The importance of Network Social Responsibility in value creation

The importance of Network Social Responsibility in value creation

Value creation is crucial across various global economic activities, where managing the value chain on a global scale is pivotal for success in a competitive environment. Decisions regarding activity localization and partnerships are now strategic for positioning companies competitively. While the value chain initially focused on internalization, globalization has made optimizing localizations and partnerships essential for maintaining competitiveness.

Recently, there has been a growing focus on corporate social responsibility, prompting companies to act as "good global citizens". This entails not only meeting consumer demand for responsible products but also addressing internal and external ethical considerations, such as political pressure and public opinion. Companies are expanding their value proposition to include socially responsible behaviors, not only to extract value on a global scale but also to meet market needs and ethical commitments.

This contribution aims to explore the theme of corporate social responsibility and its relevance to business competitiveness by proposing to integrate the concept of the value chain with that of the values chain. The latter involves respecting the values declared by the company throughout the value chain, involving external suppliers, strategic allies, subsidiaries, and other partners. This shifts the focus from traditional CSR to a new form of network social responsibility, NSR (Network Social Responsibility). This approach should not be seen as an additional cost or constraint but as an opportunity to provide innovative value to the market and share the company's values at all levels of the organization.

Over the past thirty years, the production of final goods has undergone radical changes, becoming increasingly reliant on complex value chains that span globally and involve various organizations. The dispersal of activities and the diversification of partners are considered crucial for corporate competitiveness, enabling the selection of the best locations and most suitable partners for value creation.
These chains, sometimes referred to as "commodity chains", represent interorganizational networks that connect families, businesses, and states in the global economy. Networking is a fundamental feature of these chains, where a significant portion of international trade occurs among affiliated companies or through independent business networks.

Consumer interest in transparency and ethics in the production chain has significantly increased, making it essential for companies to adopt responsible practices throughout the value chain. The importance of traceability is expanding beyond the food sector to encompass all products and services. This implies that sellers not only ensure the physical realization of the product but also the quality and ethics of the underlying processes, which may involve various organizations worldwide.
Traceability of product quality, extended to social responsibility along the value chain, poses both a challenge and an opportunity for companies. It's a way to deliver value to the customer and uphold values within the system, offering innovative value propositions.

The governance and management of networks are crucial for addressing external pressures towards socially responsible behavior from consumers, the public, and investors. Network governance, defined as how companies establish and implement parameters for coordinating activities within the global value chain, becomes essential. Contrary to the common belief that companies involved in a network are boundaryless, each maintains its distinctive identity in terms of corporate values and culture, especially locally. Network governance tackles the challenge of promoting and implementing shared values among partners, particularly in transnational contexts where traditional hierarchical mechanisms are weak. It plays a fundamental role in adopting and aligning shared values among partners in the global value chain, thereby contributing to corporate social responsibility.

According to Fichter and Sydow (2002), factors influencing network governance include network size, the nature of relationships, and the presence of a central node. Adding further complexity, geographic dispersion becomes a key factor. A critical question when transitioning from CSR to NSR is whether value sharing is a prerequisite or an outcome of the network itself. If it's a prerequisite, network governance begins with partner selection based on specific criteria like economic viability and organizational skills. If NSR is an outcome, partners gradually align on shared values and social responsibility practices.
Network management practices encompass partner selection, allocation of resources by the central company, implementation of codes of conduct, and partner training. Partner selection constrains choices and does not directly support the central company in improving working and environmental conditions abroad. However, the latter two practices can coexist and mutually reinforce each other, involving investments and fostering mutual commitment in the long run.

  • #Corporate
  • #Sustainability
  • #Management
  • #Innovation
  • #Communication
  • #Responsibility
Sources:

Fichter M., Sydow J. 2002, Using Networks Towards Global Labor Standards? – Organizing
Social Responsibility in Global Production Chains, Industrielle Be-ziehungen 9 (4)

Zucchella, Antonella, "La responsabilità sociale nelle reti d’impresa", Symph. Emerg. Issues Manag 2, 2007