COMPETITIVE ADVANTAGE THROUGH CORPORATE SOCIAL RESPONSIBILITY

Professor David EatonUniversity of Salford, UK

PVPLS SoBE Lecture Series5TH DECEMBER 2011

INTRODUCTIONStructure of Presentation:

– Definition of CSR;– Scope of Industry;– Definition of CA;– Difficulties of defining CA;

– Methodology – by case study;

– Outputs and Benefits.

CSR DEFINITIONSCSR – Business exceeding the legal or

commercial expectations of society in the management of economic, social, and environmental impacts;

CSR – delivering the TRIPLE BOTTOM LINE; economic, social and environmental

CSR – Revised Methodology

– Sextuple Bottom Line – SLEEPT.

SocialLegalEconomicEnvironmentalPoliticalTechnological

SLEEPT: – Sextuple Bottom Line

Key Issues -1

Is Corporate Social Responsibility:–Accepted as important by business &

industry?;–Within the remit of a single business

entity?;–Incorporating features of ‘community’

concern?;–Incorporating issues of the ‘wider society?

CSR PERSPECTIVES

Pure PHILANTHROPY - ......

Rational Business Decision – Business Enlightened Self-Interest

PERSPECTIVES - 1

Stakeholder Levels:

–Systems;–Stakeholders;–Enterprise Cultures;–Globalisation.

PERSPECTIVES - 2Time Scales:

–Short term;–Medium term;–Long term;–Whole Life Cycles.

CSR CRITERIA of PUBLIC SECTOR

Anti-Corruption;

Sustainability;

Poverty Reduction;

Ubuntu ( Respect & Human Dignity).

CA

Definition-

Standard Models-–Canalised,–Neotenic,–Progenesic,–Parasitic,–BZ Oscillatory

FACTORS INVESTMENTINNOVATIO

NWEALTH

PROFIT

TIME

CA PROCESS

F Inv Inno W

Key:

F Factor

Inv Investment

Inno Innovation

W Wealth

TEMPORAL DEVELOPMENT: Standard Canalisation Evolution

F Inv Inno W

Key:

F Factor

Inv Investment

InnoInnovation

W Wealth

TEMPORAL DEVELOPMENT: Neotenic Evolution

Type1

Type2

F Inv Inno W

Key:

F Factor

Inv Investment

InnoInnovation

W Wealth

Progenesic Evolution

Type1

Type2

F1

F2

Inv1

FP InvP InnoP WP

Key:

F Factor

Inv Investment

InnoInnovation

W Wealth

Parasitic Evolution

FH InvH InnoH WH

Parasite

Host

B-Z OSCILLATORY

F Inv Inno W

Key:

F Factor

Inv Investment

Inno Innovation

W Wealth

(B-Z) Belousov-Zhabotinskii

TEMPORAL DEVELOPMENT: B-Z Oscillatory Evolution

Fig.5

Type1 Type2 Type3

QUALIFICATIONS & RESERVATIONS

Approximation of a Fuzzy & Complex Adaptive Dynamic Non-Linear system;

Zero Sum Process;

Limited to Rational Economic behaviour;

Appropriation by Ethical behaviour;

Negative Entropy;

Risk Transfer and Risk Profiles and VfM;

Mirror Congruence;

RISK PROFILE

RISK TRANSFER PROFILE

MIRROR CONGRUENCE

SPV GA

RTA VfM

Aff

RTAVfM

Aff

Reflection Mirror Axis

EXAMPLE

Dundee-Arbroath A92 Scotland

Reference details:

Claimed Benefits;

Triangulation;

Realisation;– Canalised,– Neotenic,– Progenesic,– Parasitic,– BZ Oscillatory.

REFERENCE DETAILS

Eaton, D and Akbiyikli, R. (2008) The Effect of Risk Transfer in PPP’s: An evaluation based on a UK Road Project. In Davis, H (Ed) Infrastructure Finance: Trends and Techniques. Euromoney, New York. (2008)

Eaton, D & Akbiyikli, R. Innovation in PPP. Book Chapter Ed by A Akintoye & Beck. Blackwells. (2008)

Eaton, D. (2008) Creating an Accurate Risk Register Encompassing Lucid Tender Requirements and Its Importance in Construction Competition. Marcus Evans, Prague.

Eaton, D. Public Private Partnerships. (2008) In Udrzitelny Rozvoj V Oblasti Spravy Majetku, (Environmental Issues of Development) Ed by Beran and Casensky, Pp245-250. ISBN80-01-03578-6. CVUT v Praze.

REFERENCES (CONT’D) Akbiyikli, R. Eaton, D. & Dikmen, U. (2010) Private Finance Initiative (PFI) for Road Projects in the UK – Current Practice with a case study. Traffic and Transportation Journal PROMET, Zagreb, Croatia. (SCI Indexed Journal)

Akbiyikli, R & Eaton, D. (2010) A Conceptual Framework for Operation and Maintenance Management in PFI Road Projects in the UK. Journal of Civil Engineering and Management, JCEM Vilnius Lithuania. (SCI Indexed Journal)

Akbiyikli, R. Eaton, D. & Dikmen, U. (2010) Sustainable Construction and Private Finane Initiative Road Projects in the UK. Journal of Technological and Economical Development of Economy, JTEDE Vilnius Lithuania (SCI Indexed Journal)

Akbiyikli, R. Eaton, D. & Dikmen, U. (2010) Financing Road Projects by PFI: Current Practice in the UK Journal of Transport, Vilnius Lithuania. (SCI Indexed Journal)

Akbiyikli, R. Dikmen, U. & Eaton,D. (2010) Risks and Risk Management in Heavy Cost Construction Projects. Journal of Professional Issues in Engineering Education and Practice ASCE USA (SCI Indexed Journal)

CLAIMED BENEFITS

Only way to do this! Been trying since 1966

Cost Saving – Approx 3%

Safety – No fatalities since opening

Environmental Improvements – landscaping and tree planting

TRIANGULATION

In-Situ Interviews;– ‘The Jewel’ in the GA Crown!–Revitalisation of linear corridor– Increased housing development– Increased employment opportunities–Road traffic improvements

• Flow times• Accident reduction

REALISATION–Canalised: road benefits–Neotenic: housing & social welfare

–Progenesic: new industry & employment

–Parasitic: trophic cascade–BZ Oscillatory: no evidence ++

REVIEW

Table 1: Public and Private Sector Attainment Matrix Beyond Traditional Procurement Mechanisms

PPP Criteria VfM Risk Transfer Resilience Affordability CSR Criteria Anti-corruption o + o + Sustainability + + + + Poverty reduction

o o + o

Ubuntu o o + o

Key + Positive outcome of criteria conjunction o No contribution above other procurement systems

CSA SUMMARY

ANTI-CORRUPTION – improved by Risk Transfer and Affordability characteristics of PPP;

SUSTAINABILITY – improved by VfM, Risk Transfer, Resilience and Affordability charateristics;

POVERTY REDUCTION – improved by Resilience characteristics;

UBUNTU – improved by Resilience characteristics.

CONCLUSION

Choice of Model;

Delivery of Model;

CSR – Clients and Industry: attainment;

CA – Clients and industry: achievement;

Multiple Reward Categories – SLEEPT – wider benefits than just economic!!!

CONCLUSION

Corporate responsibility for:Economics

EnvironmentSocial

VfMRisk Transfer

ResilienceAffordability

Private Sector

Public Sector

Impact on SocietyCorruption

SustainabilityPovertyUbuntu

Joint Venture

PPP

Whole Life Cycle

SystemsStakeholders

Enterprise cultureGlobalisation