Knowledge Centre:
News Digests

Stay abreast of what’s happening internationally with developments in corporate public affairs. Here is news that you may find useful and interesting:

Asia: the rise of the middle classND

David Pilling, Kathrin Hille and Amy Kazmin, Financial Times, 4 January 2011

Until recently, many economists were sceptical about the idea that China, or any other emerging Asia economy, could develop a sizeable middle class. However, this scepticism is beginning to fade. With growth in Europe and possible America likely to be slow for years to come, many businesses may look to Asia to attract new consumers. In China, many people have reached a ‘threshold level’ of income, at which consumption takes off. McKinsey expects that middle class will expand from 29 per cent of China’s urban households to 75 per cent in 2025. Similar growth is also anticipated in India, where it is expected that the number of households deemed middles class will nearly triple over the next five years. For more information see

The rise of the networked enterprise: Web 2.0 finds its paydayND

Jacques Bughin and Michael Chui, McKinsey Quarterly, December 2010

A new class of company is emerging — one that uses collaborative Web 2.0 technologies intensively to connect the internal efforts of employees and to extend the organisation’s reach to customers, partners, and suppliers. Results from a survey show that the Web 2.0 use of these companies is significantly improving their reported performance. Among companies that report using Web 2.0, a large majority continue to report that they are receiving measurable business benefits, including effective marketing to faster access to knowledge. Executives need to push their organisations toward becoming fully networked enterprises. Methods to achieve this include: Integrate the use of Web 2.0 into employees’ day-to-day work activities, Break down the barriers to organisational change and Apply Web 2.0 technologies to interactions with customers, business partners, and employees. For more information see

Co-creating planet-friendly profitsND

G. Michael Maddock and Raphael Louis Vitón, BusinessWeek, 21 December 2010

Co-creation is the practice of finding a synergistic partner and creating a new product together. It can occur both between profit-driven companies and nonprofit, and between profit-driven companies and cause-driven companies. The practice is becoming increasingly popular as companies recognise that consumers want to support companies that offer products, services and business models, which are good for the planet. The fourth annual Global Consumer Study from Edelman notes that a significant majority of consumers believe that a business needs to place as much weight on society’s interests as its own and that brands and consumers could do more to support good causes by working together. For more information see

Online sustainability reporting: moving from reporting to dialogueND

Mara Chiorean, CSR Asia, 15 December 2010

This article looks at recent trends and developments in the use of online media for sustainability disclosure and examines some examples of effective new media usage for this purpose. Using online sustainability reporting can brings benefits such as: resource efficiency, regular updates, engagement with a large audience, ability to track readership and improve stakeholder dialogue. This articles also outlines several case studies involving companies implementing Web 2.0 technologies to improve user interactivity and contribution. More and more companies realise that opening their communication channel is far less risky than they might have feared. Full online sustainability reporting and active stakeholder dialogue will be expected from a sustainability leader. For more information see

New accent on customer tastesND

Louise Lucas, Financial Times, 13 December 2010

In the past, products originated and were developed in the North and sold to the South. Nowadays, however there is a strong flow of ideas between the North and the South. Companies such as Unilever are recognising this, and are hence shifting more research and development resources to the emerging markets. This will have a number of consequences, including the development of existing products to suit the local market; new approaches to marketing and advertising as well as resulting in a quicker roll out of products internationally. For more information see

The Steve Jobs theory of customer relationsND

Joshua Gans, Harvard Business Review, 13 December 2010

Generally, CEOs don’t tend to engage with ordinary customers, instead leaving this interaction to their marketing or public relations department. Apple’s CEO, Steve Jobs, is however taking a different approach to customer relations, interacting with and responding to customers’ individual questions. Although Jobs’ answers tend to be quite brief, they are clear and to the point. Jobs’ approach to customer relations is just another business strategy that differentiates Apple from other brands, therefore strengthening the entire corporation. For more information see

Taking a green lesson from BhutanND

Xiong Lei, China Daily, 11 December 2010

Leaders need to broaden their outlook to consider models of sustainable development from less advanced countries. While current understandings of development centre on GDP growth, it is important for leaders to diversify this understanding and broaden conceptions of modernisation and civilisation. Bhutan provides a strong model of alternative development conceptions, measuring development in terms of Gross National Happiness (GNH). This includes measures such as psychological well-being, health, education and environmental diversity. While Bhutanese people still want prosperity, they are unwilling to sacrifice their ‘cherished traditions and culture’, preferring to pursue their own model of development rather than getting lost in the popular understanding of ‘modernisation’. For more information see

Chinese lead Asia-Pacific in online overseas purchases ND

Wang Zhuoqiong, China Daily, 8 December 2010

A survey conducted by Visa has demonstrated that Chinese consumers form the largest group in Asia-Pacific of online shoppers buying from overseas websites in the past year. Most shoppers are female, and the preferred websites are US and UK based, with customers preferring to buy products that they can’t get locally. The most commonly bought items online are clothing and shoes, however education and travel services contribute also to spending on international websites. As well as gaining access to a greater range of products, consumers also choose online shopping because of the convenience of this method over the conventional method. For more information

The business of charityND

Emma Connors, The Financial Review, 8 December 2010

Charities are becoming increasingly engaged with businesses. While increased funding is an incentive, charities also experience benefits in terms of gaining contacts, learning about business strategies and learning exactly what businesses want from their philanthropic activities. The relationship between business and charities is also developing in terms of the workforce, with more and more people moving from the for-profit to the not-for-profit sector, thus bringing valuable business experience to charitable organisations. Charities need however to maintain the balance between the corporate and charitable aspects, ensuring they uphold their values. While the relationship between business and charities can be a potential cause of conflict within organisations, ultimately, the relationship can benefit society as a whole. For more information see

Marketing to rural ChinaND

Max Magni, Harvard Business Review, 7 December 2010

While foreign and local marketers have begun expanding into smaller cities in China, few have moved in rural areas as they feel it would not be a wise business choice. Primarily, concerns about moving into rural China arise from the fact that there are few modern stores, as well as the fact that many of the roads in rural areas remain unpaved thus creating difficult transport situations. There are however ways of overcoming these difficulties to allow marketers to profit from rural China, such as setting up franchises to increase the number of stores, taking advantage of subsidies for rural consumers, and using existing sales and after-sales networks. Marketers looking to rural China should take care to tailor their products and prices to the rural market. For more information see

Four myths about business ethicsND

Chris MacDonald, CSR-NEWS, 6 December 2010

Four major myths about business ethics have been identified and debunked. The first is that the term ‘business ethics’ is an oxymoron. This is incorrect, as commerce is quite literally impossible without ethics. Every single commercial transaction requires some level of trust, which requires a shared commitment to ethical behaviour. The second myth addressed is the idea that ethics is ‘just a matter of opinion’. In fact, on many ethical issues there are actually better and worse answers which need to be talked through. The third myth is that there’s no such thing as ‘business’ ethics, as ethics should be consistent everywhere. In fact, business has unique characteristics, such as the fact that large companies have the potential to do significant harm to stakeholders and the environment. The final myth addressed is the perception that business ethics is just a matter of regulation. The reality is that there are behaviours that are legal but unethical, and also those that are illegal but ethically okay. For more information see

As wages rise, time to leave China?ND

Joe Manget and Pierre Mercier, Bloomberg Businessweek, 1 December 2010

The advantage for companies in basing their manufacturing operations in China is disappearing with the advent of rising wages, currency inflation and high fuel costs. Although searching for nations with cheaper wages provides a solution, this would only be short term as wages are rising around the world. Staying in China provides companies with the opportunity to rethink their approach to global production to stimulate greater productivity gains, as well as giving them the advantage of tapping in to the growing domestic consumer market. Additionally, companies have the option of moving their manufacturing capabilities closer to their consumers, for example American companies developing factories in Mexico. For more information see

China’s culture of secrecy brands research as spyingND

James T. Areddy, The Wall Street Journal, 1 December 2010

Foreigners conducting business in China are increasingly falling foul of laws that classify espionage as what most of the world would consider market research. The culture of secrecy in China, emerging primarily because of the strong relationship between government and business, makes foreigners cautious about engaging in business ventures in China, as well as being at odds with China’s desire to modernise its business sector through the involvement of foreign business. For more information see

Beyond paid media: Marketing’s new vocabularyND

David Edelman and Brian Salsberg, McKinsey Quarterly, November 2010

Traditional paid media used to be the only option business had when it came to marketing, yet today there are many more alternative forms of media that business can exploit. These expanding media forms reflect the way consumers perceive and absorb marketing messages. Marketers should view the expanding media options not only as a challenge but also as a way for readers to share content and even create their own content. Media can be ‘earned’ where the quality or uniqueness of a company’s product or content compels consumers to promote the company at no cost to itself. The diverse range of options has also increased the chance of being ‘hijacked’ and people quickly voicing concern over company operations. This provides a scary and significant reversal of the control traditionally maintained by marketers, therefore many are responding by encouraging satisfied customers to post online and replying to negative comments in a prompt and professional manner. For more information see

Emissions control efforts bring business opportunitiesND

China Daily, 25 November 2010

The Chinese government is demonstrating strong support for China’s new energy market, accelerating the construction of solar, hydropower, nuclear and wind capacities by investing in new materials and technologies. Chinese businesses are recognising the government’s commitment to developing clean energy, and are thus seizing the opportunity to invest in new energies, as well as beginning to adopt cleaner practices in their own operations. For more information see

Secrets to an engaging CEO videoND

Haig Simonian, Financial Times, 25 November 2010

CEO videos are emerging as a trend in business communications, with companies increasingly taking advantage of the ease and low cost of production techniques to deliver fresh and engaging messages. While CEO videos can be an effective way of communicating, there are certain things to be aware of, such as the need to use different angles instead of a single shot and to deliver using a natural, clear and uncomplicated style. Additionally, techniques such as wearing an open-necked shirt and exposing production equipment can be used to create a sense of credibility. For more information see

A good cause: China’s grapple with charitable givingND

Knowledge @ Wharton, 24 November 2010

In China, there is a certain tension surrounding charitable giving, largely because of the lack of transparency and management of NGOs in China. The difficult legislative and regulatory environment surrounding NGO registration contributes to this problem, with many NGOs choosing to register as a business to avoid such obstacles, thus meaning their activities are largely unregulated and unsupervised. While there has been a recent increase in private foundations established by Chinese tycoons as well as overall awareness of the need for charitable giving arising from the Sichuan earthquake, much needs to be done to improve the attitudes surrounding charitable organisations in China. For more information see

Building reputational intelligence ND

William G. Margaritis, Bloomberg Businessweek, 23 November 2010

The key to building reputational intelligence is to identify your company’s vulnerabilities, and to engage in strategic planning by building an authentic culture and making your organisation’s values known to the public, a role that is best managed by the chief communications officer. Although this will not mean that your company avoids crises, it will however mean that your organisation is more likely to get the benefit of the doubt when a crisis occurs. Some strategies for fostering leadership and communication include ensuring that there are constant risk assessments carried out at every level of the organisation, and ensuring that the chief communications officer has a strong strategic understanding of the business. For more information see

Improving corporate community involvement through a human rights based approachND

Michelle Brown, CSR Asia, 17 November 2010

Community involvement focuses on the way in which a company interacts and contributes to the long-term prosperity of communities, rather than the charitable operations that a company engages with. Social responsibility involves social investment in key areas such as education and skills development programmes, and according to the ISO 26000 guidelines is defined by the core principles of accountability, ethical behaviour, transparency, respect for the rule of law, respect for international norms and behaviours and respect for human rights. While there are a number of problems with corporate community involvement in Asia, a human-rights approach to community involvement facilitates long-term and sustainable value creation. For more information see

Increasing costs worry business managersND

Yang Ning, China Daily, 16 November 2010

A survey conducted by the China Entrepreneurs Survey System has revealed that about 75 per cent of Chinese entrepreneurs consider the rising price of labour and raw materials as their biggest challenge. Other concerns raised in the survey include the heavy burden of tax, social security and financial strains, as well as an overall lack of talent. The survey also demonstrated that most entrepreneurs are cautiously optimistic about the nation’s future economic trend, with some consequently recognising the need to upgrade industries and invest more in innovation. For more information see

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