension allows mitigating misunderstanding and conflict, while creating a strong force to generate social change.  External facilitation enhances legitimization of a profit for non-profit model that might be perceived negatively in the public eye, as a third party is free of biases, absent conflicting demands of various stakeholder; hence, providing room for autonomous decision making, without ambiguity and in the best interest for overall society.

Exhibit 7 – Social development through partnerships

In conclusion, the growing interdependency in our global landscape needs further considerations; to find the right path we are walking on, as an evolutionary process, rather than discussing short-term outcomes that are too limited in scope, too culturally biased, and may rather intensify than mitigate issues of global concern.  Companies, governments, developmental agencies, and the public need to work hand in hand, establishing a business case that goes beyond profit maximization, giving managers the freedom to do what is right and offer solution that are needed, not externally inflicted.  A third party acting as an external facilitator can bring about such change; constituting the most important and primary benefit this sponsorship proposal offers.

Through high-impact philanthropy

Corporate philanthropy is probably the oldest, most commonly used element of the Corporate Social Responsibility mix.  It is considered one of the external initiatives companies may choose to contribute and improve the communities in which they operate.  Firms, however, usually lack depth in understanding social and communal needs, which may risk ; something the proposal assumes is largely related to a lack of experience and exposure.  Thus, our events, the activities leading up to them, and the partnerships that shall emerge with development agencies – governmental or NGOs – should allow a more effective allocation of funds to social causes that are legitimate.  The social enterprise wants to integrate multiple stakeholders so that they can see, experience, and together find solution to issues of global concern.

We ought to find solutions that are measurable, have a proven impact, and are cost-effective.  The social enterprise shall be committed to provide reasonable and feasible answers to social ills and development needs.  Responses need to be highly individualized and specific, yet need their impacts be sustainable, even beyond the corporate funding, and replicable.  The beneficiaries of the projects, we recommend for funding, need to continue to reap the benefits, which we believe we can accomplish while establishing a partnership mechanism between our corporate client and other entities invested in those areas.  We pledge to recommend funding opportunities of projects that allow one or more of the following:

  • Provision of goods or services to the local government to allow continuity of funding
  • Establishment of a for-profit-business model and supply chain to allow continuation of the provision of goods and services, because everyone in the system has incentives to make it work
  • Facilitation of a self-reliant community organization that continues to solve local problems with no need for external sources of funding, while all participants continue to benefit
  • Permanent eradication of the problem the project targets

Further, we believe in scale and that making a difference requires projects to be replicable.  Thus, we attempt to advice on sponsorship opportunities whose methodologies are adaptable and systematic.  Simplicity and flexibility of a project’s approach is a key component to quickly adapt to new settings and problems, which may emerge.  If success is too depend on specifics – such as a key figure, a unique market position, or build on vague assumptions – a project will miss the opportunity to be taken to scale and to make a lasting impact for the benefit of wider society.

Exhibit 8 – Social development through high-impact philanthropy