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Corporate Social Responsibility. Monograph

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solution, they create something new: the new way of financial support, rendering services, production of goods and so on. In addition to the social mission, the global idea is characteristic for foreign social enterprises. The social enterprises in abroad run in several directions: microfinance and employment, rendering services for socially unprotected groups of the
population and etc. Foreign social enterprises don’t depend on external
sources of financing. They serve as the additional resource of their activity.
The activity of Russian social enterprises is directed on the creation
of the definite social value, but they don’t lose sight of the economical
value.
External sources of financing are the main resource of their activity that brings into a question the stability of a social enterprise. The idea of the problem solution of the local scale was taken as a basis of the activity of a social enterprise in Russia. In other words, the global idea and the opportunity of replicability and scalability is absent that brings into a question of effectiveness of the enterprise activity in long- term perspective. The main branch of activity of a social enterprise is the job placement of disadvantaged social groups, in particular of disable people.
Advantages of social entrepreneurship imply the opportunity of the use of various business- models, the use of uncommitted resources in
economy, the creation of market environment there, where it hasn’t been
absent yet, combination of harmonizing the interests of a society, business and the state, orientation on local conditions.
Social entrepreneurship can be interested to companies, which seek to social responsibility of business. For example, companies can assist to the development of social entrepreneurship through the improvement of conditions of depressive territories.
Any improvement will benefit both the local community as well the company. For example, it will stop the outflow of young people and will help to solve infrastructure problems.
It is evident, that social entrepreneurship is one of the social programs which is necessary to solve in our society. Entrepreneurs of Russia support this direction because they are oriented themselves on the effective sustainable development as their own business, as and the country in a whole. The great intellectual human resource is hidden in social entrepreneurship. This can significantly influence on more stable life, the solution of social problems, future population of Russia. Besides it, it is a good field for consolidation of resources, business of different levels, society and power. It is very important that it will not only the decision of pressing social problems but effective collaboration about reformation and improvement of the society prosperity.
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Social entrepreneurship is the definite stage of relations development between a society and business. These are enterprises, which differ by three peculiarities: their activity promotes to the decision of a social problem, they are innovative (present the new service, the product or the business model) or economically sustainable that is provided by sales of goods and services.
Such form of CSR as “dobrovolnichestvo” evolves in Russia. This
is the system of labour relations, built on the mechanism of moral encouragement and other socially useful objectives. It is necessary to approach individually to engaging of volunteers taking into accounts motivation and personal characteristic of employees. Among them can be: altruists– are employees, experiencing the need for the restoration of “the
vital justice,” sympathizing to problems of other people and wishing to
provide all possible assistance.
Egocentics– are the employees, wishing to be realized and to use their potential, seeking to receiving of social approval or looking for the opportunity to help to other people. The realization of this desire allows to a volunteer to fill his life by additional meaning, to help to be realized and to get the deep moral satisfaction.
Social entrepreneurship is just starting its way into Russia. However, Russian society has a positive attitude to this concept. It is gratifying to emphasize that the majority of Russians recognize the need for the existence of organizations which put the main objective for themselves not to maximize profit, and the solution or mitigation of social problems.
The present examples of social entrepreneurship allow to speak about future perspectives of this direction in Russia. There are about 6,8 thousand enterprises, having the social focus.
Most of them don’t identify themselves as the social enterprises,
largely due to the lack of information on this subject.
The separate and exceptionally important problem of social entrepreneurship is the absence of adequate regulatory affairs. The
legislative base hasn’t been established yet, which would regulate the
activities of social entrepreneurs. They have to work on a general basis that reduces their opportunity in solving social problems definitely [25].
As a rule, Russian companies perceive the social activity as the source of informational reasons for increase of their own image and formation of public relations in activity regions. In some case, the choose of priorities for identifying spheres of social activity depends on the attention of community and on the personal preferences of a company. Not all
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Russian companies have come to understanding of necessity of informational openness. In Russian companies the activity in the CSR sphere has not the high status in many cases and realizes as secondary activity on the level of department managers and directors.
In spite of enumerated lacks of an organization of social activity of domestic companies, important changes have recently occurred and several positive tendencies were noticed in this sphere. In particular, coming to the Russian market CM, which is one of the leaders in the sphere of CSR, and can lead to that the most progressive branch will be the oil branch from the view of CSR. The image of a socially responsible company becomes more popular.
The number of companies increases, which understand that CSR is not only an image, but and investments which will be recompensed in long term outlook or in the future, but not in a plan. It is very important that the state has perceived the necessity of the support and stimulation of socially responsible enterprises.
It is necessary to notice that the formal characteristic of CSR is voluntariness, in other words entrepreneurs, understanding the responsibility in front of internal and external environment of their enterprise, share their profit with society voluntarily. Corporative social responsibility can be classified on the base of different criterions. So, internal (responsibility of an organization in the sphere of socially labour relations) and external CSR (responsibility before the population in a whole and different groups of community: consumers, investors, stockholders, bodies of power, social organizations, media) is marked out depending on the target group.
In order to build the logic scheme of the socially responsible behavior of any organization, it is necessary that CSR was not unidirectional and found the balance and respected the interests of internal and external groups. In accordance with the criterion of length, CSR is divided on short-term (to 6 months) and long-term activity (from 6 months).
Long-term programs are directed on the decision of the important public problems, chosen by an organization as priorities. These programs, as a rule, are in operation during of all existence of an organization and give the large economic effect in future, promote to strengthening of financial stability and increasing of competitive capacity of an enterprise, create the positive business reputation for it.
The short-term programs of social responsibility are presented as the single entry activity of an organization. The shortness reason of
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strategies orientation of organizations development is deficiency of funds, which doesn’t allow to entrepreneurs to invest in long-term projects. Social investment has the additional expenses in the short-term period, and accordingly, some loss of the competitive edge can be observed. Only in the long-term perspective social investment can benefit, because the more attractive image of an enterprise is formed gradually at suppliers and the local community.
In such a manner, only the most successful enterprises can allow long-term socially responsible behavior first of all which have necessary resources and serious competitive positions for it. The long-term socially responsible behavior must be stimulated both by the state and by the civil society for distribution it in the business environment [26].
In accordance with the model of M. Poparter and M. Kremer [27], corporate social responsibility can be responsive and strategic. The responsive CSR is directed on palatalization of having problems and negative consequences of the company activity. The strategic CSR provides building of the idea of social responsibility in the strategy of a company and orientation on creation of long - term competitive positions.
The development of strategic СSR the most corresponds to the passage from logic of “social expenses” to logic of “social investment”. In
the opinion of researchers, formation of corporate social responsibility in Russia is on the primary stage in the modern period. We can meet only separate attempts of realization CSR in the activity of domestic organizations, such as social benefits for employees, separate examples of charity.
The biggest companies invest in social advertisement (for example, create rollers about the rescue of the environment and rare animals). However, a question about introduction of new standards of corporate responsibility with the orientation on the west model was raised in the connection with the exit of Russia on the global stage, strengthening paces of globalization, wish of domestic enterprises to get the foreign investment.
Besides the positive tendencies of corporate social responsibilities in Russia, there are several objective difficulties.
1. Only big national - wide companies and branches and child business units of international companies have the material opportunity to realize the policy of social responsibility. Small and Medium business for
various reasons don’t have the opportunity to contribute a lot of money for
the good of society. At the same time, the concept of corporate social responsibility of such companies is developed actively and is not limited by the singular charitable actions [28].
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2. Geographic position of the country and the ever-changing economical and politic situation in the country relates to negative factors. The great territory, low density of population, capital concentration in the big cities decreases the readiness to be a socially responsible.
3. The social passivity of citizens which is observed in all spheres of the public life can be also related to barriers on the way of CSR in Russia. Few existing structures of the civil society are created by the initiative of government institution, which are aimed to control them [29]. The public members demonstrate a little initiative. Employees criticize their employers very actively for unwillingness to decide the actual social problems, however, they are not ready to self activity themselves.
However, in the modern period of the society development, the activity of Russian entrepreneurs is directed on elaboration of clear and effective mutual relationship with government institutions and with the civil society through the active implementation of the CSR concept in the practice of the activity of their enterprises.
So, the Volgograd enterprise LLC “Svetozar”, which is engaged to
manufacturing and the sales of photodiode energy conservative sources of
light for the brand “OgonOK” relates to medium business, however, it
practices various forms of CSR very widely. The next programs are referred to internal programs:
health programs of the staff; Social support of certain categories of employees; staff training by the company; development of the public catering system; health resort treatment and staff rehabilitation. External forms of CSR of an enterprise are the next: environment protection (not only at the expense of abidance
of environmental safety measures of production but also due to regular enforcement of environmental protection measures);
the availability of sports club (provides services to citizens
at moderate price);
charity (renovations of schools in the city at the expense of
entrepreneurs).
Other examples of such activities include:
“The school of farmers”. This project is directed on the training of farmers from leavers of children’s homes of Perm. The participation in “the
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school of farmers” gives the opportunity to leavers of children’s homes to
earn money for living conditions, pursue a profession, feel yourself socially protected. Involvement in such project helps to form positive values, involves orphans in public relations. “The school of farmers” attracts young people to the work in a village and brings up the young farmers who are capable to transact the profitable business.
The project “The Armour suit” (LLC “New rehabilitation technologies “The Armour suit”). “The Armour suit” presents the
orthopedic system, which allows to a person with spinal cord trauma to
stand, to sit, to move without physical assistance. The project “The Armour suit” became the first social enterprises, which the Foundation “Our future”
has supported. The production of orthopedic systems was organized on the base of medical centre of the Russian state medical university.
The workshop “cheerful felt” (SE “Women’s organization of the social support “Woman, Person, Society”). The aim of this project is the
creation of the talent boutique in the production of designer’s toys­souvenirs and jewelry from felt in Ribinsk. Poor mothers with many children, who have not the opportunity to work at a full- time job and they need in a home-based job, take part in this project.
Obviously that Russian entrepreneurs are conscious of the need for social activity, and many of them are willing to invest in this additional funding. Currently, CSR is considered by Russian entrepreneurs as one of the most important areas that are directly associated with a single business strategy.
Modern entrepreneurs are beginning to develop the social direction of business dealing. One of the latest trends of CSR development in Russia is a social entrepreneurship.
Social entrepreneurship is just starting its way into Russia, however, Russian society is tuned positively to this concept. It is gratifying to emphasize that the majority of Russian people recognize the need for the existence of organizations which put the main objective for themselves is not to maximize earnings, and the solution or mitigation of social problems.
The special and vitally important problem of social entrepreneurship is the absence of adequate regulatory support. The regulatory environment, regulating the activities of social entrepreneurs, hasn’t been created yet. They have to work on general principles that reduce their opportunities in the decision of social tasks in a way.
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CORPORATE SOCIAL RESPONSIBILITY IN THE
MANAGEMENT SYSTEM OF THE ORGANIZATION
Currently, the corporate social responsibility of business is included into the area of a strategic goal-setting of many modern organizations. Russian companies are increasing the degree of integration in the economic processes in the context of globalization, which causes them to move towards increasing the transparency of corporate transparency, social responsibility and business performance. At the same time the concept of corporate social responsibility makes it possible for the modern organization to declare oneself widely in society, promoting its values and positioning itself as a reliable employer and progressive company. At the moment enterprises are implementing the concept of corporate social responsibility for different reasons and it is preceded by a variety of motives.
One is defined by A. B. Carroll [20] where she explains corporate social responsibility as a pyramid, including administrative responsibility, oriented to comply with regulatory requirements, to respect the ethics of the society and be a good citizen.
Other researchers suggest that, if the company uses the concept of corporate social responsibility in a more strategic sense, it can create competitive advantage [23].
In general, It should be noted that arguments in favor of implementing socially responsible behavior can be divided into two groups (fig. 11).
First, the entrepreneurs expect to receive certain benefits or advantages that form the active motivation, i.e. promote certain changes in the activities of enterprises. However, the importance played by the arguments, saying that the social measures are a key element in risk­management. These arguments form the reactive motivations, i.e. social responsible behavior is considered as means of preserving the reached stability [1].
The progressive business community understands that social responsibility will eventually become mandatory. This is just an intermediate state, and with the growth of business activity in the social direction of corporate social responsibility become an essential condition for the functioning of the business. To create a significant competitive advantage through this concept in the long term, it is necessary to begin already today. The strategy of social activities should be concentrated in areas with the most urgent problems, and where activity will be most effective.
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Thus, business and society are increasingly seen as elements of a single system, beyond which their effective existence is impossible. Social responsibility is more closely associated with corporate strategy, and the success of social initiatives is a prerequisite for future economic advances. The competition to the world stage, and enterprises which concentrate only on internal activities, will not be able to withstand the increased competition. Success can be achieved only those companies that transformed into organizational structures capable of acting responsibly towards society and the environment [13].
In connection with the foregoing, it can be argued that the requirement of socially responsible activities of the organization – a fact that cannot be neglected. The importance of this factor increases proportionally to the scale of the corporation and the number of markets in which the organization is engaged in business.
At the same time It should be noted that increase in the number of socially responsible companies contribute not only external challenges: requirements of social and environmental issues from stakeholders, – but also internal incentives, namely the introduction of a positive relationship between corporate social responsibility and financial performance of the company. That, in turn, proved by research M. Orlickiy, F. Schmidt, S. Raines, confirmed the presence of a positive correlation of socially responsible activities and financial performance of the organization2 [3].
In connection with the foregoing it should be noted that the economic benefits this concept arise due to the increased activity of the company in environmental and social areas and occur because of this synergy and is manifest in such areas as finance, marketing, sales, reputation management and risk management. In addition, in view of actively growing trend of socially responsible investment it is possible to say that following of the concept of corporate social responsibility significantly expands opportunities for attraction of investment resources, and also decrease in their cost. Ultimately, this results in increasing the sustainability of business and, therefore, improvement of indicators of activities of the company in a long-term perspective.
2
This study included a meta-analysis of 52 studies (total sample – 33 878 observations, collected over 30 years). Given the period covered in the work, and the representativeness of the sample, and the fact that a meta-analysis of studies received independent from each other by the authors, these findings can be considered objective.
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Review of literature. Economic and managerial aspects of this concept in the modern interpretation was put on the agenda relatively recently – in the beginning of the last century. Prior to this time period individual components of corporate social responsibility (for example, charity) dealt mostly with philosophical and sociological points of view. Currently, continue active discussions about its essence in scientific and business circles. In this regard, the theme of corporate social responsibility the past decade occupies one of leading places in the publications of such
leading international journals as «The Journal of Business Ethics», «Business & Society», «Business Ethics: A European Review», etc. In the leading domestic scientific journals, such as «Voprosy Ekonomiki», «Russian Management Journal» and others regularly publish articles on this
issue. It is also possible to state that there is a constant growth of the publications devoted to research of corporate social responsibility, its role in micro-, macroeconomic, public administration and management.
Modern research is preceded by fundamental work on the social responsibility of business the second half of the 20th century by such authors as G. Bowen, K. Davis, M. Friedman, A. Carroll and E. Freeman, who in turn rely on the classical ideas by J. Locke, A. Smith, M. Weber, T. Parsons and etc. Today, the study this concept is highlighted in interdisciplinary research direction, in which foreign authors consider such issues as sustainable development (J. Elkington, N. Finch, etc.), business ethics (Crane A., Matten D., etc.), corporate governance (F. Kotler, J.K.. Roui, etc.), interaction with stakeholders (M.S. Branco, S. Saks, etc.), the influence of international institutions and standards (G. Kell, B. Slob, etc.), regulatory issues (by L. Lewin, etc.), etc.
To the study of corporate social responsibility is growing interest in Russia. Thus, the domestic authors justified the relevance this concept in the Russian context and its role in the development of modern economy and society, adopted the international concept of corporate social responsibility, developed best practices, etc. Among researchers and experts who have made a significant intellectual contribution to the study of concept, it should be noted A.N. Shokhin, S.V. Turkina, S.E. Litovchenko, F.T. Prokopov, etc.
However, analysis of the literature shows that much attention is paid to theoretical issues, such as approaches and models, as well as a description of aggregate benefits from following the principles of corporate social responsibility. Often, however, these topics were submitted quite fragmented and with a bias in economic theory (and based on the
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neoclassical school), not managerial paradigm. In this article the concept of corporate social responsibility considered from the point of view of the theory of organization management.
Despite the fact that the term «corporate social responsibility» is
widely used in the framework of this article it is important to clarify its meaning. First, it should be noted that subject of corporate social responsibility is the commercial organization, understood as complete system of industrial relations and functioning for the sake of achievement of economic goals, and at the same time being part of the environment including a set of components on which its existence depends.
First of all, it is such groups as consumers, suppliers, media and public pressure groups, employees, shareholders and other interested persons who can influence the organization and experience its effect on
themselves (stakeholders). Given that the concept of «stakeholders», in
accordance with the approach of R. Freeman and D. Reed, can be used in the broad and narrow sense, we specify that here we use the term in a broad sense, referring to any identifiable groups or individuals who can affect the achievement of organization objectives or which may affect the achievement of the organization goals. It means that in addition to the direct purposes of care efficient use of resources, the organization appears a goals of balancing its interests with interests of these groups.
Secondly, the concept «social» is considered in the broadest sense
of this word and means an orientation on the solution of socially significant problems, including ecological, legal (for example, connected with streamlining of the labor legislation), etc. At last, availability of the term
«responsibility» means that the behavior of the company will entail certain
results, including material nature which positive or negatively will be reflected in indicators of profitability of business [4].
Thus, corporate social responsibility in the management system of the organization is represented by a set of expectations, rules and requirements, in accordance with which the company is liable to the society in which operates, i.e. in addition to the effectiveness, employment, profit and respect for the law, it must direct part of its resources and efforts on the development of society. From this it follows that corporate social liability it is possible to consider as special social and economic institute which regulates relations of the organization with concerned parties of external and internal environment.
At the same time, considering not only economic, but also ecological and social aspect of interaction of the organization and its
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