Where will corporate social responsibility reach up to?

publication date 07.05.2006

Where will corporate social responsibility reach up to?

A whole range of the world´s leading companies of both national and multinational significance have included in their entrepreneurial visions a new philosophical stream “specific to them“ which comprises a higher civilization purpose of business and trading. It accentuates a deeper social sense of meeting the needs and providing the resources for the development of human society. The strategic general plan of enterprise is closely interwoven with threads of new meaningful beliefs “about corporate social responsibility of companies“.

Related articles

Most of these companies are inclined to think that social responsibility paints a picture of their corporate culture, their acceptability on the market. It can be viewed in advertising: companies spread this trend through the media, it is cultivated, taught and incorporated into the company´s vital spheres, in particular into PR, HRM, marketing, infrasturcture, logistics and a whole range of processes that used to be the tail end of their business agendas. 

This trend is very complex and so far, as a process, it has been little known and understood. It clearly discloses, though, the management´s and the owner´s real intentions regarding their customers, business partners and employees. It is imprinted in all the processes across the company up to the market environment where the company makes its business activities happen, whether in the primary (product), secondary (recyclable raws) or tertiary (non-recyclable raws) spheres of the market environment. In addition, not only it is becoming the objective, but the tool and the identifier in displaying the “corporate image“. It truly makes an integral factor.

As indicated by the media information, this way companies enrich their goodwill with a civilization and humane mission, with ideals of making life safer and better. In particular, they express their social mission, i.e. the company´s willingness to adopt new and higher social commitments adding “integrated value“ to their products, the entire company and its vicinity as well. These measuring systems have more substance than the economic indices with limited reach, such as EVA, MVA, CFROI which do not appeal to the general public, but rather to an inner cabinet of economic experts (see Modern management 6/04, p.44).

One example for all. What are the ways of some (Czech and German) companies which transport illegally secondary and newly also tertiary waste to create dumping sites in the Czech Republic just to wickedly make a profit. For even an arogant idiot would not allow creation of several tens of dumping sites in the small regions of the Czech Republic. Yet this is not the end of the procedure chain. What are the actual ways of countries which made this process possible? Are they neighbours, rivals or foes? Yet even that is not the end of the chain, for the state has its policy governed by the CSR defined by political parties. All political parties are responsible for enforcement of CSR in Europe and, ultimately, the world. What kind of social responsibility does the spectrum of political parties really have? Whether we like it or not, the state´s intents and visions are interconnected with policies of the individual firms creating the added value in its territory through the philosophy of CSR. It concerns all the spheres included in CSR, not only products. To put it metaphorically, it is about how the company, through its own policy and the policy enforced by the state, shares in the culture of regions, development of the state and state groupings. Today, big corporations from the spheres of IT, power generation and utilization of natural resources, in their visions, are reaching out for the ultimate ideals of the civilization development – the quality of life on the Blue Planet.

Apart from the above, its pricipal substance is extended to include the companies´ mission to look for and form rational partnerships in the market environment: 

  • between companies
  • between companies and civil regions
  • between companies and states and their agencies, on the basis of a mutual symbiotic relation

A strategic intent of CSR is to find more effective social bonds between the employees and the management, between the staff of the company and the general public and the representatives of the state and the region, so that the company or corporation can smoothly become part of the system.  Currently, there are three spheres getting the attention which should bring a pronounced synergic effect. From the companies´ point of view, they are mainly the following ones:

  1. Economic responsibility, i.e. an effort to achieve a long-term business prosperity in their respective regions of activity (the effect of expanding employment in the region).
  2. Environmental responsibility (protection and sustainability of the environment for the benefit of the general public and a rational exploitation of the region´s resources and their renewability.
  3. Social responsibility (creation of such an environment that secures the good living standard in the region, safety and protection of public health, improvement of the quality of life including the development in education and culture).

Here is a proof that the company´s image on the regional, national and multinational level today is not by far assessed through the economic indices only, but, ever more so, through the ways how the company contributes towards the development of the region and the state and how it helps the state to refine and integrate with the world and European structures. If we give this information a thought, all those engaged in the CSR philosophy will have three fundamental tasks:

  1. How do the state and the region make for the company´s long-term development?  
  2. How does the company make for the development of education and employment, thereby increasing the quality of life in the region?
  3. How do the state and the region help the company´s employees to understand its social responsibility and how do they promote it.

It shows clearly, for instance, in the sphere of a higher intellectual performace and a higher mobility of human resources within the region. Not only that the company´s CSR is being developed, but so are intellectual capacity and education of the general public in all the scientific and industrial areas where the company operates. If it is a multinational corporation, these aspects have multinational importance, which helps to create mutual partnerships of nations, states nad aliances. As it appeared this is a very good way how to make a higher quality of life happen.

The characteristics that identify CSR are, for example, the following:

  • effect the company´s stability has on the employment rate and the unemployment rate in the region as well,
  • economical and safe exploitation of the natural resources and their renewability,
  • higher and growing educational level of population 
  • formation of research, development, social and product centres.

There is also a whole range of other areas whose correlation has not been fully established, such as searching for the relation between the employee satisfaction and the crime rate in the particular region, strengthening of the social cohesion, controlling the racial tensions, creation of the local regional patriotism or transfer of companies´ headquarters and production plants to the region. Unfortunately, we can also identify phenomena highlighting the reverse flow in such partnerships. The examples are countless.

If we come back to a serious ground, the introduction of CSR has more aspects that have to be elaborated more thoroughly. It is not a matter that ends up in a personnel campaign, but one that requires a long-term preparation of the company´s management and key employees and aims at a continuous improvement of the corporate culture. The thing here is for the entire company staff to understand and absorb  the essence of social responsibility and project the knowledge gained into the conduct of both the employees and, mainly, the management, as part of the company´s process control. 

If you ask why we put the accent on the managers´ conduct, then the answer will be because it is the manager who is always a model to their subordinates, and it is especially true in the sphere of CSR, which also answers the question where we should start with the CSR philosophy. On the other hand, however, conduct of employees and managers out of their workplace matters as well. Through their behaviour and publicly presented beliefs, what they actually do here is interpreting the corporate culture in private discussions and the media. Both the acquiring and the interpreting of the company´s philosophy and beliefs to the general public can be called the operational behaviour of the company´s employee. It redefines the meaning of the term operational behaviour. (A person who does not believe in the correctness and honesty of his or her act as part of the working procedure can hardly perform their funcions, advocate the company´s policy and assert its corporate culture in the public responsibly, safely and with stress on the quality.) Thus, interpretation of the firm´s corporate culture in everyday life of any of the firm´s employees represents a part of its philosophy that proves the company is not a foreign body in the region, but an integral part thereof developing its quality of life.

This is, nonetheless, a problem that permeates several spheres of the company´s management system and requires of the management to adopt taking a systematic look at the processes going on both in the company and the region. Utilizing the procedural approach to assess external and internal events and, last but not least, perceiving the need to understand the company-environment relation are of the essence. In other words, it is important to distinguish between external and internal synergic bonds and bonds between the company´s corporate culture, operational behaviour, job performance and social responsibility of workers and the management they have voluntarily adopted. The conclusion that can be drawn here is that any company about to carry out a change and being not in the process of preparing risk management in this regard belongs to a group of irresponsible companies as view from the CSR perspective. They do not know what may happen and what will most probably happen. Frequently, it comes to a marked decrease in social responsibility in employees and the general public which shows as the growing crime rate, social unrests, animosity between groups of citizens often exploding during cultural events and sports matches. 

The social responsibility in bigger companies conveys both their social and entrepreneurial image (in other words: their “face“ they turn towards the residents of the region and their customers) and the very substance of their enterprise and, ultimately, the comapny´s real mission. It aswers the following question: if we are a CSR company, “why we are here, what we want to do, and whether we really do it.“ If we do some hard thinking about the CSR topic just communicated, we will get space to draw a fact-based conclusion. Let us call it a socially-responsible certification of companies. So, there is a very serious, systematic and integral question to ask:

WOULD NOT IT BE MORE ADEQUATE TO CERTIFY COMPANIES WHETHER THEY COMPLY WITH CSR? fOR IT INCLUDES EVERYTHING AND IN AN INTEGRAL FORM.

If the company only aims at one sphere, the financial profit or the quality for instance, it does not send a good signal either to the general public or the market environment. Every intelligent citizen or customer will immediately think: “What is the firm doing to protect the environment, to maintain its processes safe, how does it dispose of waste, aren´t the profits made at the expense of the environment protection, or is the company a time-bomb with a potential to cause disasterous situations?“ Today we already know a whole range of companies boast about their ISO 9000/2001 certification, while economically being in the red. They lay off workers whom they have not professionalized and trained so that they can work in other positions. A well-prepared professiogram, thus, forms a part of CSR too. How can a company with certified management procedures work in such a way that the management, by using its audited documentation, brings the company to an economic collapse, ultimately having to “fire possibly all the employees and file for bankruptcy?“ Where are the risk management solutions, disaster scenarios prepared and the firm´s crisis management? Now we should ask about the company´s overall capability. Likewise, we could look for relations among all the spheres (chart 1) to establish what our company is like, what we want to do, how we want to do it and how we actually do it. Then the slogan **“this is our own way“** can hold true. 

The integral company management represents control of all the processes while considering all the company´s synergic connections at least within those aforementioned five areas (chart 1). It is just a note on the margin so that it becomes clear the synergism belongs to the common arsenal of every manager. As processes are controlled and implemented by people, the man will always remain the single dominating element of the integral management targeted at CSR. The question that is still essential today sounds as follows: “What is the ultimate aim of our civilization?“

In keeping with the above ideas, I am drawing a conclusion here that one of the dominating processes of the general process of enterprise (because even that is a process) is a decent training of employees and managers, their culture and education. The question is “in what and for what“? The question can again be found in chart 1 which is showing a necessity to prepare and improve employees in four essential areas of social responsibility – professionalism, conformity, socioablity and psychoability.

In view of the fact the above is quite a new sphere, it requires a much larger information transfer than can be provided by this short article which is just an outline of the entire problem. If you have queries and comments, feel free to contact author.

Vladimír Horáček

Comments on the article

Specialization

Method

Norm

Advisors

Advisor ideas

„A consultant accompanies the customer only as far as they have reached the point of understanding.“ more >>

Jiří Střelec Jiří Střelec

A consultant definitely is not someone who is going to live their customer´s life for them. He or she is acutally an outside intruder who is supposed to watch the company´s current situation without emotion and impartially seek the best ways leading to the customer´s success. The ways are subsequently brought to the customer to choose from. Then he or she may oversee the customer´s journey along the chosen path until the client has positively understood the course of action and been able to continue on their own.