Vol 4 Issue 2 2013
Can Business be a Force for Good? An Admirable Company How the Admiral Group built its success on strong community values ‘Co-operation is in our DNA’ The Past, Present and Future of Social Enterprise in Wales
The CSR Conundrum Is corporate social responsibility an oxymoron?
Swansea Business School Ysgol Fusnes Abertawe
En T te he rp S ri o se ci Is al su e
Marketing ‘Good’ Behaviour Can marketing techniques really change our negative behaviours?
inside 3 Editorial:
winter/spring 2013 Volume 4 Issue 2
10
4 The Big Interview:
12
14
If you require this document in an alternative format (e.g. Welsh, large print or text file for use with a text reader), please email swbr@smu.ac.uk
Think Piece: MARKETING ‘GOOD’ BEHAVIOUR Can the latest social marketing techniques really change our self-destructive behaviours?
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News and Events Books: ‘WE DEPEND ON TECHNOLOGY WHICH WE DO NOT UNDERSTAND’ Steve Griffiths reviews John Naughton’s ‘What You Really Need to Know about the Internet.’
Industry Profile: AN ADMIRABLE COMPANY How the Admiral Group built its success on strong community values.
16 Alternative formats
10 Minute Guide: THE SOCIAL ENTERPRISE ECONOMY Facts and figures on the impact of social enterprise on our economy.
7 Business Profiles: SOCIAL ENTERPRISE SHOWCASE We showcase award-winning social enterprises who are showing that business and society can work together for the greater good...
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CULTURE, COMMERCE AND COMMUNITY How collaborations between business, the arts and community groups can revitalise our city centres.
BUSINESS ANGELS Can Business be a Force for Good?
CO-OPERATION IS IN THE WELSH DNA We interview Derek Walker, CEO of the Wales Co-operative Centre.
Point of View:
24
Opinion: THE CSR CONUNDRUM Is corporate social responsibility an oxymoron in twenty-first century businesses?
Next Issue: FROM WALES TO THE WORLD Can Welsh Businesses Compete in an Globalised Economy?
Fformatau eraill Os hoffech y ddogfen hon mewn fformat arall (e.e. Cymraeg, print mawr neu ffeil tesun i’w ddefnyddio gyda darllenydd tesun), anfonwch e-bost i swbr@smu.ac.uk ISSN 2049-5544 Disclaimer: The articles in this publication represent the views of the authors, not those of Swansea Metropolitan. The University does not accept responsibility for the contents of articles by individual authors. Please contact the editor if you have further queries. Ymwadiad: Mae’r erthyglau yn y cyhoeddiad hwn yn cynrychioli barn yr awduron, nid rhai Metropolitan Abertawe. Nid yw’r Brifysgol yn derbyn cyfrifoldeb am gynnwys erthyglau awduron unigol. Cysylltwch â’r golygydd os oes gennych gwestiynau pellach. Registered Charity Number / Rhif Elusen Gofrestredig 1139800 © Swansea Metropolitan Metropolitan Abertawe 2013. All rights reserved/ cedwir pob hawl. Images: Front cover and this page: ©iStockphoto.com/benignocomage:
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CONTACT US / CYSYLLTWCH Â NI Web/ Gwefan: Email/ E-bost: Twitter: Post:
www.smu.ac.uk/swbr swbr@smu.ac.uk @SWBusReview Lucy Griffiths South Wales Business Review Swansea Business School Powell Street Swansea SA1 1NE
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PRODUCTION TEAM Editor: Lucy Griffiths Editorial Board: Kathryn Flynn Samantha Morgan Christopher Thomas
Editorial: Business Angels Can Business Be a Force for Good?
Design & Print: Swansea Met Print Unit One Welsh company that puts social responsibility at the very heart of their business strategy is Admiral Insurance, winners of multiple awards for their community work and for their positive approach to making work enjoyable for their thousands of employees. They share the secrets of their success with us on pages 14 and 15.
Selected Contributors: Steve Griffiths
With a background in Economics and a strong interest in Business Ethics, Steve Griffiths has taught at Swansea Business School for many years, and is currently Assistant Dean, Faculty of Business and Management and Head of the Centre for International Development where he is responsible for international partnerships and the internationalisation agenda within the Faculty.
Richard Dunstan
Richard Dunstan is a senior lecturer in accounting in the Faculty of Business and Management at Swansea Metropolitan. He is a Chartered Accountant and his teaching specialisms include corporate reporting, auditing and corporate governance, accounting software and business law.
Garan Pieniazek
Garan, an MBA graduate from Swansea Met, has worked his way up through the company to become Outbound Sales Director for Admiral, one of the UK’s largest Insurance providers and one of the most successful companies in Wales.
Lucy Griffiths Editor When we talk about business, we often focus on its relationship to money and particularly ‘profit-making’, and, in a world where profit is the key objective of many businesses, this is hardly surprising. Profit, however, is a word that can have multiple meanings. It doesn’t have to be about just financial gain. Some businesses create profits for society as well as their shareholders, but these social profits are sometimes far more difficult to identify, measure and evaluate than a simple financial calculation. In this issue of the South Wales Business Review we’ll be exploring the issues surrounding the relationship between business and society, and asking whether it is truly possible to balance social and financial goals within commercial enterprises. Steve Griffiths of Swansea Business School, an expert in the field of business ethics, gives us his thoughts on whether ‘Corporate Social Responsibility’ is a term that still has value, or whether it is, in fact, an oxymoron in a 21st century society on pages 16 and 17.
Richard Dunstan looks at how city centre regeneration schemes are bringing together diverse groups of partner organisations to create a balance of community and commercial offerings on pages 10 and 11 and our big interview this quarter is with Derek Walker, Chief Executive of the Wales Co-operative Centre, the Welsh Government funded organisation that aims to promote, develop and support co-operative and socially driven business models here in Wales. He explains why social enterprise is so important to us on pages 4 and 5. We’ve also got profiles of some inspiring social enterprises from South Wales on pages 7 to 9, showing just how diverse a range of possibilities there are to create businesses with social purpose, along with our regular 10 minute guide (p12 and 13), news, events and book reviews. I hope you enjoy reading this issue, and are inspired to consider the impact your business has, or could have, on our society…
Lucy
PS. If you’d like to subscribe to receive a regular copy by post or view earlier editions of the SWBR online visit www.smu.ac.uk/swbr.
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│SOUTH WALES BUSINESS REVIEW
The Big Interview: ‘Co-operation is in the Welsh DNA’ We interview Derek Walker, Chief Executive of the Wales Co-operative Centre, on the role co-operative organisations play in the Welsh economy.
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‘The challenge for social enterprises and co-operatives in the future will be how to engage with stakeholders effectively in the digital age’ SWBR Wales has a long history of co-operative approaches to business, what impact do you think this has had on our economic and social development as a nation? DW The history of co-operation and the Co-operative Movement in Wales has had a huge effect on the social and economic development of our nation. You could say it’s part of our DNA right back to Robert Owen in Newtown, the people of Wales seem to understand that we can solve our problems more effectively by working together in co-operation. This can be evidenced by major co-operative milestones in our history such as the development of The Tredegar Medical Aid Society, numerous miners’ institutes across the coalfield areas and the miners buying out of their colliery at Tower in the mid 1990s. This continues today. One example is the way in which people are turning to co-operative models to re-open community shops and pubs.
SWBR How does Wales compare to other European nations in terms of its engagement with social enterprise? DW It is difficult to make a comparison as each European country has a different history, economic environment and legislative framework. My perception is that Wales compares well in terms of the sector’s health and diversity. There is a positive environment created by Government and good quality support available to help the sector grow. Having said this, there is plenty for us to learn from across Europe. For instance we can learn from the scale achieved by the Mondragon Corporation in the Basque country as well as the way in which the businesses invest in research and development. Mondragon is a federation of over 120 co-operative businesses, employing more than eighty thousand people with a turnover of 14 billion euros. There are circumstances unique to Mondragon that cannot be replicated here, but nonetheless a lot for us to learn too.
SWBR What role do you see for social enterprises in the 21st century Welsh economy? DW Most definitely there is a role for social enterprises within the modern Welsh economy. With the development of modern technology the market place changes very quickly and businesses need to constantly reassess the needs of their customers. Within social enterprise customers are often members of the business and can influence the design of the product or service even before it gets to market. The challenge for social enterprises and co-operatives in the future will be how to engage with stakeholders effectively in the digital age, to be able to consult with stakeholders and innovate the business at a pace the market demands. Social enterprises and co-operatives often work within private sector market places and make a large contribution to sustaining and growing the economy of Wales. Co-operatives and mutuals alone account for £1bn in the Welsh economy. Vol 4 Issue 2 2012 │ 5
│SOUTH WALES BUSINESS REVIEW In an era when the social, economic and environmental sustainability of businesses is under constant scrutiny, these approaches have a lot to offer the economy. Social enterprises are enterprises with a socially driven aim rather than a purely profit driven aim, but they are very much enterprises. Social entrepreneurs are often extremely astute business people.
..and in terms of tackling social issues? DW Social enterprises are ideally placed to address social issues. Social enterprises engage with people within our communities and its these people that understand what the important social issues of the day are. A modern example of this is the credit union movement in Wales. Credit Unions have been set up all over Wales by people who understand the devastating effects of poverty and the importance of educating people on how to manage their finances. The Wales Co-operative Centre runs a financial inclusion project to support and raise awareness of credit unions as a means of supporting financially excluded households to manage their money. Issues like this will become increasingly important as changes to welfare are rolled out in the years ahead.
SWBR What are the benefits of socially driven business models over purely commercial or public sector approaches? DW Good social enterprises empower their stakeholders to have a say in how the product or the service is delivered, as well as empowering people it also makes the business very responsive. Social enterprises like any other business have to make a profit but they do not distribute their profits to shareholders. This means that this money can be used to invest in the business, expand into new areas or to be used for the good of the community. Also social enterprises often have a competitive advantage over more commercial businesses that are purely driven by profit maximisation for shareholders. Modern consumers are likely to want to trade with businesses that seem to trade in a fair and ethical way. This is evidenced by the growth of the Fair Trade movement over the last ten years as well as the consumer reaction to businesses who are not paying their fair amount of corporation tax.
SWBR How is the Welsh Government supporting social enterprise in Wales? DW The Welsh Government is supporting social enterprises and cooperatives in a number of ways. There is a Social Enterprise Strategy and Action Plan for Wales. Welsh Government has provided match funding for European projects that offer business support services to social
enterprises and co-operatives across Wales – several of these projects are led by the Wales Co-operative Centre. Welsh Government also provides capital grants to social enterprises across Wales via the Community Facilities and Activities Programme. Recently the Minister for Business Enterprise Technology and Science, Edwina Hart AM, launched the Welsh Co-operatives and Mutuals Commission for Wales. It is being chaired by Professor Andrew Davies. The Commission will set out a vision for the co-operative and mutual economy in Wales and report back to the Minister in September 2013.
SWBR How can individuals and businesses in Wales engage with this agenda? DW We would encourage individuals to become members of a local social enterprise and co-operative businesses in their area, or maybe even join with others to set one up if there is a market opportunity and a social need. We would encourage existing businesses to look at trading with co-operatives and social enterprise but also consider setting up a co-operative consortium to improve their own business performance. Many private businesses across Wales are considering coming together to set up co-operative consortia to look at things like joint purchasing, joint marketing and to improve their chance of winning larger contracts. Images: Wales Co-operative Centre and ©iStockphoto.com/Lonely_
The Wales Co-operative Centre runs the Social Enterprise Support Project and the Business Succession and Consortia Project. Both projects provide support to social enterprises and co-operatives within Wales, for example helping with business plans, financial projections and marketing. Further information can be found at www.walescooperative.org 6 │ Vol 4 Issue 2 2013
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Social Enterprise Showcase
We showcase award-winning social enterprises who are showing that business and society can work together for the greater good… Organised KAOS began as a small unincorporated community group in direct response to a developing ASBO culture within the Amman Valley of Neath Port Talbot.
Organised Kaos Youth Circus Fact File
KAOS stands for Keeping Adolescents Off the Streets and has succeeded in providing an art form that not only engages young people but also cultivates optimism and broadens horizons; inspiring young people to step beyond self limiting beliefs. Embracing the concept of social circus, Organised KAOS provides a voice for young people which echoes through the community to ignite pride in both people and place.
Company Name
Organised Kaos Youth Circus Ltd.
What They Do
Youth and community circus creating bespoke events on a commercial basis and providing circus activities for young people.
Founder
They aim to incorporate the performance quality and standards of Cirque du Soleil with the community engagement and social mission of a genuine social enterprise.
Nicola Hemsley
Started Trading 2010
Location
As a social enterprise Organised Kaos have expanded their focus to not only provide youth engagement and training, but to also inject new life, optimism and ambition into the wider community.
Gwaun Cae Gurwen, Upper Amman Valley
Web site
www.organisedkaos.org.uk
Using performance arts as a catalyst for change, Circus is the vehicle that simultaneously communicates powerful messages whilst also offering activities that develop skills, attitudes, motivation and confidence within individual people.
“Using performance arts as a catalyst for change”
The borough of Neath and Port Talbot has the lowest level of Arts participation in Wales, yet the company continues to be one of the largest Youth Circuses in the UK! They pride themselves on having created a fun family to be part of, somewhere to go, and people who are supportive and genuinely interested in each others’ well being and professional development.
“Not all business advisors understand social enterprises.”
Top Tips for Start-ups
Take the leap; it won’t be long before you start swimming.
Not all business advisors understand social enterprises. Always look for Profit. Trust your instincts, and do not give your services for free.
Images: Organised Kaos
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│SOUTH WALES BUSINESS REVIEW
The Swansea Foundation
Fact File Company Name
The Swansea Foundation
What They Do
Swansea Foundation works with entrepreneurs and their managers to help them develop businesses with high social impact.
Founders
Rhidian Morgan and Ian Rees
Started Trading 2008
Location
Morfa Road, Swansea. Working across Wales and beyond.
Web site
www.theswanseafoundation.co.uk
The Swansea Foundation began as part of the City and County of Swansea’s 2020 vision to create a vibrant entrepreneurial culture in the city and wider region. Working with progressive business people and by bringing talent together, The Swansea Foundation has become a focal point for exploring exciting and ambitious ideas for the creation of a new breed of social business. The Foundation’s values are founded in 3 core principles: Fun, Inspiration and Trust. They aim to create a safe environment where open mindedness, collaboration and exploration can thrive, and members come to Foundation events prepared to contribute and get involved.
leading players in the field of social enterprise to share state of the art thinking with its members. They focus on action learning techniques to ensure the full engagement of participants in their programmes. Learning and reflection are central to the Swansea Foundation experience but most importantly they ensure that these translate into practical action on the ground. Ian Rees, co-founder of the Foundation says ‘For the future, we would like to see the Swansea Foundation as the centre point of an expanding community of passionate business people building commercially sustainable business models for the benefit of society, locally and globally.’
The Swansea Foundation draws heavily on its contact with some of the world’s
“Our motto is ‘making money by doing good, doing good by making money’” 8 │ Vol 4 Issue 2 2013
Top Tips for Start-ups
Truly understand the reasons why you want to start your social business and why this is personally important to you. Be prepared to collaborate and share. Your idea is bigger than just you. Understand that you can’t do it all. Get others involved. Make sure you play to your strengths in what you do. Be prepared to adapt your idea. Have fun.
Images: Swansea Foundation
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We Are Lucky
Fact File Company Name
We Are Lucky Ltd
What They Do
Help individuals, organisations and communities make their own luck.
Founders
Christopher Thomas and Lucy Griffiths
Started Trading 2012
Location Founded as a way of promoting selfstarting approaches to life, We Are Lucky is a project set up by Swansea Met Lecturers Christopher Thomas (Faculty of Applied Design and Engineering) and Lucy Griffiths (Swansea Business School) to help tackle the social issues facing communities and individuals across South Wales and beyond. The idea that you can ‘make your own luck’ is at the heart of the project which aims to place individuals’ destiny in their own hands rather than allowing their environment or socio-economic situation to determine their life path. The enterprise aims to offer resources and practical advice and services to help people young and old to identify and create opportunities for themselves, whether through personal development, enterprise start-up or through identifying and building a career around their abilities and passions. The team have won an UnLtd Award to help get the project off the ground and are currently developing a range of resources and events to share through both online and offline channels.
The community work is funded by commercial service offerings such as practical design work and marketing support for other businesses and social enterprises, and the team are also developing a range of products aimed at developing self-starting characteristics in pre-school and primary aged children. They are planning to publish their first book in the spring and have a further two books in development.
“the project aims to place individuals’ destiny in their own hands rather than allowing their environment or socio-economic situation to determine their life path.”
Ystradgynlais
Web site
www.wearelucky.org
Top Tips for Start-ups Stay true to your values – identify them early on in the process and you’ll always be able to stay on track.
Be brave – life is short, if you don’t pursue your dreams now, when will you? Keep going – it’s ok to get things wrong as long as you learn from it and move on. Be human – people respond to real human beings – don’t to pretend to be something you’re not. Be happy – do what you love, love what you do, and make your own luck.
Images: We Are Lucky
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│SOUTH WALES BUSINESS REVIEW
Point Of View: Culture, Commerce and Community
How collaborations between business, the arts and community groups can revitalise our city centres. Richard Dunstan
Richard Dunstan, of Swansea Business School, explains how Swansea is regenerating its city centre by creating a culture of collaboration and community spirit.
At a time when every week seems to bring a new announcement of a failed high street retailer going into administration, it would be easy to think that the UK’s high streets, once the nucleus of our local social and economic communities, are in a state of irrevocable decline. Price-driven online retailers, low consumer confidence, job insecurity and high levels of personal debt have all affected demand, and many retailers who expanded rapidly during the boom times have found themselves struggling to cope with rising costs and falling demand in recent years. For some, inevitably, it has been simply too difficult to survive. However, there are some who are passionate about the value of the high street as a hub for business and community activity, and are fighting back. Swansea, in particular, is an example of this and plans for the urban regeneration of Swansea High Street are advancing rapidly. The bleak, desolate street which formed such an unattractive gateway to our town centre in recent times may look very different in the near future. On a nationwide scale, Mary Portas the self styled “Queen of Shops” was appointed by the government to make an independent review into the future of our high streets. 10 │ Vol 4 Issue 2 2013
Her vision of the new urban centres is of a space which would ‘include shops but could also include housing, offices, sport, schools or other social, commercial and cultural enterprises and meeting places. They should become places where we go to engage with other people in our communities, where shopping is just one small part of a rich mix of activities’ (Portas, 2011). This vision embraces the fundamental ethos of corporate social responsibility (CSR) and urban regeneration in the current economic climate is an area where these key principles can be embraced and businesses can become socially interactive with the local community. This type of socially responsible urban regeneration has been proceeding at a rapid rate on Swansea High Street in recent months. The train station received a £7.6million facelift which opened in June 2012 and received a £900,000 grant from the Swansea Regeneration Area for its Urban Village regeneration programme. It aims to transform the street, and also to encourage the use of Kings Lane as a pedestrian route between High Street and the Parc Tawe site. The aim of the project encompasses the ethos of socially responsible business in that the mixed use scheme is not solely a
space used by business enterprises but it also includes residential space, community resources and a childcare facility. Many town centres now appear “identikit” versions of each other, caused by a proliferation of chain bars, restaurants, coffee shops and retail outlets. The aim of this project is to make the high street more of a community based urban space encouraging entrepreneurs and unique independent businesses into the area. This embracing of the ethos of corporate social responsibility and the creation of key partnerships between private industry, public sector bodies and the local community should lead to a more sustainable urban regeneration project. Other socially responsible businesses have also recently sprung up in the area surrounding the High Street. Tapestri Cafe Bar, for example, situated off Alexandra Road in the old Swansea Police Station is ‘run as a social enterprise in order to support people needing an extra chance to learn skills and gain the experiences needed to follow a career path in catering’ (Tapestri, 2013). The interaction with the local community is evidenced in the fact that the regeneration project has already proved an invaluable learning resource for University of Wales Trinity St David
ADOLYGIAD BUSNES DE CYMRU│ Swansea Metropolitan students from the HNC/D Building Studies and BSc (Hons) Project and Construction Management courses who were given a practical insight into the £8 million land regeneration scheme. Programme Director, Mike Cullis explained: “We are reliant on organisations like Coastal Housing Group to support our academic courses - the benefit to students is phenomenal. It’s a vital learning tool and we hope that the relationship will continue to grow as Coastal increases its development plans across the area.” Central to the urban village project is the Swansea Creative Hub which exists as a focus to bring creative individuals, businesses and organisations into the area. This development will be the first office block in Wales to be created specifically for commercial creative businesses. It is aimed to create a cutting edge community environment in which to work, socialise and shop.
“Swansea can be its own worst enemy by playing its quirks and eccentricities as weaknesses and feeling sorry for itself. Because something has been downbeat for a few years, the lazy suggestion is that it will stay that way. We believe that by challenging that perception and encouraging a fresh eye to the street that a change will come.” He also adds that “business has been excellent, outstanding in fact and far better than we could have imagined. We reached number 1 of 271 eateries on Trip Advisor in only 10 weeks. This proves the fact that product increases footfall which so enhances location.”
Volcano Theatre – produces original theatre productions. Swansea Music, Art and Dance – provide rehearsal space and a recording studio, for professional sound and video production. Supersaurus – an art collective.
The Forge Artists – installation artists, Jonathan Green and Jonathan Anderson (a Swansea Metropolitan alumnus) are based in nearby studios. Elysium Gallery – artists’ studios and galleries. Indycube – offers business workspace from early stage startups to established freelancing agents. (Swansea Creative Hub, 2013)
Images: Richard Dunstan
A key partner of the Hub is the Mosaic Café Bar, a stylish and upmarket café bar and restaurant. After several years of successful trading in Carmarthen and St. Clears, Andrew John and Brennan Street opened Mosaic in September 2012 as the flagship of the Urban Village. Their space offers quirky design, a welcoming atmosphere and exciting, varied and affordable food. Brennan Street feels that
Another recent change in the High Street has been the move in January 2013 of the Business School of the newly united University of Wales Trinity St David Swansea Metropolitan to the totally refurbished former land registry building near the railway station. The increased footfall that will result from hundreds of University students being in the area should lead to increased opportunities for local businesses. A hall of residence for Swansea Metropolitan students is also planned for a location within easy walking distance of the High Street area which should further benefit the local business community. Steve Griffiths, Assistant Dean of the Faculty of Business and Management explains that “While we might have looked at a cheap, out of town new campus for Swansea Business School, the University wishes to support Swansea city centre and the local community and be part of its regeneration. Putting older buildings to new use is more socially responsible and enhances the aesthetics of living or working in the city.”
Current partners of the Hub include:
“The Hub was also responsible for Wales’ first ever pop up theatre which hosted two very successful runs of Mal Pope’s Cappuccino Girls musical,” explains Huw Williams, Swansea Creative Hub’s Project Director.
“Art Across the City” project. The vacant building opposite the Kings Arms Tavern now has a mural inspired by the city’s long history in the production of stained glass, whilst a mural depicting three dancing ladies sits next to the Blacks clothing store, a reference to the High Street’s history as an area of thriving dance halls, bars, cinemas and theatres.
The first retail occupier at the Urban Village, a vintage homeware and accessories store selling furniture and kitchen products, Vintage Shop, will open shortly. A bakery is also coming to the Urban Village as is a children's hairdresser. Unused areas of the High Street have also recently been brightened up with large murals created by local artists commissioned by LOCWS International’s
Returning to Portas’ wish to ‘put the heart back into the centre of our High Streets, re-imagined as destinations for socialising, culture, health, wellbeing, creativity and learning’ (Portas, 2011), we can see that with the wide variety of educational, creative, social and business establishments moving to Swansea High Street, a very different gateway to the city may exist in the near future. However, with two out of the three beautiful Grade 2 listed buildings on the High Street (the Palace Theatre, the old Bush Hotel and the Kings Arms Public House) currently out of use and in a state of dereliction and disrepair, it will be a great shame if these were not able to be included in the regeneration project and restored to their former glory and made use of by 21st century businesses. It seems there is hope for our high streets, but it needs support from across the public, private and third sectors to truly regenerate them into vibrant 21st century spaces for our communities. Vol 4 Issue 2 2013 │11
Prof itable
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│SOUTH WALES BUSINESS REVIEW
Industry Profile: An Admirable Company… How the Admiral Group built its success on strong community values Garan Pieniazek
Garan Pieniazek, Outbound Sales Director at Admiral, explains how the company has built a community-centred corporate culture.
Fact File Company Name Admiral Group
Founded 1993
Offices
Cardiff, Newport, Swansea
Employees > 5,000
Web site
www.admiral.com Admiral Group launched in 1993 with no customers and 57 members of staff, nearly twenty years on, they have grown to be one of the most familiar names in the UK insurance industry with a turnover of £1.5bn, over 3 million customers and more than 5,000 members of staff. Based in South Wales (with offices in Cardiff, Swansea and Newport), the company is not only proud of its Welsh heritage, but believes that contributing to the economy and society of Wales is an important part of their company culture. 14 │ Vol 4 Issue 2 2013
The Admiral Way The culture at Admiral rests on four key pillars: communication, equality, reward and fun. Admiral’s goal is to make sure all these work together to create an environment where people look forward to coming to work and the company believes this means they give that little bit extra when they are there. When a new member of staff joins the team they are given a piece of a jigsaw puzzle by the CEO – symbolising their role within the ‘bigger picture’ of the company. This sense of belonging, along with the belief that ‘people who like what they do, do it better’ creates a culture of trust and loyalty that is a key business strength for the company.
How Admiral Creates a Socially Responsible Culture Making Work Fun One of the ways Admiral implements this is through their Ministry of Fun (MOF). This initiative plays an important role in acting as a focus for events and activities designed to make working life at Admiral an enjoyable experience. It was introduced to organise fun events for everyone in the company and Each month the MOF moves to a different
“The culture at Admiral rests on four key pillars: communication, equality, reward and fun.” department, whose responsibility it is to organise fun events for everyone in the company, ensuring that ideas remain fresh and that there’s some healthy competition amongst departments. Some events require resource input from managers, but some of the most popular events, such as pumpkin carving or Curly Wurly eating competitions, cost very little, but create a big impact. The Ministry of Fun plays a role in improving day to day morale, but it also means that through the development of a relationship of trust, people are more likely to pull together when times are tough. Communication is Crucial Admiral’s leadership team believe strongly in regular, rapid and inclusive communications. They actively seek out feedback and suggestions from staff and increase communication through difficult times so everyone feels involved in the decision-making and strategic direction. This means more than just a staff newsletter or a regular email – at Admiral it means walking around the offices and really listening to what team members have to say.
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Making Work Rewarding As well as salaries and incentives, the Admiral Group offers its staff a range of additional benefits, including an allocation of shares twice a year depending on the company’s performance. This feeling of ownership builds on the loyalty developed through other activities such as the Ministry of Fun. However, they augment these financial benefits with a programme of added extras to promote the health and wellbeing of staff. These include free fruit every day, gym memberships, head massages and a cycle to work scheme. These benefits are seen to benefit the company (by reducing sick leave), the employee (health and happiness) and society (reduced burden on the NHS) – an example of the ‘Triple Bottom Line’ approach to business.
and distribution in recent decades. Creating insurance products that meet the needs of twenty-first century consumers, and developing marketing and purchasing channels that are truly customer friendly in a highly competitive marketplace has meant that Admiral has to innovate to stay ahead of its competitors. Innovation needs ideas, and ideas need people – so Admiral’s investment in developing and communicating with its people is crucial to the continued flow of innovative products that they need to succeed.
Giving Back to Wales Being the only FTSE 100 Company based in Wales Admiral takes its social responsibility seriously. The company’s ‘Community Chest’ scheme means that any member of staff affiliated with a charity, sports team or local organisation can apply for money to help their organisation. The business also sponsors many events across South Wales, including the Admiral Cardiff Big Weekend, Swansea bay 10K and both open air ice rinks in Cardiff and Swansea, ensuring that these events can continue to take place in our communities.
Image: ©iStockphoto.com/blackred
Environment and Sustainability Admiral runs a range of schemes to limit its impact on the environment. Recycling schemes, car share schemes, and a Bike to Work scheme (where the company will subsidise the purchase of a new bike for staff looking to use it to travel to work) are already embedded in the company’s operations, but when, in 2014, they move to new headquarters in Cardiff, the company’s ability to limit its impact will be further enhanced as plans include electricity generating photo-voltaic panels, rainwater harvesting, and the building itself will be built to a ‘BREEAM’ standard of excellent.
Innovation Insurance may not seem to be the most obvious industry in which to value or foster innovation, but in fact this sector has seen some of the most progressive approaches to new product development
“When a new member of staff joins the team they are given a piece of a jigsaw puzzle by the CEO – symbolising their role within the ‘bigger picture’ of the company.” Vol 4 Issue 2 2013 │15
│SOUTH WALES BUSINESS REVIEW
Opinion: The CSR Conundrum Is corporate social responsibility an oxymoron in twenty-first century businesses? Steve Griffiths
Steve Griffiths, Assistant Dean of the Faculty of Business and Management at Swansea Met, considers the paradoxes and contradictions that businesses face in assessing what it means to be ‘ethical’ in the twenty-first century.
Those who believe that business culture is all about ruthless competition, winning at all cost and destruction of any obstacles in the way of profitability, may conclude that social responsibility is irrelevant or even a threat to the real business of business. Others believe in organisational social responsibilities beyond those to owners, whereby a social contract obliges a wider consideration of the needs of society. While few would advocate the aggressive macho management style which would lead to validating the oxymoron, many believe that recent scandals in business, public service and voluntary sectors are evidence of the need for improved standards of behaviour. The two schools may be defined simply as: a. the narrow stockholder approach, associated with Milton Friedman, Frederick Von Hayek and free market economists states that business must maximise shareholder value, but remain within the law. b. the broad stakeholder approach, exemplified by R.E. Freeman, Peter Singer, Archie Carroll and most social enterprises, states that social responsibilities go beyond those of the narrow approach and that to become corporate citizens a wider range of societal interests must be served. Simply obeying the law is not enough to merit praise for a Corporate Social Responsibility (CSR) policy. 16 │ Vol 4 Issue 2 2013
There is often a debate about ethics and CSR’s relationship to the law and profitability.
The Legal Perspective In Henderson’s Matrix below, examples are taken from interviews with local entrepreneurs by Griffiths & Jawad (2012). Cells 1 and 4 seem easy to deal with, but cells 2 and 3 seem more controversial, posing the possibility of conflict between legal and ethical activities. However even the seemingly angelic activities in cell 1 may be challenged. Corporate philanthropy has been criticised as the motives and principles behind philanthropic policies could be self-serving, for example as a cheap way of gaining a good reputation or even exploitation of tax breaks.
Two factors which create challenges to the wider view are the importance of globalisation and the Internet. Both make it more difficult to define whose laws we should be obeying or whose culture should permeate the ethos of any organisation. The lack of jurisdiction of national governments and policing of the Internet, make it even more important that organisations become socially responsible and self-regulating. Governments will attempt to regulate, but there will also be pressure from campaigning stakeholder groups, community activists, trade unions, consumer pressure groups and others. All are learning to use the law and the Internet to make their influence felt on corporate governance systems. As many philosophers believe the adoption of CSR is more of a journey than a destination.
Ethical
Unethical
Legal
1. E.g. Charitable giving.
2. E.g. Purchasing, but never checking that suppliers produce ethically.
Illegal
3. E.g. Not employing someone because they expressed racist views.
4. E.g. Serving alcohol to underage drinkers in a pub.
Ethical–Legal interrelationships adapted from Henderson (1982)
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The Profit Perspective In the Enlightenment Matrix below (examples from the same study), again it would seem uncontroversial to review cells 1 and 4. Cells 2 and 3 are more challenging as it is clear that unethical policies can be profitable and that some good behaviours will only take place at extra cost.
The wider stakeholder approach maintains that society can demand wider responsibilities from businesses and other organisations. Without civil society organisations could not function, and if we as individuals honour our obligations to allow our society to function, so should corporations.
However, again the apparently straightforward examples do happen in real cases, where policy is corrupted by laziness, ignorance or prejudice. Instinctively we would expect organisations to act positively in cell 1 and avoid cell 4. Those who campaign for ethical or sustainable development often try to reassign ethical but unprofitable cases to cell 1, by identifying long term value to consumers and shareholders.
The details of what widespread CSR might look like are more difficult to specify, however. They may have to evolve and change with circumstances, but organisations that have not engaged in a CSR discussion or, over time, not adopted strategies for social and sustainable action, will be rightly criticised and called to account.
Organisations seeking to develop effective CSR will usefully generate debates internally and externally, to review possible policy implications or actions, as debate and discussion can be an important part of the solution. On the conservative, narrow CSR side, the very meaning of social responsibility is often denied.
CSR is unavoidable, even for cynics. We should beware of false prophets and easy solutions, but engage in dialogue with those with whom we must interact in order to achieve our organisational, private and social goals. Please contact swbr@smu.ac.uk for full details of sources cited in this article. Image: ©iStockphoto.com/benignocoma
As Greenfield (2004) says ‘...we can’t agree on what it (CSR) is, we can’t measure it even if we could and it would not stop bad behaviours like those at Enron or World.com, even if we adopted CSR policies’. Sternberg (2000) agrees, believing that the crucial factor is to encourage more shareholder or owner activism, to monitor senior management, clarify organisational missions and enforce the law.
Ethical
Unethical
Profitable
1. Investing in energy saving equipment.
2. Parking an ice cream/candy van outside schools at start and finishing times.
Unprofitable
3. Retaining the employment of loyal staff even when business slows down.
4. Closing down the business when the weather is good to go surfing, leaving customers without the service.
The ‘Enlightenment Matrix’ adapted from Cannon (1996)
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Think Piece: Marketing ‘Good’ Behaviour Can the latest social marketing techniques really change our self-destructive behaviours?
Lucy Griffiths For as long as traders have used marketing messages to sell their goods, kings, leaders, politicians, and governments have also employed the tools and techniques used by marketers to encourage the populace to believe in certain ideologies, or behave in certain ways. Wartime propaganda shows us how effective this can be in informing and encouraging specific behaviours, but also how dangerous it can be in promoting extremism through the presentation of an uncontested viewpoint towards which people may naturally gravitate, similar to the concept that in social psychology and business theory is sometimes referred to as ‘groupthink’ (Janis, 1972). In the twentieth century, governments also began to use mass media marketing tools such as TV advertising to raise awareness of issues such as ‘stranger danger’, road safety, smoking-related illness, obesity, fire safety and other behaviours seen as potentially dangerous to individuals and society. These ‘public information’ campaigns were aimed at raising awareness of the consequences of particular behaviours and encouraging behaviour changes – and this is what the concept of social marketing is all about. 18 │ Vol 4 Issue 2 2013
‘Social marketing’, a phrase first put forward by Kotler and Zaltman in 1971, has been defined in many ways, although perhaps one of the most useful and often cited definitions is that of Andreason (1995) who suggests that it is "the application of commercial marketing technologies to the analysis, planning, execution, and evaluation of programs designed to influence the voluntary behaviour of target audiences in order to improve their personal welfare and that of their society."
In recent years, social marketing techniques have begun to incorporate elements of what is often referred to as ‘nudge theory’ (Thaler and Sunstein, 2008) to subtly encourage changes in behaviour. Thaler and Sunstein (2008) defined a nudge as “any aspect of the choice architecture that alters people’s behavior in a predictable way without forbidding any options or significantly changing their economic incentives. To count as a mere nudge, the intervention must be easy and cheap to avoid.”
So that’s what it means, but does it work?
This theory aims to put into place environmental influences which guide us to unconsciously make the ‘right’ choices, and this can be facilitated or reinforced through social marketing campaigns.
These campaigns tend to be focused on creative appeals that are related to fear and shock, but do we need to be shocked into behaviour change? Or, in an age where grisly autopsies, violence and horror are commonplace on our TV and games console screens will we just switch off and tune out? Is it a good use of public money, or would it be better to legislate against damaging behaviours, or simply let individuals seek out their own information and make their own choices? Unfortunately there are no simple answers to these questions.
It has been widely reported that the UK’s Prime Minister David Cameron (who is, after all, a marketer by trade) favours the ‘nudge’ approach to tackling social problems rather than legislating against negative behaviours. To this end, the government has established a specialist department, the Behavioural Insights Team (nicknamed the ‘nudge unit’), charged with developing messages and environmental cues that will encourage us to behave in ways considered healthy or productive.
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Image: ©iStockphoto.com/Colonel
The alternatives to ‘nudges’ range from outright legislation (which, it is argued, can simply push some behaviours and their associated markets underground) to classic psychological conditioning (think Pavlov’s dog), and marketing communications techniques such as informing, persuading and incentivising. One new way incentivisation has been used in social marketing campaigns in recent years is through the introduction of ‘gamification’ – i.e. the principles of game play applied to non-game environments (Deterding, 2011). Schemes such as Sweden’s Speed Camera Lottery, where the proceeds of speeding fines were distributed to drivers who kept within the limits, and ‘Recyclebank’ a scheme where people earn points for recycling and can exchange these for their choice of reward are attempting to go beyond the subtle nudge to a offer a more direct and tangible payoff for participants. But do these social marketing techniques such as ‘nudges’ and gamification work? Well, although there has been plenty of research into the efficacy of more traditional social marketing campaigns and they are widely used still today (think
of the recent drinkdriving campaigns, and the ‘Change 4 Life’ anti-obesity campaign), there is still no consensus of opinion on its efficacy, and the data available has considerable limitations (Stead et al, 2007). It is similarly difficult to measure the impact of both gamification and nudge techniques, because of the difficulty in isolating the intervention as a variable in complex social settings, and because of the lengthy time periods required to study the long term impacts on behaviour and health or society.
What future then, for social marketing, and the nudge? Well, it seems human nature is such that some of the things we do to help us cope with modern life are not always good for us or for society, and as long as we are able to engage in behaviour our governments consider negative, there will inevitably be a perceived role for a corrective action. Whether a simple nudge in the right direction is enough, or whether we’d be better off reverting to a carrot and stick approach is, it seems, still up for debate. Please contact swbr@smu.ac.uk for full details of sources cited in this article.
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News and Reviews
Events @ Swansea Business School
For further details of these events and to register to attend please email swbr@smu.ac.uk or call our Faculty Office on 01792 481132.
28th February 2013, 6pm
St David’s Day Lecture
Dr Paul Thomas delivers the Swansea Business School annual St David’s Day Lecture on ‘Simplexity’. Limited free places available at http://stdavidsday2013.eventbrite.co.uk
13th March 2013, 1pm-4pm
Undergraduate Open Day
Open Day for Undergraduate programmes at Swansea Business School. Visit: www.smu.ac.uk to book a place.
20th March 2013, 13.30-16.30pm
Sports Marketing: Insights for Other Sectors
Half day conference in collaboration with the CIM. Visit www.cim.co.uk to book. Price: £45
New Campus Opens for Business The New Year saw a new start for staff, students and everyone engaged with Swansea Business School as the Faculty of Business and Management moved into its new premises in Powell Street, just a stone’s throw from Swansea Railway Station. The building, which has been transformed from an office block to a hi-tech teaching and learning facility, will be home to more than 1000 students plus staff and visitors, and offers a dedicated library and
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computing suites, a refectory and a wide variety of learning spaces. The move not only provides the growing Business School with the additional space needed to develop further, but also shows Swansea Met’s commitment to offering education at the heart of the city. Leigh Jenkins, Dean of Faculty, said "The Faculty has been extremely successful in recent years, and as we have grown and developed our course offerings, we have
reached the stage where we need more space. This new campus will help us improve our facilities, and create a fantastic new learning environment for our students." The School will be hosting an official launch in the spring, and local businesses are warmly invited to attend our programme of free guest speaker sessions, scheduled throughout the academic year.
Sustainable Strategy at Brecon Carreg
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Can Wales Compete Globally? Have Your Say!
Kicking off the first in a series of guest speaker sessions at the new Swansea Business School building this year was Paul Cooper, Business Development Manager at Brecon Carreg Water, with a fantastic insight into the strategic decision-making behind one of Wales’s most iconic bottled water brands. Paul, who battled through the January snow to get to us, gave staff, students and guests from our professional association partners the CMI, CIMA, the CIPD and CIM, a fascinating presentation which showed how the Brecon Carreg brand has successfully carved out a position for itself in a highly competitive market.
and sustainability issues which face the industry by taking active steps to reduce the company’s impact at both a local and global level. This session was part of a series of guest speaker events which are designed to enhance our students’ experience (linking to specific elements of their studies wherever possible) and to provide local businesses and professional organisations with access to leading edge thinking.
See our Twitter feed @SBS_SMU, ‘like’ Swansea Business School on Facebook, or join the Swansea Business School group on LinkedIn for updates on future events.
The next issue of the South Wales Business Review will focus on Wales’s international links, and how Welsh businesses can gain access to international markets. We’d love to hear your thoughts on this, and will be publishing a selection of Tweets, LinkedIn posts and emails on this in the next issue. So, if you have an opinion on the question ‘Can Wales Compete Internationally?’, please send us your thoughts: Tweet @SWBusReview with the hashtag #walestotheworld
He also explained how Brecon Carreg is tackling the corporate social responsibility
Join the Swansea Business School Group and post your thoughts to the discussion.
New Part Time Marketing Programme Launches
Email your views to swbr@smu.ac.uk
We’re delighted to announce that we’ll be adding a new programme to the range of marketing courses we offer at Swansea Business School this summer, and for the first time, professional marketers will be able to study the Chartered Institute of Marketing’s Chartered Postgraduate Diploma in Marketing, the highest professional qualification offered by the CIM, in a flexible study pattern right in the heart of Swansea’s city centre. The course is aimed at those with a degree or equivalent qualification and relevant experience in marketing, and will be taught on a modular basis via a combination of intensive taught sessions at our new campus building, along with online support via our virtual learning environment.
To find out more, email Jayne Williams at Jayne.Williams@smu.ac.uk for details.
Please note that your contributions may be published in the next issue of the South Wales Business Review. We will inform you if your contribution has been chosen. Vol 4 Issue 2 2013 │21
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Books:
‘We depend on technology which we do not understand.’
Steve Griffiths
Steve Griffiths reviews John Naughton (2012) ‘What you really need to know about the Internet’, from Gutenberg to Zuckerberg, London, Quercus.
The author, John Naughton, Professor of the Public Understanding of Technology at the Open University and regular technology reporter for The Observer, writes in a simple way on complex topics. He is always thoughtful, provocative and illuminating and so his book on the internet has been long awaited and it does not disappoint. Whether you are a specialist or someone who thinks Tim Berners-Lee is the guy who organised the Olympic opening ceremony, you will learn something from this deceptively accessible book. It is good to hear a writer saying “we don’t really know what is going to happen”. However as an essential tool which is changing our culture and very lifestyles, he urges that we get informed to have some control over the code that will otherwise dictate to us. 22 │ Vol 4 Issue 2 2013
I particularly like his list of key factors for analysis which can be adapted to many discussions on Internet applications. Naughton’s 9 Key ideas:
1. Take the Long View
and even more important. There is often confusion in these concepts…so read this book if you want some clarity.
3. Disruption is a Feature, not a Bug
Perhaps we can learn from the experience of introducing other radical technologies, but we have the benefit of hindsight for this sort of analysis. It is difficult to predict what the future of the web and net will be despite any parallels we draw. However we should not be censorious of some early negative features and lose the long term benefits of the technology.
The Net has no central ownership and no optimisation for any particular application. It takes in data packets and delivers them. Shocks to the system must be expected and planned for. These can be negative, but also a creative feature.
2. The Web isn’t the Net
Economics the science of scarcity, the web has abundance...dinosaurs coexist with new life forms, but there is a need to filter the mass of data.
The web is huge and important, but it’s just one of the many things that run on the Internet. The Internet itself is bigger
4. Think Ecology, not Economics
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5. Complexity is the New Reality The pace of change and the density of exchange, make for difficulty in understanding and predicting. Traditional control mechanisms to simplify diversity will not cope. We need to be prepared to experiment.
6. The Network is now the Computer Who cares about what device gets you on the net? We are Net dependent, but have no agreed protocols or fail safes.
7. The Web is Changing “Semantic web” software will judge web pages on relevance. The web is no longer just a publication medium.
8. Huxley and Orwell are the Bookends of our Future Consider Neil Postman’s analogy that before the web existed Aldous Huxley predicted that we would be destroyed by the things we love (i.e. is Google making us stupid?) whereas George Orwell thought we would be destroyed by the things we fear (i.e. the net as the perfect surveillance tool).
publishers. How will this be managed? Naughton does supply answers or at least many proposed by respected authors, and voices the need for flexibility and a critical, but creative response to the new environment that we face. A must read for everyone who uses the Internet…and who doesn’t these days?
“The web is huge and important, but it’s just 9. Our Intellectual Property Regime is no one of the many Longer Fit for Purpose things that run on the Internet. The Internet Analogue copying was difficult and itself is bigger and degenerative, whereas digital copying is perfect. Current IP systems are out of even more important.” sync and millions of us have become Vol 4 Issue 2 2013 │23
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