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A low case

Once upon a time a leading manufacturer of non-durable consumer goods whose Steering Committee approved a new structure to deal with the crisis while preparing for a different economic cycle.

It created a new position, Social Relations Director (RRSS), directly depending from the CEO, a man with sensitivity about, power to enforce its principles and skills to successfully implement the Company. In short trying to introduce a model of CSR as he understood and saw possible to implement in the Enterprise. The Human Resources Department, came to be known Relations and was directly under the new Director of RRSS, and Institutional Relations. Besides the aforementioned Director RRSS hotline would cross to control and support the different departments involved with interest groups or "stakeholders": Commercial, dealing with customers, Procurements in Production, dealing with suppliers, etc., whose directors were responsible for reporting promptly to the new Director of the peculiarities RRSS, issues and characteristics of their respective stakeholders to coordinate with him the actions and practices to implement.

In short this meant that all departments were officially linked to the project without escape social responsibility function which would be studying and defining within the planned phased improvement plan. It was to integrate social responsibility into business strategy, developed from within, and progressively as a strategic plan as a tool for innovation, competitiveness and value creation in the organization.

The Executive President, I had always been in favor of a first line of management as short as possible, with only four or five directors, went to the front and kept the same staff and its basic objectives, although the implementation of each function took a new approach.

Without sounding statements on the vision and mission of the company, avoiding gimmicky marketing all about, implementing a process was evolving into a new corporate culture. The amazing thing is that this is being carried out gradually and without rejection by the other directors, except the HR Director who disagreed with the major change in your area. Fortunately he had a chance to incorporation into another company and resigned leaving the way open, which was a stroke of luck and positive effect on the Company.

The first phase of the implementation plan was inside of the new culture, the creation and development of platforms for dialogue, update codes of conduct and integrity and protocols with stakeholders. Video was prepared "ad hoc" for all internal staff and a "trainings" an hour every Friday multifunctional groups open to consultations, questions and suggestions. The Executive Chairman and new Director of RRSS, considered an expert by CSR professionals in the country, were convinced that this plan, which should be firmly implanted in nine months, additionally be a powerful engine of dynamism within the company to break traditional barriers between departments, and promote a quality orientation. In short it was an evolution for the new cycle.

After nine months the aforementioned, the second phase of the plan put to the departments of Institutional Relations, Marketing and Sales to work for a quarter at a general communication campaign for the launch outside of the new culture and its competitive advantages in the face of its stakeholders: customers, partners, shareholders, etc..

The plan for the first year "sit well" within the Company. A plan aimed at improving the quality, differentiation, customer satisfaction, and ultimately competitiveness.

However sales, although there are plummeting as much as does the domestic market, and despite a valuable export growth, still not rebound after the first two quarters of the project. The President, exercising again a matter, were instructed not to lower prices further, Head of Sales but got her point discounts approved by order volume. Priority was given to maintain the margin and brand reputation despite losing turnover, They said that experience of the Director of Marketing & Sales, in such a situation, significant deterioration of the margin hardly produces enough sales volume to offset the benefits.

The company remains profitable and falling profits is not as alarming, but the gentle curve descendant of sales is upsetting the largest shareholder, a capital risk that controls 55% of shares, which has decided to take up the matter and more closely monitor the Company.

(… continue)

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It's your turn!Share your opinion on this story down on the block "Leave Comment", and tell us your impressions in general or answer with your opinion on what you think happened in this case:

  • You think it's a change "light" inconsequential, or really could be something substantial to increase the competitiveness of the consumer goods company?
  • What do you think will be the reaction of the venture capital firm that dominates the shareholding? Unmount the plan started?? Do more deeply inform internal and external acceptance?
  • Are you in danger the TOP? Or the new Manager of RRSS? Or all of the steering group?
  • Do you think this is real or a small case is a synthesis of a business school case?

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4 Responses to A low case

  1. Maria Luisa says:

    I think TOP has to pay special attention with solid arguments and expose the advantages Equity RSC plan for the development of the company and its social reputation. However parallel and equally important is to maintain profitability levels expected from the business so you should pay attention to identifying problems and solutions that are negatively impacting.

    • Rafa House says:

      The sustainability thinking companies should not seek only the maximum benefit without violating the law of the country. Already fortunately TOPs and managers with sufficient sensitivity for application to the extent possible CSR policies in their companies. But Maria Luisa, I completely agree with you that companies are not NGOs, and Social Responsibility programs if they add value to the business, parameters either tangible or intangible values, not be sustainable “to be”.
      The Directorate has to get the balance and equilibrium crisis is demanding the return of the era of “boom”, but accommodating and income maintenance benefits expenses while, as you say, identify the problems that are impacting negatively and seek solutions.

  2. Rita the singer says:

    Of “light” nothing. It is a profound change that will hopefully succeed.
    Besides this TOP, as you say, is a brave approach. Instead of ordering an ERE and dismiss the veterans with higher pay, jobs keeps trying to improve their motivation and efficiency. Instead of using services of a consultancy, goes and hires an expert in payroll. This TOP must come from another galaxy or gone mad, crazy .... I'm afraid the figures of venture capital, which are “putos amos” (Guardiola dixit”) I will soon put out on the street. By going against the grain, by no means cut as demand, and to increase the “headcount” Company. All these sins against humanity.
    And I buy the Temora, porfa mandaló a mi company, missing hace a director so.

    • Rafa House says:

      Rita,
      I had not comentabas on Blog. Welcome back!
      The President also exercised the functions of Director General is not crazy, crazy. Rather I find a man who knows his stuff, you want a management team aligned, and without putting anyone opens doors to those who are not willing to support the project.
      Surely is basically in agreement with staff, surely love your company and your job, policies and understand that firing and hiring accordion to the minimum market rate does not generate a good working environment and good corporate image, and resists cutting until it is indispensable. The problem is that the finished product stocks are rising and it is logical to wonder how you will explain to the “p… amos” it will eventually sold.
      I can not reveal whether it will proceed with its strategy or not, because I expect new comments from other fans before the new post about.
      Thanks for following the blog and see you soon
      Rafael

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