Defining Korea through others

Just came across this Joongang Ilbo’s editorial.  Although I disagree with the blind patriotism of Irish people remark – I think we have come a long way from that – it’s a comparison I’ve seen drawn before (or being told before by Koreans I meet!). 

However, with all the other comparisons to how Korea resembles many other nations around the world, I couldn’t help wondering why Korea always seems to do this?  It’s something I’ve noticed time and time again, and it’s something I see applied in businesses as well: looking to others for inspiration when what they have themselves is quite inspiring…!

I know for sure people in Ireland don’t sit around defining themselves through others.  It’s much easier a nation or a business to define itself through contrasts and similarities.   It’s a lot harder to stand up and say why you’re different.

Just a bugbear…

Or is the article a brilliant work of art pointing to how Ireland “shattered the framework of self-confiing perceptions!”

Cost Positive

To return value to shareholders, companies should implement socially responsible activites that are cost positive, or cost neutral at worst.  This applies to any Government too.

While infuriated by the predictability of the general election debate back home in Ireland, I received a little cornflake of pride from the BBC’s endorsement of the Irish economy (and in turn a direct experience of how foreign news sources carry more credibility, as is overwhelmingly the case in Korea).  Whether the good times led to good initiatives or whether it’s good people who make good decisions, the article refers to the success and initaitive of the Irish Government’s smoking ban and plastic bag tax.  Both are net positives from a long term perspective, both finanically but also in terms of the nation’s health and environment, respectively.

From my former work helping Repak, I came across statistics which show that as low as 16% (if my memory serves me correctly) of people will do ‘what’s right’ for the environment without a financial incentive.  Throw in some cash and make it worth their while to be good and that figure shoots up.

This necessary ‘critical-mass’ incentive is no different for companies debating CSR policies than other Governments debating a rehash of Ireland’s rather lucrative plastic bag levy (ringfenced for environmental funding).

About time – Korean socially responsible fund

Today’s Korea Herald covered an announcement by Korea Development Bank entitled, “KDB to fund socially responsible firms.”

I think this is a positive move by the state-run bank, and much needed.  It is the first time a Korean organization has introduced the concept of socially responsible finance, according to the KDB.  It helps extend the definition of ‘CSR’ beyond the Korean-market conception of mere philantropy and cause marketing.  The fund will invest or provide loans to companies undertaking the following four criteria, of which 275 Korean companies have been identified:

• Social Welfare projects
• Energy Saving projects
• Recognized for good labour-management relations
• Employing physically or mentally challenged people

However, I’d argue that it’s about time.  It’s been long shown that socially responsible companies outperform sustainability laggards by as much as 23%.  Companies that embrace CSR stakeholder activities are more attractive to invest in.  Being ‘good’ does benefit the bottom line!

I think this could be a good catalyst for Korea and help focus C-Suite execs to think about the issue more and the obvious benefits.

It’s only 4 billion people

  To complete a week of posting on CSR, I thought I’d post a couple of links on Nokia’s recent activities in India.  Is this an example of companies adhering to the ideals of the classic article on multi-national companies building opportunities from the bottom of the pyramid, that tiny 4 billion of the world with an annual income less than US$1,500.  

It’s a scary prospect for any company to think of as Prahalad and Hart put it, “Doing business with the world’s 4 billion poorest people – two-thirds of the world’s population – will require radical innovations in technology and business models. It will require MNCs to reevaluate price-performance relationships for products and services. It will demand a new level of capital efficiency and new ways of measuring financial success. Companies will be forced to transform their understanding of scale, from a bigger is better ideal to an ideal of highly distributed small-scale operations married to world-scale capabilities.”

Here’s what BusinessWeek say this week about Nokia’s attempt to grow customers amongst the “aspiring poor” of India and Kenya.

In Public Relations we talk alot about ‘channels’ – what’s the best way to reach and communicate your message with your target audience.  Considering that most of this bottom tier of the pyramid live in rural villages, or urban slums and shantytowns,  and make up 40 to 60 percent of all economic activity in developing countries, I think inclusive capitalism (or tenants of social capitalism, although I confess not to be completely versed on the implications of this theory) is something for MNCs to seriously consider and, following that, the PR industry.

As you know, I dislike the often misleading take on terms like PR 2.0.   
Communications, undoubtedely is evolving, though.  I’m wondering whether Nokia’s innovations will be followed by more companies who take Prahalad and Hart’s argument seriously.  Call it what you like (hopefully not Globalization 2.0, good god, and maybe something along the lines of the “invisible opportunities of Globalization”) but signs are that companies need responsible communication solutions to open real dialogue with this way too long overlooked 4 billion of the world’s population.

Couple of CSR reads

Here’s some news from Australia and a good citizenship case study I’ve came across over the last few days.   They both illustrate how good CSR and Citizenship initiatives start in the boardroom and are reflected throughout the operations of a company.

Oldboy!

I’m sure when I woke up on Saturday morning I had entered into some strange new world where Korean cinema had taken over reality.   My Korean is limited, so I couldn’t quite make out the story, but I had a hunch from the images of the Hanwha Group chairman, interrogation rooms, police chief from Namdaemun and lots of images from a Korean nite club.  I was startled by the hype itself; the news broadcast must have had at least 6 separate but related items.

According to the Korea Herald (latest news) on Tuesday, “the case allegedly involves [Kim Seung-youn, chairman of Korea's 12th largest conglomerate (chaebol)] and a team of his bodyguards kidnapping and physically assaulting employees of a bar in Seoul on behalf of his 22-year-old son.”  His son reportedly suffered facial injuries that required 11 stitches following a fight with the bar employees.

Analysts from Meritz Securities Co. are saying that the impact is only short term.  However, the incident makes fun of the group’s grand vision for 2007 where the chairman Kim promised that the company “will become the greatest brand of all mankind that improves humanity and the value of life.”  Hmmm.

Keynes once wrote, “Capitalism is the astounding belief that the most wickedest of men will do the most wickedest of things for the greatest good of everyone.”  I think Keynes was exaggerating, but I don’t think, if these allegations are founded, that this would apply to even this most extreme situation.

Putting the incident to the side, Hanwha’s ambitions are unquestioned.  However, can Hanwha deliver on its audacious promise, even whitewashing this recent incident?  Should companies make promises it can’t keep? 

I think we all know the answer to this.

Corporate Social Responsibility (CSR) is a term that is thrown about flippantly.  It is neither philanthropy, volunteerism or ’cause marketing’.  Simply, it’s about businesses doing the right thing within the context of the society in which it operates and provides goods and services.  CSR is achieving commercial success in ways that honor ethical values and respect people, communities and the natural environment.  What’s changing now is that global companies, and ambitious Korean companies, need to adhere to global standards.

To say the least I’m skeptical that Hanwha will achieve its corporate vision as it looks to become a global company.  CSR visions, which I believe the Hanwha statement to be, should not be throw-away-catch-phrases that earn short term admiration and perhaps marginal brand equity.  CSR is a way of doing business and is more about what a company does from between 9 to 5 and how it treats its employees than slogans, donations or other such activities. At its core is reputation management – the stakeholder perception of how a company runs its business.  When a company treats its employees well, there are fewer supply chain or customer disruptions.  Robust environmental management practices result in reduced energy inputs, more efficient production systems, and less waste to manage.

I think Korean companies need to think more carefully when it comes to CSR and growing their reputation in a global context.