What is the difference between a strategy and a tactic?
When looking at strategy and tactic it can sometimes be used interchangeably when actually they have different roles and functions. The purpose of strategy is to identify clear broader goals that advance the overall organization and organize resources. The purpose of tactic is to utilize specific resources to achieve sub-goals that support the defined mission ().
How is the concept of corporate sustainability, as described in the article, connected to the company’s strategy?
What are two ways a leader can convey the company strategy to internal stakeholders?
The timing is certainly ripe for it. “A road map to help companies integrate social and environmental issues into business strategy, using shareholder dialogue as a means of corporate learning about stakeholder concerns” is being proposed by Cornerstone Capital Group, (CCG) a predominantly female-owned firm. Founded by Erika Karp in 2013, its mission is to help to move capital towards sustainable businesses.
First speaking to this journalist for FORBES in 2013, Ms Karp used the term “corporate sustainability” interchangeably with “corporate excellence.”
Her view that sustainability should be core to a business and not stuck in a corner was beginning then to resonate with investors. When John Wilson moved to CCG from TIAA-CREF – the largest private pension system in the U.S. with direct responsibility for engagement with over 8,000 portfolio companies – it was a step towards finding a basis for shareholder engagement as a tool for reform.
CCG has just launched two new tools that it says will help companies make the business case for improved stakeholder relations through shareholder engagement. The first is the “Shareholder Alignment Frontier,” a method for identifying public issues that are relevant for corporate performance through ongoing dialogue between management and long-term shareholders.
Just as Ford Motor Company was the archetypal 20th century company, Apple today is the embodiment of the 21st century company. It is the quintessential networked corporation, whose value proposition lies not in physical assets, particular products or even specific skills, but in the quality of its relationships.
Companies today, it says, should be considered “networks” – ones which create value not solely through individual effort, but rather through the interactions of network members — their stakeholders. Understanding how stakeholder interaction influences company financial and operating performance “can yield important strategic insights for companies and investors.”
The market is inefficient in doing this, it argues – “it fails to fully capture the dynamics of the long- term, informal relationship between a company and its stakeholders, which can have significant financial implications.”
The second tool on offer is a matrix which proposes a generalized business case for addressing social and environmental issues. CCG says it has identified six discrete business drivers affected by non-financial stakeholder relationships. Here, it considers how relationships with supply, demand and contextual stakeholders individually may affect each of the six business drivers, positively or negatively.
Key Stakeholder Relationships
The company says it hopes that these will prove to be effective consultancy tools going forward for both corporations and investors intent on a more collaborative approach, involving all segments of the capital markets.
As head of Corporate Governance, Engagement & Research at CCG., John Wilson has almost 20 years in socially responsible investing and corporate governance. Before joining TIAA-CREF in early 2008, he served as Director of Socially Responsible Investing for Christian Brothers Investment Services, an investment adviser to Catholic institutions.
There, he led the company’s shareholder advocacy, social screening, and proxy voting functions as well as participating in the company’s outreach to religious communities around the United States. “I have been distilling the experience of what these conversations have to do with corporate drivers,” he tells me. Or, in other words, as he puts it: “When it comes to something like climate change: how do you get people to do the right thing?”
A key step forward may lie in understanding exactly where the issues lie in a life cycle for the business: are they ‘non-financial’ in that they require monitoring but not much action, “pre-financial,” “transitional” or “financial?” It is the “transitional” issues – the ones that come along at a time of considerable change – that can also provide great opportunity for those businesses quick to act and be ahead of the curve, says the report.
