Case 5: HP Flashcards
Background: new CEO and CSR
Hewlett-Packard (HP) had a long history of engaging in corporate citizenship, dating back to its founding. By 2009, however, under the leadership of its latest CEO, Mark Hurd, the company had lost its focus on corporate social responsibility (CSR). Hurd instead focused on undertaking a financial turnaround and overcoming other reputational challenges; he viewed CSR and philanthropic efforts as costs rather than as strategic levers. Board and employees asked to start engaging in CSR again.
Background: goals of new team
- The new team, the Office of Global Social Innovation (OGSI), had to devise a pilot project to demonstrate the new approach.
- New approach: go beyond CSR; implement projects that would have true strategic importance for HP
- OGSI uses United Nations Millennium Development Goals (MDG) as template (Vorlage) to set HP’s objective -> Identify where CSR work could have a big impact
- Mission: Increase HP’s brand value and revenue through social investment programs that are aligned with HP’s overall business strategy
Background: Kenya mission
- Identified that HP was the biggest hardware and software provider in the healthcare sector (business area in which HP is strong and where the company was planning to grow)
- The project under consideration was an engagement that would improve the early infant diagnosis process for testing infants for HIV in Kenya-an area virtually unknown to HP.
- Chose Kenya because HP already has an existing presence there and knowledge about that country (healthcare challenges)
- HP is a hardware supplier to the government of Kenya and private industry but was not sought out as an advisor or partner in developing technology services
- Therefore, HP needs to change its image and a new partner would help HP to enter the market and gain trust -> Partner: CHAI – Clinton Health Access Initiative, CHAI has already built close relationships with governments and international aid organizations who are working on health issues in Africa
- HP seeks a different type of engagement with CHAI -> instead of giving them money, HP offers technology, product development, employee engagement, expertise, skills (!!!)
What is social innovation?
- “by using a firm’s core competencies, solutions for important social problems (with the goal of serving the social needs) are worked out in cooperation/partnership with stakeholders such as social organizations”
- “projects that have true strategic importance for the company”
=> Companies can act in different ways in order to be socially responsible, but their social innovations are always linked to the firm’s core competencies and its ability to create innovations. Social innovations add value to the business and are solutions for social problems at the same time.
Business Opportunities through Social Innovation?
- Build future markets where the business can become an important player (HP in healthcare in Kenya)
- Valuable and unique market insights => develop ideas and products to serve those social needs => new revenue streams
- Positive media reception => increases brand recognition
- Foster creation of shared value for all stakeholders including the company itself
Link to CSR theory: HP in the pyramid of Caroll?
- Philanthropic Responsibilities: Yes, HP focuses on the health challenges in Kenya and wants to improve the health quality for the society by providing CHAI with technology, employment engagement, money, expertise and skills. HP wants to take an active part in being the solution instead of just donating money.
- Ethical Responsibilities: Yes
- Legal Responsibilities: Yes, they obey the law of Kenya as it is required.
- Economic Responsibility: Yes, they intend to be profitable with the project. Social innovations always add value to both, the company and all other stakeholders.
Link to CSR theory: what vision(s) fit to HP?
They fit to the Win-Win vision as they are doing well by doing good. They intend to solve an important social problem in Kenya. At the same time, they profit from the advantages of social innovation such as entering a new market and generating new revenue streams as well as getting valuable market insights and a good media reception. Overall, they add value for all stakeholders (CHAI, mothers, children, …) involved what, in turn, adds value for HP. Furthermore, they are taking a long-term position instead of being biased by short-termism. This vision fits to the principle of social innovation where both, company and all stakeholders profit.
Difference CSR and Social Innovation?
companies can act in different ways in order to be socially responsible, but their social innovations are always linked to the firm’s core competencies and its ability to create innovations. Thus, social innovations are more involved in business processes than CSR. Also, Social Innovation requires partnerships with external stakeholders.
