public institutions as actors in Corporate social responsibility (case study romania)
Felicia Cornelia Macarie[1]
Simona Claudia Creţa[2]
Ioana Alexandra Tuţă[3]
Abstract
Corporate Social Responsibility (CSR) is a concept regarding businesses’ contribution to the development of modern societies. Businesses’ social responsibility refers to companies’ involvement in communities’ life – in their social and environmental problems. CSR concept includes more elements, like assuring equal opportunities, continuing training of personnel, the impact of business’s activity over society, concern for the environment, etc. In Romania, corporate social responsibility represents an area that has begun to develop only in the last few years.Local communities may use CSR as a tool in order to involve active local businesses in community’s life. The organizations that represent the community have to identify the most important aspects of the public agenda and present them to the businesses in order to obtain their support. Local communities have needs that businesses may satisfy by using local communities’ resources. In that way, there will emerge mutual relationships at a global level, between institutions, businesses, and local communities at different levels. It is obvious that relationships between businesses and communities are mutual profitable, each need the other part to carry on its own mission.Our research is based on a survey realized by Chamber of Commerce, Industry and Agriculture Bistrita-Nasaud, a survey on the North-West Development Region’s organizations, Romania. There were questioned 50 companies, 22 active non-governmental organizations and public institutions. The questions were centered on the following aspects:
- The level of organizations’ involvement in communities’ life;
- The level of the concept implementation in organizations;
- The main interests or needs of the organizations;
- The motivation for implementing this concept in organizations.
Our research showed that corporate social responsibility is considered more like an orientation, somehow imposed and not a voluntary intervention for solving community’s problems. Public institutions pay more attention, with respect to their activity area, to community, environment and labor market: social integration, education, local infrastructure, waste disposal, personnel training, and public health. The instruments mostly used by public institutions are also related to community and labor market: participative decision – making process, partnerships, free services, and employees’ volunteering. Although they did not integrate in their organizational vision the CSR’s principles, public institutions declare that they involve in a greater extend than specified in legislation. In spite of the fact that most of the organizations have met it eventually, the meaning of corporate social responsibility concept is still unclear for public institutions from The North-West Development Region.
1. Introduction
Corporate social responsibility refers to involvement of organizations in communities’ life – in their social and environmental problems. CSR’s actions are direct connected to anorganization’s reputation and that for, to its market competitiveness. CSR concept includes more elements, among are the following: assuring equal opportunities, assuring continue training of personnel, the impact of company’s activity over society, company’s reputation, brand and marketing, ethics investment, concern for the environment, and ethics in corporate government.
Local communities may use CSR as a tool in order to involve active local business in community’s life. The organizations that represent the community have to identify the most important aspects of the public agenda and present them to the business in order to obtain their support. Over time, this concept was theorized in different manners by thoughts trends. “Responsible” initiatives of the businesses were named using a large variety of terms: corporate citizenship, corporate philanthropy, corporate societal marketing, community affairs, and community development. As states and international institutions realized, the adoption of CSR’s principles by businesses will serve sustainable development objectives; it emerge the necessity of some international standards in order to define what “desirable corporate behavior” means. United Nations Organization, European Union and Organization for Economic Co-operation and Development are three of the most important institutions that involve in elaboration of a framework to define CSR and establish indexes that may be used for a transparent evaluation of organizations behavior.
To this framework were annexed recommendations and principles/guidelines to guide states and local authorities in public policy making process, policies that will promote, assure transparency and sustain CSR’s initiatives of the businesses activating in different areas. The relationships that emerge between these institutions and communities, or businesses, are shaped by guidelines and recommendations offered by international institutions to national institutions; the last ones establish, also, judicial rules and recommendations used by local institutions to establish other administrative decisions that will operate in companies and local communities. Local communities have needs that businesses may satisfy by using local communities’ resources. In that way, there will emerge mutual relationships at a global level, between institutions, businesses, and local communities at different levels. It is quite obvious that relationships between companies and communities are mutual profitable, each need the other part to carry on its own mission.
At present, in order to demonstrate that an organization is “social responsible” it must understand first CSR’s principles, promoted at an international level and also periodic report about the integration of these principles in its activities.
2. CSR framework and indicators for responsible behavior
2.1. European Union
European Union is interested in CSR, which is seen a way for achieving the objective established by the European Counsel in Lisbon 2000, “become the most competitive and dynamic knowledge-based economy in the world, capable to sustain economic development by creating more and better jobs and greater social cohesion.”[4]In Lisbon Strategy, European Commission shows that corporate social responsibility represents a contribution to sustainable development, and to achievement of Strategy’s objectives. “Voluntary business initiatives, in the form of CSR’s practices, can play a key role in contributing to sustainable development while enhancing Europe's innovative potential and competitiveness”For guiding business in its CSR’s implementation, E.U. elaborated, also, a list of principles. These hint at two dimensions of business - community relationships:
- An internal dimension, in which organizations have the following responsibilities (in its relationships with employees):assure a health and safe work environment and the improvement of the quality of the employees’ life, be responsible whenrestructuring in crises, taking into consideration all sides’ interests, and minimize the impact of their activities over the environment and natural resources.
- External dimension, in which business should (in their relationships with all stakeholders): support the development of communities where they run their activities and the development of local economic systems by concluding partnerships with local distributors, respect human rights, and protect and encourage environment protection at a global level.
The stage of CSR’s implementation by European organizations is reflected in documents enacted by European Union institutions. All European countries have the same objectives: promoting dialogue with stakeholders and public-private partnership; transparency and credibility of CSR’s instruments and practices; dissemination of the best practices; assuring a strong and consistent connection between the support of development’s objectives and public policies.
European Commission established its own policy regarding CSR, and defined social responsibility a business’s voluntary decision to contribute to a cleaner environment and a better society. As SMEs are predominant in EU economies, the Commission promotes and encourages with priority CSR’s actions among SMEs. Even admitting corporations as a centre for CSR, EC underline the importance of non-corporations actors in CSR area: “without an active support and constructive critics of non-corporations actors, CSR cannot have success.”
In Commission’s Communication we may identify eight priority areas in CSR future sustain: awareness-raising and best practice exchange, support for initiatives with more partners, cooperation with Member States, consumer information and transparency, research, education, SMEs, and international dimension of CSR.
CSR Europerepresents the most important European corporation’s network for social responsibility; this network includes more than 60 prestigious multinational corporations.
2.2. Organization for Economic Co-operation and Development (OECD)
Organization for Economic Co-operation and Development (OECD) has a mission to support member states to achieve sustainable development in economic fields. For coordinating businesses’ actions in order to achieve sustainable development at a global level OECD elaborated in 1976, “Guidelines for Multinational Enterprises” , a set of principles that should be considered by any business, no matter by its activity field, with respect to human rights, environment protection, consumers’ interests, corruption and concurrence. In 2000 was published a revisited form of the “Guidelines for Multinational Enterprises”[5] according to which business should: Contribute to economic, social and environment development, promoting sustainable development; Respect human rights in all its activities;Encourage the development of local communities; Not accept exemptions not included in local judicial framework with respect to the environment, health, safety, work and taxes; Support and apply principles and equitable practices for running a business; Develop and apply efficient management systems in creating a trust relationship with the societies they activate in; Promote the business values among employees through training programs; Not discriminate and not sanction the individuals or institutions that signals incorrect practices to the management teams;Encourage their business partners to apply “OECD Guidelines”; Not involve without justification in local political activities.
European Union and OECD member states’ governments support the principles enacted in “Guidelines”. Many businesses around the world elaborated codes of conducts in which they integrated the principles from „Guidelines for Multinational Enterprises”. Such examples, of commercial and non-profit organizations from over 20 countries are presented by OECD[6] as good practices examples that may inspire other organizations from all around the world.
2.3. United Nations Organization (U.N.)
Global Compact represents a U.N. General Secretary’s initiative to create a partnership between United Nations and various businesses for supporting sustainable development at a global level. The program became operational in July 2000. Global Compact represent a network formed by United Nations’ agencies, companies, labor unions, academic organizations, civil society organizations, governmental or administrative institutions, that act like a guide for CSR oriented businesses. The program includes action guidelines of the businesses and 10 universal principles, divided in four areas, like following:
Human Rights;
- Labor standards (freedom of association, the elimination of all forms of forced and compulsory labor, effective abolition of child labor, elimination of discrimination in respect with employment and occupation);
- Environment (precautionary approach to environmental challenges, promote greater environmental responsibility, development and diffusion of environmentally friendly technologies);
- Anti-corruption.
U.N. recommends all businesses to embrace Global Compact principles in their strategies and to promote them in all areas.
3. CSR’s instruments
The questions draw by are: what should do a business right? What is the motivation? The answer is quite pragmatic even if the “good” is not always associated with pragmatism. Businesses that apply the concept of social responsibility and make “good” for community have an indirect gain that may materialize in: improvement of brand position and business’ image to clients, increasing capability of attraction and retain of the employees, diminishing operational costs, attraction of investors and respect from financial analysts. What actions make a business to be social responsible? One of the most complete typology of these kinds of actions belongs to Philip Kotler and Nancy Lee[7]; they identify six types of actions by which a business become social responsible:
3.1. Cause Promotionthrough financial and material contributions, without any connection with its own activity for increasing the rename, and public preoccupation for a cause, or mobilize public to donate, participate or act voluntarily for supporting a cause. The main organizations’ contribution represents financing and implementing communication campaign. If there results funds or any other goods, these will be taken and managed by one or more partners (public institutions or nongovernmental organizations).
A cause’s promoting campaign may provide good results, such as the “birth” of public interest in a cause, public want to find out more about a cause, public may want to use his/her time for a cause, public may donate money or other goods for a cause, public may participate in a way or other to support the cause.
Businesses may use this kind of actions when they have interests, such as the desire to highlight their brand and the need of more consumers, they want more visibility and they think that will be successful if opinion leaders will speak about their acts. Thus, it would be better if were a close relationships and they ask for feedback from journalists or other opinion leaders. Media impact of the campaign will rise once these leaders will feel their involvement and that they may control the results too. Also, this instrument will be used if businesses have resources only for a limited involvement in resolving the issue. For resolving a social issue some needs a long period of time and there are high costs; that’s the reason why there are two stages: first, problem awareness and second, joint action of more social actors in order to change behavior or correct a system deficiency. Even businesses has not enough resources for the both stages, its involvement in first stage may produce big changes. This may be realized by using sincere messages and actions that will convince the public.
3.2. Cause Related Marketing. The business obliges itself to cede a part of its gains to an NGO or charity organization. Normally, a CRM (Cause Related Marketing) business implies an “offer” available for a particular period, it refers to a particular product, and it is realized for the benefit of an NGO, or other partner, that enjoy legitimacy regarding that cause and capability to manage the money.
A CRM campaign provides the best benefits for all the sides - consumers may contribute to NGOs or the cause they adhere, NGOs gain easy money, and the business increases its sales and creates a strong connection between the brand and consumers.CRM campaign is used by the businesses that have products for a big number of consumers, have good, big distribution channels, and needs to differentiate their products from the concurrence.
For realization of a CRM campaign there need to be solved some problems regarding capability evaluation of the business marketing department, that has to offer support for the realization of the campaign plan, establish focus markets, realize and implement communication, establish and apply assessment instruments; and choose the proper cause, a cause attractive for a large number of people. These kind of cause may be regarded to major health issues (cancer, AIDS), issues affecting children (education, domestic violence, discrimination), major social issues (natural disasters, poverty, housing), environmental issues.
3.3. Corporate Social Marketingproduces achange in individual’s behavior in a favorable way to public health, environment protection or other comparable cause. Even during the program tactics used are aimed to increase information or educational level, the main objectiveischanging the behavior. Such a campaign hints at the behavior that should be related to major issues of the society. People are negativist when somebody try to change their behavior, that’s the reason why a social marketing campaign should be justified, the problem approached by the campaign should affect a significant number of people and its solving should be urgent; people have to be convinced that if someone would not change his/her behavior the risks would be great. The most encountered problems of this kind regards threats to somebody’s life or security (traffic safety, domestic violence, natural disasters prevention, accidents prevention, etc.), health (breast cancer, alimentation diseases, diabetics, heart diseases, HIV, etc.), environment (pesticides utilization, air pollution, recycle, natural reservations protection, etc), civic involvement (volunteering, vote participation, blood donation, crimes preventions, etc.).
Social Marketing Campaign is proper when there is a connection between the business’s framework and social issue. Choosing a problem and a behavior that has to be changed should take into account business profile and its marketing model. A reason for doing for social marketing campaign is the issue approach and it should be very important for clients. This instrument may be used also when businesses want an economic increase of their sales, as a follow of the behavioral changing. A direct interest in promoting a particular behavior may affect credibility, a reason for most of them preferring to realize the campaign not on their selves but sided by an already established public initiative. Association with credible institutions or organizations brings about more legitimacy and guaranty that the cause is for society’s interest not only businesses’ interest. In order to produce proper results, a business should choose a small focus group that has the most to benefit following the changes but who act like leaders for larger groups (choosing a specific and not general behavior will lead to a certainty that it is hinted the way the public want to be followed by the business), identify the obstacles and benefits, and prepare for a long-term commitment as behaviors are changing very hard and it takes time and patience.