Strategy is, of course, determined by working with the strengths of a company and working around it present weaknesses.  An appropriate vehicle for an organization to assess its CSR capabilities is through the Kaplan & Norton Balanced Scorecard System. 

Since the 1990s, the Balanced Scorecard System has provided a rigorous way to measure performance by quantifying so-called intangible assets.  The Balanced Scorecard draws its strengths from four perspectives:  1) financial measures; 2) customers; 3) internal processes; and 4) learning and growth. 

Kaplan and Norton used this four perspective model and link it with the time-based dynamics of strategy to create strategy maps. A strategy map provides a visual representation of the organization’s strategy.  A strategy map creates a powerful communication tool that enables employees to understand a strategy and translate it into actions to allow the organization to succeed.

The key benefit of a strategy, as articulated by Michael Porter, is when the integrated and aligned activities enable the company to offer a value proposition better than competitors.  While Porter’s work helps managers formulate strategy, the Balanced Scorecard provides the discipline to ensure that the formulated strategy has specific objectives for shareholders and customers, an explicit value proposition and organizational culture.

Porter argues that strategy is determined by a unique combination of activities that deliver a different value proposition than competitors or the same value proposition better.  The strategy map framework allows companies to identify and link together the critical internal processes and human, information and organizational capital that deliver the value proposition differently or better. 

The process of creating a strategy map and Balanced Scorecard translates the formulated strategy into specific objectives, measures and targets and initiatives in the four inter-related perspectives.  The strategy map helps organizations translate, communicate, implement and review the strategy they have formulated following Porter’s principles.

The methodology is general as whichever strategic framework the organization is using still needs to translate and communicate across all business units and to all employees if the strategy is to be implemented effectively.

Choosing the CSR indicators that correctly match a corporation’s strategy is both art and science, as much of strategic planning.  The four perspectives can be easily adapted to CSR opportunities and challenges

CSR is a non-financial driver that needs to be quantified.  Companies need to realize that non-financial measures impact profitability.  The importance of CSR is increasing.  The upcoming generation of employees has much greater expectations as to the actions of companies, and it impacts where they decide to work.  Potential employees will research the social actions of companies before determining where to work.

The Economist concludes that, “One way of looking at CSR is that it is part of what businesses need to do to keep up with (or, if possible, stay slightly ahead of) society’s fast-changing expectations.  It is an aspect of taking care of a company’s reputation, managing its risks and gaining a competitive edge.” (Jan 17, 2008)