SK telecom Case Review IIM C

1. Corporate Social Responsibility
Section A Group 2

2. SK Telecom
Part of SK Group
One of the 4 major family conglomerates in
South Korea
23 million customers, 50.5% market share in
South Korea

3. SK Telecom’s CSR
Dedicated CSR function created
Year 2003
2006 First Korean company to
promote employee
2007
volunteerism
2008
Main CSR activity involved
2009
community involvement
programs

4. SK Telecom’s CSR
Spent over 2 percent of pretax
Year 2003 benefits on CSR
Highest contributor to CSR
2006 revenues(upto 80%) amongst the
2007 subsidiaries of SK group
2008 Integration of core principles across
2009 business units
Shut down USD 70 Mn adult content
service business for CSR aimed
towards youth protection.
Competency Based Brand Relevant
Core Principles
Stakeholder Engagement Integrated Approach

5. SK Telecom’s CSR
Till 2006 CSR activities were limited
Year 2003 to regional social challenges and
community activities
2006 Published first SK Telecom
2007 Sustainability report
2008 Established SK Nanum foundation to
2009 direct Happy Doshirak Program to
provide meals to underprivileged
teens

6. SK Telecom’s CSR
Year 2003 Nam’s appointment by CEO to
2006 enlarge the scope and increase the
visibility of engagement with society.
2007
Two separate teams for CSR activities
2008
Separation resulted in lack of
2009 commitment and confusion
Ethics Management
SK Telecom
Team
SK Group
Corporate Community
Involvement

7. SK Telecom’s CSR
Year 2003 Joined United Nations Global
2006 Compact Initiative
2007 Instituted SK Telecom Corporate
Citizenship Committee
2008
Instituted SK China Corporate Social
2009 Responsibility Committee

8. SK Telecom’s CSR
SKMS came with a philosophy
Year 2003 of commitment to contribute
to happiness of all
2006 stakeholders
2007 Important parameter in SK
2008 Telecom’s Corporate
2009 Citizenship and Sustainability
Policies
Ethics Management
Ethics committee renamed as
Corporate Citizenship
Customer
Protection
Environment Committee.
Initiative to imbibe social
investment into sustainability.
Win-Win Community 5 Key focus areas of CSR
Partnership Involvement

9. SK Telecom’s CSR
Ethics
Year 2003 Looked at ethics management
2006 practices at SK Telecom
2007 Environment
Focused on 3 areas: Green
2008 Process, Green Products, Green
2009 Culture
Community Involvement
Using mobile/ IT convergence to
increase volunteerism for various
community activities
Win-Win Partnerships
Involving suppliers in CSR
Customer Protection
Forming a portfolio of socially relevant
mobile communication services

10. SK Telecom’s CSR
Year 2003 Composed of 3 independent
2006 businesses
2007 Top management focused on 2
2008 strategic priorities: Convergence and
Globalization
2009 Merging of PR office and ethics
management teams.
SK Telecom
Mobile Network Global Convergence and
Operator Business Management Internet Services
(MNO) Service (GMS) (C&I)

11. Structure in 2009
Board of Directors
CEO
GMS MNO C&I
Corporate Relations
Office of Corporate Management Customer Oriented
and Legal Affairs
Culture Support Center Management Office
Division
Win-Win Customer
Ethics Management CCI/ Environment
Partnership Protection
Ethics Management Business Relation Customer Oriented
CSR Team
Team Team Management Team

12. Key Issues
Corporate Community Involvement and Ethics Management
Team cater to different division which are autonomous business
units.
Lack of coordination and synergy between the units.
Units in charge of 5 focus areas under corporate citizenship
dedicated to three different business units.
No clear mission or vision statements for the units to preform
on a common ground.
No co-ordination between the business units in terms of CSR
activities, they were rather on a competing ground.
No trained workforce in place to carry out CSR business strategy

13. Advantages of the Current CSR strategy
Ability to concentrate on specific CSR activities
Can respond to fast change in environment
Ease of measurement of unit performance
Decentralized decision making
Scope for management to focus on strategy
Clear division of responsibilities and focus areas
Sustainable growth

14. Disadvantages of existing CSR strategy
Conflict between goals of divisions
A low alignment of value with work practices in terms of win-
win partnerships with suppliers, community involvement and
customer protection
Duplication of functions between divisions
Complexity of inter-divisional coordination
Managing the corporate-divisional relationship: finding the
balance between centralization and decentralization
Coordination problems between divisions: divisions start
competing for resources and rivalry prevents cooperation
Bureaucratic costs: multidivisional structures are very
expensive to operate
Low stakeholder involvement

15. Creating Value
Restructuring was not the solution
Mission and vision statements needed to be chalked out first
A common vision and mission statement for all global business
units
A cross cultural team CSR team needs to be formed sharing
common mission and vision
More freedom in budget allocation and equity to all business
units globally
The global CSR team should report to BoD which would
facilitate higher participation and a sense of ownership
Budget approvals to be made centralized
More focus on human element
Alignment of business objectives with organizational goals