By Bill Valentino
Corporate Social Responsibility begins in a company at the very top. In the organizational structure there is the CEO and the managers who ultimately report to him or her. Their primary function is to make sure that a company stays well organized and profitable. They keep complex organizations on time and on budget and maintain equilibrium and control so that an organization can meet its goals.

In this structure the CEO is the key person who sets the tone and direction for the entire company. It is at this level where embracing CSR takes on an important and critical role in creating the corporate and cultural identities of companies that permeate every part of an organization. It is here where mindsets are created that influence how people think, how they act internally and externally and what roles a company will take on in their communities. This is where the invisible rules of company culture and corporate branding are generated as the sub-conscious patterns of behavior, values and beliefs which are the prime motivators of the attitudes and actions that determine the performance and missions of entire organizations.

The CEO is essentially where the message must originate to both internal and external stakeholders that a company is serious about CSR.

This is where corporate social innovation, if conceived and executed thoughtfully, needs to be understood as an important tool to create win-win scenarios for businesses and the public. Here at the top, the efforts and decisions to tap a company’s resources to strategically match social, community and public needs creates the potential for immense benefits for all parties. Such thinking must come from all senior managers who must understand that actions speak louder than words. It is in managing the profound interdependency between businesses, society and the environment that CSR enters into the job description of every CEO and manager. It is in this function that executives are needed who are able to combine management skills with the art of leadership.

Management is defined as the art and science of getting things done through others. This planning, guiding and directing the work of other people is better known as business administration and it encompasses the set of skills found in the MBA toolkit that prepares and enables a person to manage a business well. But businesses are set up to make money, which is the most basic goal of management. No matter how well a manager does anything else, those who loose money for their company will most likely not keep their jobs. Whatever a business does, its most fundamental goal is profitability.

Focused predominantly on profitability, it might seem very unlikely that managers will readily embrace CSR as a strategic business tool. Unlike the CEO, they are normally not gazing out on the big picture, thinking about how to integrate CSR into everyday business activity and mapping the company’s role in the community.

They would probably argue that businesses already provide sufficient value to society if they operate efficiently, use resources wisely, provide employment and deliver goods and services that support a healthy economy.

These arguments are no longer very simple nor are they valid. To sustain profitability, CEOs and senior managers must act in the best interest of their companies that they manage. That entails the difficult job of remaining at all times receptive and responsive to a plethora of conflicting demands of a large number of stakeholders including customers. employees, analysts, suppliers, media. government regulators, activist groups, investors or owners.

An increasingly important stakeholder demand placed on CEOs and their companies is the expectation is that they must consistently support the communities in which they operate and safeguard the environment from the impacts of their operations. This idea is becoming pervasive in today’s competitive, complex and global business environment. To some this may seem utopian but it is already a reality that cannot be ignored.

Managers are being challenged to demonstrate leadership. They are required to foresee future challenges and opportunities and to energize their organizations. More critical than just managing by reacting to events and conditions and solving problems, leadership is critically needed to direct companies forward with vision and wisdom. As leaders who embrace CSR and integrate it into everyday business operations emerge, they act to shape goals, develop new ideas, reach people on an emotional level and take on challenges that go beyond just the bottom line. It is under this type of leadership, that organizations are able to more easily adapt themselves to a new and more challenging competitive business environment. Companies that combine management with leadership skills using CSR as one of the key tools to strategize and organize, are evolving into what can truly be called visionary. They are accomplishing this through success in weaving themselves into the very fabric of society, whereby they consistently make significant impacts on the world while not forgetting the positive impacts on their own companies.

The debate about whether corporate social responsibility or sustainable development is right for the bottom line has been decided. The market, stakeholders and even governments have spoken out on this and they say very clearly that they care very much whether companies are good citizens. They say that the issues of environment, social development and sustainability do in fact matter very much. Leading a company that excels in CSR is now synonymous with being a visionary CEO or a very good modern manager.

Where leadership is setting the pace, traditional management skills need to be blended with the art of leadership Rather than emphasizing just planning and strategy leaders are now emphasizing corporate purpose. Rather than focusing on formal structural design they are focusing on effective management processes. In this framework, leadership and vision are directing companies towards the future. Rather than just being driven by profit and numbers they are more and more being guided also by core ideology made up of core values (essential, guiding principles) and purpose (fundamental reasons why the company exists).

Visionary CEOs and managers today are using CSR to establish innovative approaches to creating additional value through competitive advantage and by shaping, defining, and articulating purpose, while guiding people through an organizational processes. The underlying aim is sustaining their own profitability and growth while at the same time ensuring benefits for the communities in which they operate.

When vision and values are interconnected through CSR and used by CEOs and managers in running their businesses, this links the organization’s goals with action. The everyday decisions and activities of companies then reflect the tremendously positive image of what an organization can be or can do in the future through management and leadership. This enables them to better succeed in the marketplace through CSR, an innovative means of creating greater value for their stakeholders and their organizations.

About the author:
Bill Valentino, continuously with Bayer in China since 1987, co-directs the Tsinghua-Bayer Public Health and HIV/AIDS Media Studies Program and is a Senior Guest Lecturer at the Center for International Communications at Tsinghua University. He is also currently the Chairman of the European Chamber's CSR Working Group and a long-standing member of the AmCham CSR Committee in Beijing.

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