Hello, my name is Sally Randles, and I'd like to welcome you to the lecture of Session 3 of the MOOC on Managing Responsibly. And I am a senior research fellow at the Manchester Institute of Innovation Research here at the University of Manchester. But I have to say I'll soon be moving to new role at Manchester Metropolitan University, just next door, as the new professor of sustainability and innovation. And I will be drawing on this lecture into that session and into that new role. And therefore, I will be drawing on a lot of research that we've done with our PhD students here at the University of Manchester. And I welcome any of you, if you're interested, to get in touch if you're interested in any of the programs that we do either at the University of Manchester, at the Institute of Innovation Research, or alternatively, at Manchester Metropolitan University. So I'd like you to look at this lecture, which is slightly different to the other aspects of this session. But look at it integral with the location video that we've put on this session, and the assignment, and the practitioner interviews that we've done. I'd like you to go between all of these different resources in order to get a better understanding of the session. And that will build up to the assignment that we'd like you to do for this session. So as you can see, this is Session 3, and we're interested in the three levels of individual competencies, organization and business models, and the system level at the top. And we saw on the location video how the history of Manchester has informed this session of the MOOC. And basically, the point I was trying to make there is that social, technological, and economic change evolves. And that responsibility and the role of businesses in those responsibilities also change as the external environment changes. But at the same time, businesses and other organizations actually frame and change that adaptive response themselves. So as they adapt to those changing environments, they actually construct solutions, but also further harms. We might say businesses have a role in contributing to pollution or to climate change, and human activity we know is involved in climate change. And therefore, as solutions appear in response to those problems, those societal problems, they might be worker rights or regulation of labor, or they might be the production of medicines to deal with new diseases, and that's how these responsibilities do change and evolve over time. But the other reason why we chose Manchester specifically for our introductory location video is to make the point that responsibility is very place and time context-specific. So we've told a little bit of the story of Manchester to show how very particular developments, the university, and new technologies such as synthetic biology that are going on here around us may or may not be the same type of context that you're facing in your particular part of the world. So it's very important that you might consider, through the networks that we are hoping you will develop with your peers on the LinkedIn network that we've established for you, how your own context is similar or is different to those of other people on the MOOC. And that's why we've created that network of peers for you to connect with, engage with, and therefore widen your own horizons and reflect upon how your experiences differ from others. So we're going to be talking about practice and practitioners, and managing responsibility is a very practical topic. But in a sense, I want to widen that out to the bigger question of what is the role of business in society? That in fact, as we'll see, is a question that's been asked for many decades, if not centuries. And I want to look at historical evolution of the debate of the role of business in society. But I want to move that question on to what does it mean for collectives in society to manage responsibly? That means involving businesses, governments, NGOs, civil society, social movements, social innovation, and enterprise, so quite a broad understanding of what it is to manage responsibly. And secondly, how can businesses productively and constructively participate in these collective perspectives, problems and practical projects? So that doesn't always mean putting the business at the center of our framework. It often means putting the problem or the technology at the center of the framework and seeing how the different organizations can be brought together around that problem, and what role businesses play in potentially leading that process of collective deliberation. So when I say productively, I mean, transformationally, what change can be brought about to addresses societal challenges? And when I say constructively, I mean how can those different organizations be brought together in a constructive dialogue to actually debate what it means to manage responsibly, what those problems are, how they're framed, and how they're addressed in very practical, solution-driven ways? So in a sense, we're looking at the long term, as well as the short term that businesses have to deal with, things like corporate social responsibility and the immediate agenda, say, of public relations, or policy, or developing new projects and services. The long term has this bigger question, the term of responsible innovation as institutionalisation. In a sense, that means stabilisation to recognised or shared norms. It means changing things and translating into practice and commonly shared and accepted indicators of good practice and societal transformation. How does that process come about? How do these longer term transformations and institutional change come about? That really is the bigger question of the role of business in society. And we will be tackling this, or we should think about it simultaneously at different levels, at the level of the organization, at the level of networks of organizations. So we might think about supply chains, procurement, or other kinds of organizations that serve governments, NGOs, civil society. And therefore, we may speak about the system level, the biosphere level, and the impact that different organizations, in particular, businesses have on the system level. And we might think about the individual level, so how you personally can reflect upon your experiences and potentially work to bring about change in your own organization. So let's look at some of these concepts. I'll be looking at theory to practice, first of all. But also, don't forget that we're interested in practice to theory, which basically means that when we do research on these topics, we start from investigating how things happen in practice, and we build our theories from them. In that way, many of our PhDs and our young researchers have been looking at these empirical phenomenon in places of the world where, in fact, many of the western developed concepts and constructs Don't necessarily apply. I'll be drawing on the work for example of one of our PhDs who's just finished her thesis called Lillian Kashimbo who is working on corporate social responsibility in Kenya and Uganda in Africa. And I would be drawing on the work that another PhD that completed a couple of years ago, Jimmy Tallier, did in the context of Indonesian palm oil which is a really interesting example. They very much looked at the history of the development of corporate social responsibility and responsibilities of businesses in those very different contexts. In a sense, they partly rejected the models that there were received wisdom from Western construct and looked more particularly about how responsibility is constructed in those very different contexts of the world. But when we look about this stable of normative concepts, as I've called it here, we know that in our earlier sessions on sustainability, we considered concepts such as triple bottom line, planetary boundaries or even sustainable consumption. In all of his sessions, he considered ethical business and professional ethics, occupations and how they differently think about, what responsibility means for their particular occupations or profession. In this, the third lecture, I'm focusing on responsible management. There is a traditional heart to that literature, which you may well know, around corporate social responsibility, or CSR and recent developments of that look at stakeholder theory and look at shared value, Porter's concept of shared value. In fact, shared values segues across to where I'd like to take this lecture, which is in a new direction about responsible innovation. Innovations come in all forms, and they are about societal transformation. Responsible innovation can be about new technologies and their role in society. Responsible innovation can be about organizational restructuring or what we're really interested in, new business models for sustainability or responsibility. We have new concepts here coming from political science and governance. Ideas of participative governments. Ideas of distributed governments. Basically, what that means is that governance is spread across lots of different actors so we no longer put corporations at the heart of our model. We put the idea of these different shared values at the heart of our model. We put problems and societal challenges at the heart of our model. Anticipative governance isn't actually dealt with in CSR and that's the idea that as these different organizations come together through particular methods or tools that we might look at and towards the end of this lecture, they might think about constructing a shared future. What future for a particular technology, for example? What future in terms of addressing a societal challenge? Climate change, but also obesity or cancer or poverty or water or energy. Anticipative governments aims to steer innovation and therefore, businesses within that milieu of organizations towards particular futures. Legitimacy construction is part of that. Legitimacy construction is a concept that one of my posy-docs, Leonie Dendler, has been working on. For her PhD here at Manchester, she did work on labeling, we might call this normative labels and we might think things like fair trade or the Marine Stewardship Council, or energy labels. What you see there is that each label has its particular normative care or concern. What do I mean by normative? I mean two things. I mean first of all, that they are about the idea of good citizenship on behalf of the corporation. Normative in the sense that particular variety and heterogeneity of societal cares and concerns. For example, fair trade thinks about the production conditions under which food or other products are produced. Whereas the Marine Stewardship Council thinks about the husbandry of fish and fish stocks which have been depleted. Or energy labels might think about energy conservation. We're already trying to get a picture of a landscape of different normative cares and concerns. The other aspect of normative has that word norm within it. That means that as these labels or other standardization, ideas come to fruition through this negotiations, they become normalized. Normalization means standardization and a shared perspective, so that others actually wish to participate and therefore, enlarge the scope of organizations involved and that involves a number of tensions that I look at in a second or two. Societal challenges are particularly important part of responsible innovation. As I said earlier, you might put that societal challenge at the heart of your construct rather than a particular business or organization. But obviously, for businesses, they are concerned to know about how their role, as a business, connects with a societal challenge. Therefore, they're interested in that nexus between their own business case and a particular societal challenge, which may develop actual markets of their own. There we have the idea of a stable or family of normative concepts with shared characteristics and shared concern for being good for the citizen firm addressing societal cares and concerns. And that's basically what I mean by a stable of normative concepts. In a way, all of these things that we have here that we've addressed in the MOOC, come under that broad umbrella. The bigger question that sits above all of these different concepts is a debate or a dialogue about the role of business in society. Here is the particular part of that schematic that I'm interested in, within this particular session of the MOOC. As I said, we're still going to start by introducing some theory. It'll be rather a rapid shoot through a whole history of theory, but I want you to get some idea of some of the key concepts that we're working with and where they've come from and how they've branched and come together, converged and diverged. But also very importantly, we don't always drive from theory and then try and apply them in our empirical research. What we also need to do is look at practice. This is something that Mintzberg thinks is very, very important, and many others, when we talk about the concept of grounded theory. It means we investigate things as they exist in the real world, and then we develop theories from what we see. I'm going to be looking at the consideration of some philosophy, and the history of ideas on the role of business in society. I'm kind of stepping back from the very real world of Manchester that we looked at in our location video, and to bring some theories and philosophy into the lecture now. But also to our present day, researching formed Manchester Perspectives. Which means that I'm drawing very much on our unique research that we've been doing here in Manchester. To try and help you and illustrate some of the things that I'll be saying, and to show you some of the tools and techniques that we've been developing in Manchester. And I think what's very important because we are interested in that very practitioner approach. I'd like you to look at that through the eyes also of some concrete illustrations through the practitioner interviews. And I'll be using the two practitioner interviews that go alongside this session, one with Lynn Prine, who previously worked in the multinational Astrozeneca around health and community issues and Nick Bishop, who stepped out from his career with an international bank to actually become a sole trader and a consultant. So a small business and how small businesses differently address the issue of responsibility in business. And for Nick that meant combining his fascination with leadership with his life long passion for sport and well being and he's carved himself a very responsible niche out of that area. And I want to show you a little framework that takes seriously how both of those very different practitioner interviews can inform and a little framework that I think you can use in your assignment at the end of this session. I want to introduce a concept that might be a little bit tricky but I think it's really important and it's a concept that's associated with O'Reilly and Tushman and in our resources, we'll give you a number of references for that. But this particular review past, present, and future of organisational ambidexterity is a good starting point. But I want to take their basic concept, which are lined in second, and apply it to the area of responsible management and responsible innovation. So this is a concept that comes from innovation studies. And it's about the simultaneous coming together of two ideas. One is divergence and variety generation, a process which opens up, we call that experimentation and that's very important for innovation. The other which potentially happens simultaneously and for that reason, I want to hold, I want you when you're thinking about this session in this lecture. To hold this two ideas in your head simultaneously. And the other idea is about converging, closing down, or standardizing, and we're calling that exploitation. Now, innovation studies says that experimentation, saying product design is a proliferation and a variety generating idea, whereas exploitation in product design and product development is the narrowing or funneling of that process into an actual particular product or application that might find its way up into the market. That's how it applies to the traditional idea of products and services as organizations come to commercialize them. But also you can think about the ambidextrous organization as being able as an organizational competence to combine those two different phenomena, to be able to experiment, open up, and generate new ideas and new variety, but equally to be able to exploit and settle down and stabilize those ideas. What happens then when we apply those ideas to responsible management, and these normative ideas that we outlined earlier. So let's start with the first of those two ideas which is experimentation. What does this mean and how does it help? As we said, it means the opening up and trialling of new experiments in responsibility. And it leads to a process of variety generation. It means trying to make sense of the world, identifying and interpreting who should be responsible. What should those organizations together be responsible about? And how to put this idea or policy or discourse of responsibility, for example questioning a particular issue such as energy or climate change into concrete action, and that involves creating tools and methods that can be used collectively across different kinds of organization. We might call this process Narraction as it involves both a narrative or a story line and action. Putting that narrative into some concrete implementation. It involved developing ideas and it involved design. So it also involves new combinations of actors and partners. This may change. You may have different actors and partners involved in different kinds of projects. And it involves designing new methods and tools. Some of which we will look at in a minute. New ways of understanding at an interesting concept called Boundary objects, which involves creating new frameworks, instruments, and tools for creating that shared understanding across different groups and communities. Basically, the idea of Boundary objects means creating something that different communities that might come from different disciplines and are used to different kinds of languages, can actually work with together. So in that sense, it breaches or access a boundary between different kinds of community or different organizations, and quite often these tools that were interested in when we talk about responsibility or corporate social responsibility, do just that. There might be a document, a strategy, even a manifesto, but they give a framework and they give the headings that are most important. And the process might involved looking at new topics and foci, new adaptations, new responsiveness to new problems that are emerging in that external environment that we talked about before, and it involves responsibilisation to changing environments. And by responsibilisation, I basically mean how do those actors come together with this question of how they are going to be responsible from the business context but also policy, government, NGOs, all these diverse actors. It's quite a challenge to bring them all together and create something that everybody can line up to or align themselves with, and that's where the concept of legitimacy construction that I've been working with Leoni Dindler on comes to the four. Because in that concept, what we developed was the idea that legitimacy construction is very important when you're trying to develop this collaborative talk. And what we've decided is that it's actually a relational concept and then only this work from different labels and schemes. She finds that a relational idea is something where the legitimacy of an organization isn't decided by that organization but it's decided by the other organizations. So we might say, the legitimacy of multinational can't be decided by that multinational but has to be given to that multinational by Non-government organization or civil society actually advocating legitimacy or supporting that multinational. That's why it's so important, and in fact that's why we see a number of these collaborative ideas, these collaborative projects do actually break down. So then it's not a case of once they start, they have a momentum or a dynamic, it actually means that sometimes they do break down, because the legitimacy is not taken for granted, it has to be earned, if you like. And that legitimacy construction, earning, is an important part of our work on understanding how these collaborative labels come about. Then if we look at the other side of the coin on ambidexterity, it's about exploitation, which is about, as those negotiations come to fruition, they close down around a norm. You do have to have normed ideas for them to be shared. What it means is a negotiated agreement or a settling on a shared perspective. There are many examples in industry, and there are many kinds of actors including industry associations, and it involves things like the creation of standards. An example in the social responsibility arena is the ISO 2600 on social responsibility, which you may well know all about, and if not, there's the link. And there are other examples. For example, the World Business Council for Sustainable Development works on trying to develop these shared perspectives and tools, as does PRME, our co-sponsor for this MOOC. Principles of Responsible Management Education is trying to collectively design a shared understanding of the competencies of responsible management. So that, for example, when people have been educated in particular competencies or skills, industry or organizations recognize those skills, and therefore they spread. People become recruited that have been developing or working toward a curriculum that has the PRME competencies involved in it. And it means that the organizations, or often universities or training organizations that have been building those PRME principles into their curricular, are recognized. So, normalization exploitation is kind of processive, shared recognition of a standard. So let's look at ambidexterity in normative business models. We can look how historically the concepts of which we're interested open up to generate variety through experimentation. That is that concepts proliferate, usually at the beginning of the process. Or you might start with a concept starting in one little corner, and then other people come and they change that concept, they develop new ideas, and those are processor proliferation. Then at some stage there's a kind of settling, or close down as agreement, a standardization, as the idea consolidates. And in that sense that we'll see in a second how that has happened historically around the concepts that we are interested in, through the work of Oliver Lash who's been doing a PhD with us for the last four years, and is actually the inspiration of this MOOC. And you know Oliver from the other sessions, but also, I'm very interested in the idea of dialectics, and this is quite tricky. This is about you holding in your head experimentation and exploitation to something that co-exists, and may create tensions which nudge a next phase of change and transformation, eg a new issue rises, or a breakaway position is taken. And that's what we understand by ambidexterity dialectically in innovation processes. So let's turn now to the concept of corporate social responsibility, and its history and institutionalization. Basically, what has been the motivation to this concept? And what are the stakes that have been at stake? How has it moved, and how has it changed? We can start, in fact, by looking a long way back, and in the diagrams that we'll look in a second, we go even further than this. But actually we might look at Donham 1927, on the social significance of business, and that is this debate about the role of business in society, and about business ethics. In a sense, here we have, at the heart of Donham's writing, this big question of the role of businesses in society. And what he puts at stake is that at this time, in a sense, the business profession wasn't really established, wasn't really stabilized or wasn't, didn't have the status the other professions had, such as lawyers, or accountants or medics. And what Donham was trying to say is that business people are a really important force for change in society, and that they are an ethical group in their own right. And therefore he was, in a sense, contesting different groups in society, on that the stakes they had at stake was in order to be a valid, well thought of group in society, and that's what reputation and responsibility are often all about. The stake at stake is about reputation, about being seen and being understood by others as a highly reputable organization or profession. And you see there in that Harvard Business Review article, which we've provided to you as a resource, a very early dialogue about that. But in a sense, Archie Carroll is the forefather, or the iconic person behind the concept of corporate social responsibility. And quite recently he's written this piece which traces this history over five decades. He locates the start of the modern idea of corporate social responsibility in the 1950s, with the first generation of ideas of what it is to develop a specific concept called corporate social responsibility. He shows that in the 1960s these definitions expanded, and in the 1970s they proliferated. But then in the 1980s, we had a different kind of movement, which was to, rather than develop the concepts and ideas, to try and empirically stabilize them. To look at quantitative performance testing of the concepts, what do they look like in practice, how do companies actually do it, and what difference does it make. What performance measures could be attached to the claims of corporate social responsibility. But then again, you had a bit of divergence occurring in the 1990s and 2000s with alternative constructs that we look at because they become more about stakeholder theory or shared value theory. What we'd say in the 2010s or the most recent period is that there's a move towards new business models, and those new business models take different forms. And we're breaking away from the, if you like, the conceptual development of business model theory, but we're looking at new business models for sustainability or responsibility, or sustainability and responsibility, which is what Oliver Lash has been working on, and what we've called the normative business model. So Oliver's been looking at corporate, sustainability, and responsibility and rather than CSR, he's called this CRS. Let's look at another idea which is what Campbell has called the institutionalisation of societal responsibilities. How do these ideas become institutionalized that is how do they spread and how do they get taken up, and what are the motives of organizations of businesses that want to take this idea seriously into what we might called deep institutionalisation. Which doesn't mean just pay lips services to them or even doesn't mean just have part of the organization like, a unit called the department for corporate social responsibility, but how to bring it in fundamentally to an organization. On the one hand, he talks about the need for an impenetrable flaw. As well as say, the voluntary spies of CSR. So much of the literature is about reaching out to all this variety of issues and concerns. But what he says needs to be taken on board first is as we all see in our examples in Africa. What is the base floor below which if organizations slip. There is a crisis or a controversy surrounding that organization, and it's really important for the organization to establish that floor. As well as the proliferation of ideas as to where it might voluntarily go in terms of its different issues of responsibility. And then he turns the motivations that he thinks socially responsible corporations adhere to, and he considers public and private regulation as being a motive for CSR. So in that sense, the relationship between governments and corporations means that public regulation becomes a driver for innovation. We can see that happens quite a lot around environmental regulation. He identifies the role of NGOs or non-government organizations as monitoring or whistle blowing. And what he argues is, NGOs play this important policing role and because they are there, they act as a kind of backstop to tackle or watch or monitor what companies are doing. And in that way, they motivate corporations to act responsibly because they fear NGOs making transparent. Things that they might be doing that might then create a controversy which might then affect their markets. He considers and this is about cultural differences in different parts of the world, but institutionalized norms regarding appropriate corporate behavior. In a sense that is about self regulation and about norms emerging which might be about sustainability or environment are very likely to be about how, for example, ethics and whistle blowing is dealt with an organizations. So basically, an organization will start to do something because it's considered the right thing to do and that becomes the norm for the organization. It considers the idea of lead organizations. Lead corporations whose behavior others follow because they seem to have a reputational value. And he talks finally about organized dialogues between corporations and other stakeholders, and that's in a sense where we end up with this lecture on this MOOC. About how organizations, how companies and businesses can play a lead role in structuring and forming those debates into which they then play, and bring other organizations along with them, or into which they collaborate with other organizations in order to determine and identify and frame what the problem is. That they are then addressed with their own responsibilities and how that involved profit making but how it also involves addressing societal issues and challenges. So let's bring this story right up to date by looking at the most recent insights. As we'll see in a second from Oliver Laasch's PhD, which he's just completed so we're hot off the press here. He's created connections between two separate origins of concepts is sustainability and responsibility and argues that they're coming together. And in these new integrative approaches such as new business models for sustainability and responsiblity, which was kind of where we're at right now in 2016. But at the same time, if we take this idea of proliferation of variety, what we see is that immediately new ideas are proliferating and where they come from. Which part of the world they come from? What kinds of societal issues they address? And importantly, what we thought about is how CSR is adapted to place and context. On there, our work with Jimmy Tanaya, who've completed his PhD in 2013, he worked on Indonesian Palm Oil. And what's really interesting in that case is that the Indonesian government created a law that required all companies to report on their CSR activities. Why do we think that's important? We think it's important because it actually created environment and transparency which enabled other actors in society such as NGO Civil Society, to look at those reports and therefore interrogate them, understand them, understand the businesses. So in a sense, it creates a new research area, helps researchers to look at what companies are doing. But it also requires that companies are transparent about what they're doing. And therefore, that transparency enables the dialogue which in the more closed system, where you haven't got those kind of laws, that transparency doesn't necessarily exist. Lilian Kishimbo who's just finished her PhD on corporate social responsibility in East Africa, and we look at a second at some of the graphics and tables and findings that Lilian came up with in her PhD. This time is the work of Oliver Lash, and what he shows here that both the concepts of sustainability and responsibility have a long history. In fact, Oliver places corporate responsibility way back in the work of Robert Owen right here in Manchester because he worked on business principles which weren't about a split between managers and workers but around cooperative ideas and about profit sharing and about engaging jointly with work forces about how to share those profits and how to make decisions for the organization. How to set up the structures that really engage workers in those processes. He then goes on to the work that Dunham that we started with and others had in those early years. At the same time, over unsustainability, which we're not really focusing in this session, but you see this different branch. Coming through Silent Spring for example by Carsen and through into the Club of Rome and the limits of growth in the 1970s. And how these ideas started coming together. Corporate social responsibility, the work of Carroll that we've looked at. Stakeholder theory, the work of Freeman, who sits squarely in that. And then, the work about corporate social performance. As we saw, that consolidation came around questions about how to measure social performance. How things such as a triple bottom line which is a concept that you will know about or we covered in other sessions. And how things like lifecycle assessment which is about how products circulate in society, and how, for example, they have an impact on the environment, and that creates new ideas. For example, of circular economy business models, which are concerned with redesign, remanufacture, bringing those resources back into economic use so that they become more environmentally sustainable or have less direct impact on natural environments. So what Oliver claims is that corporate responsibility and corporate sustainability are in the current period actually coming together under these new kinds of more integrative Business models. What he shows here in this next graphic is the origins the concept of business models. And we're particularly interested in business models for responsibility and sustainability in our work here at Manchester. But what he finds here is something that we took as a criticism of the business model literature, in the sense of we have to understand its origins and information system modeling and in business for example. And understand its origins and operations managements and logistics and therefor, it wasn't really the same kind of origin as we had from responsibility or sustainability, but we have been bringing these ideas together. Therefore we have to do some really hard conceptual work about alternative business models and creating business models which understand holistic, deeply institutionalized, organization wide and multi-organization wide, business model development around responsibility for example. And that's really where we're at the moment in Manchester so let's touch base again with some of those theoretical milestones. We saw how Donham in 1927 had the sense of the responsibility of business people and business leaders to a wider society and that really what he was talking about was the responsibility to be a leading force in society, vis-a-vis other leading professional groups. He puts this in quite rhetorical terms. He says, unless more of our business leaders learn to exercise their powers and responsibility with a definitively increased sense of responsibility towards other groups and community, our civilization may well head for all of its periods of decline. So he definitely put business leaders on a very high state of alert as to their responsibility to other members of the community. That is perhaps quite a authoritarian stance, let's say. It's not necessarily the stance that we share today. But Milton Friedman had a different view of the role of business in society and it's one that really focuses down on shareholders and profits. Milton Friedman's view in 1970 was there is one and only one social responsibility of business. To use its resources engage in activities designed to increase its profits. Clearly what we're talking about in this session of the MOOC diverge is quite a long way from that understanding responsibility because it moves towards the idea of societal challenges, problems, and issues. That may well have markets attached to them and profits attached to them but, opens the debate about responsibility being more than profit making. Edward Freeman worked on the stakeholder approach which we look at some tools, models, next up in a few seconds. And Archie Carroll looked at his pyramid of corporate responsibility that many of you will know about and we've already talked about Carroll's work on historical evolution of the concept of corporate social responsibility. So here's Carroll's quite well known pyramid of CSR. He talks about the baseline being economic and then being legal and regulatory so all businesses need to have that base line that we saw Campbell talk about to fulfill the legal requirements that are already regulated. And then a level of ethical responsibility which we might see associated with Darwin for example. And then this idea of voluntary or discretionary responsibility, which is where we're at when we talk about this proliferation of varieties of responsibility depending on where the business is individually located, be it the sector that it's working in, or be it its place in the world, it's geographical context. So Oliver tells us in his textbook which is one of the readings for this course that after the biggest companies 96% of a formal corporate responsibility department. So it obviously has consolidated and has achieved that convergence that we talked about in terms of exploitation settling and stabilization. He says there are three stakeholder groups that most influence a company's business responsibility initiatives. 37% of managers in this particular survey mentioned customers as a driving force, followed by employees which we haven't really talked about very much. And then shareholders which we've started to talk about and we'll talk about more. In 2011, he says 95% of the world's largest 250 companies formerly reported on their corporate responsibility activities. In 1999, a mere 35% did so. So there we see an example of what Carol was talking about, in terms of that phase where things moved from actually saying or claiming corporate responsibility to trying to measure and report on that activity. But I would say on that slide, where a focusing on the largest multinationals, where CSR is a dominant concept. Rather than small and medium size enterprises. We looked at in other aspects of our responsibility sessions of the MOOC. For example, the work of Nick Bishop is very different major corporate multinational. Where as Lin's perspective was from a major corporate multinational. And we are also interested in this more distributed idea of corporate responsibility or responsibility which involves many other kinds of factors including charities and NGOs which doesn't really fit this generalization. In letting Kashimbos work in Africa, she's more focused on national companies. So not these huge multinationals with a foot in many different countries. She focused on the national companies of Uganda and Kenya. And saw how their approach to corporate responsibility is quite different to what we have here. This again, is Oliver's work. And what he shows us here, is how we talked about the variety in societal cares and concerns here by the FTSE 100 companies. This is done by analyzing the FTSE 100 Corporate Social Responsibility reports. And he shows what different kinds of activity are mentioned. And what we see there currently is much more focused on the environment, on safety, on jobs and employment, on education and people, on a different issue which is about diversity and inclusion. Now, diversity and inclusion is an important element of our work on responsible innovatio,n but we haven't yet seen it referred to in corporate social responsibility in that historical take. So therefore, we seize ideas of diversity and inclusion which we have brought into the whole of our MOOC, it threads through the whole MOOC. Be an important part of the health of an organization, if you like, climate, carbon and energy are some of our most recent concerns and that's where a lot of companies are focusing their attention. Health, infrastructure, the use of natural resources in a context of limited natural resource availability. What we talked about a second ago, about business models of circular economy, take that care and concern for depleting natural resources, eco impact reduction. What kinds of impact? You have questions there about biodiversity and how companies and organizations work to maintain or stop the decline of biodiversity. Quality of life and well being. Again, this is a new issue, because it's not necessarily just associated with medicines, but it might be associated with healthy lifestyles. With sports and exercise, it might be involving addressing questions of obesity. It might be involving addressing questions of sugar and salt and processed food, so it might take a completely different take to food and nutrition. Water, the depletion of water, as a result of climate change. Transparency, we started to talk about and there we have bio diversity. So what we have though, is a variety of cares and concerns that the modern corporation considers. And what we'd like you to do in your assignment for this session of the MOOC is to think about that list and see how that applies to your context or indeed whether or not there are different societal cares and concerns that affect you in your own situation. And let's see now if that was the FTSE 100. Large companies. Let's see how this applies when we think about developing countries. We see quite a different list. We can't necessarily take for granted legal compliance in some developing countries. We can't take for granted necessarily, a situation where governance is stable or where governments provide some basic public goods. So what we tend to find, is the corporation stepping in to some of these areas which in some companies are provided by governments as public goods and in some countries are provided through the proactive work of corporations involved in community support, disaster relief the empowerment and funding of small and medium size enterprises. It's also true that if you think the earlier concepts of corporate social responsibility, essentialize philanthropy, and in a sense, that concept has moved on. The definite in the work that we find, what Lilian finds in the developing countries is that philanthropy is still a major motivation. And what we also find in Lilian's work, is that although we may take for granted, even critique the idea of a separate corporate responsibility organized unit in modern takes about corporate social responsibility. In fact, these developing country contexts, it is an innovation in itself to have an organized focused corporate social responsibility department or unit. Environment health, had a large role, larger probably in some of these developing countries In providing basic facilities an education. Let's then finally, start looking at some concrete practitioner tools. Our first tool builds on the concept of stakeholder theory. And it evolves establishing stakeholder maps. So this is something you might like to have a go at. It has several aspects to it. It identifies focal identity, and that means identifying, say, the corporation at the heart of the stakeholder map. And as we've already started to open up, we may not necessarily put a focal entity at the heart of the problem but stakeholder theory starts from that point. You then kind of broaden out to list the stakeholders, prepare a complete list disregarding type or strength of relationship to the focal entity. So it's not a systems map. It's not an innovation systems map where you try and establish all of those organizations in a distributed governance type of way. You basically put the main focal entity at the heart of your stakeholder map. And then you list all those other organizations that you think are important stakeholders to that focal entity. You then organize your map in terms of groups of stakeholders with mutual characteristics. They may be regulators, for example. They may be executive regulators or they may be government departments themselves. They may be supply chain organizations. They may be competitors. You may want to collaborate with your competitors. They may be organizations that are involved in the similar research field. Researching a particularly a particular technology. So that's what that involves. This is an approach then to looking at those stakeholders in an expanded map where at the center you put the focal entity and you talk about the internal governance organization around it. For example, you might put employees or the owners of the organization or the board of governors and then you broaden that. To a primary circle of competitors, clients, regulators, media we haven't talked about so far, suppliers, local communities. And then, you might expand that map further into future generations. The natural environment, employee family, media recipients, new media, social media. And its influences, NGOs and suppliers' suppliers. So we're actually opening up this map. You might think about your stakeholders in terms of prioritization. You might think, for example, of a dormant power relationship that might kickstart into the future as being a very important power relationship. For example, the particular NGO. You might talk about, think about urgency. You might think about those stakeholders that you have to urgently bring on board, have a dialogue with. You might talk about a longer term of legitimacy, which stakeholders do you need to bring on board to your stakeholder map and your dialogues in order to develop yourself as a legitimate organization. In this idea of managing for stakeholder value, we have three steps. The process of stakeholder management consists of the two tasks, stakeholder assessment, understanding those stakeholders, that process and those models and tools that we just looked at. And stakeholder engagement, how to interact with those stakeholders. Stakeholder assessment consists of the two steps of stakeholder identification, the process we've just talked about, stakeholder mapping and stakeholder prioritization, which stakeholders in a busy world to prioritize your engagement with. Stakeholder engagement, then, consists of two further steps, stakeholder communication, what should that communication be, who should it be with, and what should it say? What should be the message? And the co-creation of activities through which stakeholders in the company start to collaborate for a joint objective or a joint project. Let's take take that stakeholder concept one step further and talk about Porter's shared value concept. Porter aims to breakaway from a CSR understanding. He actually claims to have created a new concept with shared value. He talks about societal needs, not just economic needs. Defines markets and social harms that can be created by the company. And asks the corporation to consider jointly with other community players, what the implications are of the company's activity on those other community actors. He claims to move beyond the idea of trade-offs of economic, social, environmental. We start to move here towards the idea of holistic business models where economic, social, and environmental aspects, in particular profits, are actually integrated to the new business model. Thus, we have the idea of the blurring of profit and nonprofit boundary. He's actually talking about win-wins where profits and the achievement and responsibility go hand in hand. He talks about profits actually involving social purpose. He talks about joint company and community value creation. We're no longer putting the focal entity at the heart of the module, we're looking at the co-construction of the solutions to some of these problems and then what it means for the company. Integral to competing, integral to profit and transforming procurement and we get to the idea of new business models. Let's look at where Oliver and I have taken some of these ideas in creating a theoretical construct that we've called the normative business model. But in actual fact, this was based on a case study not of a business but of a university. It's based on a case of Arizona State University in the United States and what it tries to answer is the question not of what is being transformed, ie, that variety or convergence idea. But about how transformation came about in that particular organization. We, in a sense, after doing the case study of interviews and observation and looking at reports and documentation from the Arizona State University case. And then comparing that and developing the literature on institutionalization, we came up with four cornerstones of the normative business model. The first, is normative orientations. What we mean by that is those cares and concerns. What Arizona State University did was transform the heartland of its cares and concerns away from the idea of a university being about exclusive education, towards the idea of access to a wide demographic of students. Much wider than previously had been recruited into the university to represent the demographic profile of the State of Arizona and it succeeded in doing that. So it widened access. The second key normative point that it addressed was how to change its research base away from abstract or theoretical ideas, towards very applied addressing societal challenges and problems. That involved a huge fundamental restructuring of the university away from disciplined-based departments, towards interdisciplinary schools and departments which addressed particular societal challenges and that was a fundamental change. That's one cornerstone, normative orientations. The second is the role of institutional entrepreneurs, and here we bring in the important idea of leadership. Leadership happened from the top. Leadership was also facilitated in the sense of entrepreneurship, all the way through and throughout the organization. An important tier, if you like, the equivalent of middle management which was center directors and their role in defining what it meant to be responsible at the sense of their own centers and institutes. Even the engagement of all the students in entrepreneurial responsibility led, societal challenge led projects themselves. In that sense, what we mean by institutional entrepreneurialism is top to bottom and bottom up engagement with the process. What we also found was a process of deinstitutionalization. What I mean by that is that in order to bring about transformational change of the kind that we saw at Arizona State University, you in fact have to deinstitutionalize the current status quo and the norms that are driving the organization. How you do that, in terms of making those changes, involves a dual process of taking away the things that would dominate in the organization before. At the same time, as introducing new structures, new governance mechanisms, new ways of doing things, new norms. And herefore, the fourth cornerstone was about the governance instruments and tools that were designed by Arizona State University, including the financial business model that enabled it to change and then grow into its new identity. You have the idea of the business model instruments, governance instruments that were bringing about that change. So that is is where we're up to on our business model thinking. I want then, finally, for you to look at two very simple frameworks or tools that we want you to use in the assignment for this session of the MOOC. One is a very simple matrix that I just put together for you here, it's about inside-out and outside-in. Let's take each of the quadrants of this matrix in term, and illustrate them by listening to the two practitioner interviews by Lynn Prime and Nick Bishop. If you listen to Lynn's interview, you can see how important in a large multinational it is to develop insight in perspectives. That is, about communication and translation inside the organization. What we understand as responsibility translates as it moves around within the organization, and Lynn talked about internal communication. The next is about inside-out, which is how, as we've said, a large organization communicates and works with its external stakeholders. But in a way, Bishop's work is quite different to that. He tends to work through networks of organization, he's kind of fleet of foot and he's part to that network. He builds his networks and he brings other organizations together, In a sense, he's a typical intermediary player. He brings other organizations together and in that sense, he works very much in that outside-out perspective. For a start, he's a sole trader and a consultant and therefore, there is no real sense of insider-in. Because all his work is either communicating and amplifying his ideas to an outside audience, and very importantly, outside-out in terms of bringing all those different actors together. I want you to think about those four corners of that matrix. But also, I'd like you to is consider a new tool that we've been developing in a European project called RES-AGorA, which has just finished this year. This is about responsible innovation, and we developed a tool called the Responsibility Navigator. This again, takes some of those new ideas of distributed governance, so multiple stakeholders involved in the framing of problems and the addressing of societal problems. Framing of questions, what question should be asked, how they should be asked, involves bringing a lot of different diverse organizations together. And how they might co-construct solutions to those problems such as, as we talked about, the labeling cases and the role of Legitimacy Construction. The Responsibility Navigator then has 10 principles. I'd like you to look online at this principles and I'd like you to use those principles towards your own framing of a particular situation or issue that you're facing. I'd like you to combine those 10 principles with the four quadrants of the inside-in and an outside-out framework that I talked about a second ago. I want you to go through all the different cells that creates for you in order to think and not every cell will apply. But in order to help you create a thinking tool that will allow you to think about responsibility in a particular situation that you will either face or wish to setup. I want you to use that as your framework for understanding that problem, understanding what you might do about it, what change you might be aiming to bring about, and how you might recognize that change once it's brought about. What you're actually trying to make happen as action in the world? With that last part in setting the assignment for you, I'd like to say thank you for joining me for this lecture of session three of the MOOC. Good luck with the assignment. Do connect with your peers on the LinkedIn network. We look forward to seeing and hearing about your progress and look forward to seeing you at session four of the MOOC. Thank you.
