CORPORATE SOCIAL RESPONSIBILITY – FACTORS OF PERFORMANCE AND COMPETITIVENESS SVOČ – FST 2008 Marcela Srchová, West Bohemia University, Univerzitni 8, 306 14 Pilsen Czech RepublicABSTRACTCorporate Social Responsibility (CSR) represents not just successful enterprise but also thinking on social andenvironmental aspects. Corporations must include the social and environmental aspects to the activities which leadtowards making profit. Corporate Social Responsibility answers the requirements of both the customers and personswho are co-operating with them in business activities. Corporate Social Responsibility positively affects the whole ofsociety and regulates its impact on the environment.Corporate social responsibility is a concept. It is a way of managing a company and making relationships with partnerswhich contributes to improving the reputation and credibility of a company.This paper presents the issue of Corporate Social Responsibility with its characteristics, assets, advantages anddisadvantages.KEYWORDSCorporate Social Responsibility, performance, competitiveness, environmentINTRODUCTIONThe concept of CSR was established in the 1950s. It is a way of managing a company and making relationships withpartners which contributes to improving the reputation and credibility of a company. The European Union supportsCSR activities in the Europe. This issue has been worked on since the 1990s. The European Union uses CSR as a toolfor achieving tenable and acceptable growth.CSR DEVELOPMENTThe development of CSR is discussed from the second half of the 20th century. The year 1953 was a breakthroughbecause the book Social Responsibilities of the Businessman  was published. Bowman first defined socialresponsibility in this book. His definition is more about the responsibility of the businessman than the responsibility ofthe company. But his definition is still valid: “… to realise such procedures, take such decisions or follow such ways ofbehaviour which are required for the goals and values of our society.” The problem is that his definition and othersinsufficiently identify the requested behaviour of the businessman and company.The following idea became very popular in the 1960s: a company has not only economic and legal obligations but alsoobligations to society. If a company does not follow these obligations to society, society can close down or limit theenterprise. The problem here is that the idea does not define who or what is a part of the company. The answer is thestakeholders’ concept. Developing the stakeholders concept started at the beginning of the 1970s.CORPORATE SOCIAL RESPONSIBILITYDeveloping CSR takes a long time. There is no simple definition because CSR has no definite limits and it is voluntarilyestablished. It is a trend which is focused on the change from short-term tasks to long-term tasks.CSR companies´ behaviour is such that inside needs and outside needs are covered. They contribute to tenable andacceptable growth and generally help to improve the overall situation of society. CSR integrates the attitudes, practicesand procedures into the company strategy at the highest level of management. It requests a change from the “profitonly” level to the wider level “three Ps – people, planet, profit.” The triple-bottom-line means that the company isfocused on economic growth and environmental and social aspects of its activities. The company is a part of society andsociety influences it.
There are a lot of definitions of CSR but here are the most well-known: • “CSR is a voluntary integration of the social and environmental aspects in the everyday company activities and relations with the stakeholders,” . • “CSR is a way of an enterprise which follows ethical, legal, commercial and social expectations,” . • “CSR is a continual obligation of companies to be ethical and contribute to economic growth and at the same time improve the quality of employees´ lives and their families and local and global society,” .The definitions show that they are not fixed. The reason is to provide flexibility to companies for their use.THREE FUNDAMENTAL PRINCIPLES OF CSRCSR is based on three fundamental principles. They are economic, social and environmental. Each part of CSR containsa lot of different activities depending on the type of enterprise and the requirements of stakeholders.Economic areaTransparent enterprise is expected from the company. A positive relationship with investors, customers, suppliers andothers business partners is also expected. The impacts of the company on the economy at local, national and globallevels are monitored. Economic area - Market • Owners and investors • Customers / consumers Stakeholders • Suppliers and other business partners • Governmental institutions • Media Table 1: Economic area - stakeholders Economic area • Ethical codex creation • Transparency • Best practice management • Corruption rejection CSR activities • Relation with stockholders • Relation to customers / consumers • Relation to suppliers • Relation to investors • Protection of intellectual property Table 2: Economic area – CSR activitiesSocial areaIn the social area, behaviour is focused on the attitude to employees and on supporting the local community. Thecompany influences the standard of living, health, safety, education and cultural development of citizens. Social area Area Working environment Local community • Employees • Non-profit organizations Stakeholders • Unions • Public Table 3: Social area - stakeholders Social area Area Working environment Local community CSR activities • employee health and safety • Corporate donorship • Developing human resources • Corporate volunteerism • Follow working standards, • Support for social integration abolition of child labour • Equal possibilities • Education of the public
Social area • Work – life balance • Support of employees´ life quality • Workplace diversity • Developing employment and local • Support for laid-off employees infrastructure • Job assurance Table 4: Social area – CSR activitiesEnvironmental areaThe company is aware of its impact on the living and inanimate nature in the environment. This includes the ecosystem,land, air and water. There is an assumption that the company will protect nature and natural resources. Environmental area – Environment • Environmental groups Stakeholders • Other environmental groups Table 5: Environmental area - stakeholders Environmental area • Environmentally friendly manufacturing, products and services • Compliance with regulations and standards (ISO, EMAS, etc.) CSR activities • Environmentally friendly company policy (recycling, using of environmentally friendly products) • Reduction of impacts on environment • Protection of natural sources Table 6: Environmental area – CSR activitiesMAIN FEATURES OF CSRMain features of CSR are: • Triple-bottom-line – economic, social and environmental. • Voluntary – all activities are done voluntarily. • Stakeholders dialogue – integration of all participants. • Long-term period – all activities are done over a long-term period. • Credibility – increasing company credibility.THE SITUATION IN THE CZECH REPUBLICA survey on the topic of Corporate Social Responsibility was carried out by Business Leader Forum in 2003, . 265companies from the Czech Republic were approached in this survey. The task was to get answers to several mainquestions.The results of the survey indicated that activities in CSR were established but they were very often called by differentnames. The conclusions of the survey are summarized here. The CSR issue is understood more intuitively in the sense“social responsibility = good product or respect for laws.” Almost all companies considered being a part of society to bean important role for the company. This role does not have to be the main mission of a company. The internaldimension of CSR is the most used now and will also be in the future. This means; care about the employees, theireducation, their hiring and keeping. The external dimension of CSR is focused on transparency, relation with schoolsand ecology. The relationships with other subjects (non-profit organizations, state, and donations to charity) are minor.In the future, companies will want to extend their activities, especially inside the company.On the basis of the survey, it is clear that it is important to explain the concept of CSR. It is important to give it adefinite content. CSR must be understood more actively than intuitively, must have a more local attitude than global, itscontributions to socially responsible behaviour must be communicated and must be listed good and bad examples ofcompanies and discussed.
ADVANTAGES OF CSRResponsible behaviour is advantageous, brings a lot of benefits, especially non-financial, which are also very importantfor successful enterprise. CSR advantages • Higher reputation of company, better company image • Higher attraction for investors • Good reputation and strong position in market • Distinguish from rivals • Increasing employees´ productivity and loyalty • Attraction for quality and talented potential employees • Decreasing expenses on risk management • Direct financial saving – ecological behaviour • Better relationships with local society and public institutions Table 7: Advantages of CSRCSR does not bring advantages only to big companies, small and medium sized companies can also gain someadvantages. They are: easier recruitment of employees and business partners, good public relations, possibility ofgetting contacts and information from society and from main business partners.MEASUREMENT OF CSR BENEFITSCSR is an investment in the assets of the company. It is possible to measure them by indicators over the long-termperiod. It brings financial profit to the company. Assets Evaluation by indicators Long-term measurement aspects • Questionnaires • Strengthening market • Brainstorming position • Reaction in media • Possibility of new Good corporate reputation business opportunities • Possibility to gain environmentally friendly and sensitive customers • Interviewing customers • Strengthening market Customers satisfaction and • Number of repeated orders position faithfulness • Number of complaints • Turnover increasing • Number of product or services • Expanding products Company flexibility modifications • Increasing of market • Added value of products or portion services • Interviewing employees • Higher employee • Number of absences motivation, content and Employee qualifications • Number of qualified employees performance • Lower employee and satisfaction fluctuation • Higher possibilities for recruitment • Energy consumption • Possibility to gain huge • Proportion of recycling waste contracts Environmentally friendly • quantity of exhaust • Possibility to gain company culture • quantity dangerous materials used environmentally friendly customers • Increasing eco-efficiency Table 8: Measurement of CSR benefitsCONCLUSION AND RECOMMENDATIONSAt the beginning I posed a simple question: “Why follow the requirements of CSR?” A lot of businessmen know verywell that they must do good things. It means not only behaving well towards customers and business partners, but also
taking care of their employees and good relationships with their neighbours and protecting the environment, etc. Why?Being a CSR company opens new business challenges and brings competitive advantages.REFERENCESA Paragraph in the expert Journal: CARROLL, A. B. Corporate Social Responsibility – Evolution of a Definitional Construct. In Business and Society,Vol. 38. No. 3, 1999, p. 268-295, Available ProQuest 5000.A Book Publication: European Union, Green Book, 2001.A web page: http:// http://www.blf.cz. http://www.csr-online.cz. http://en.wikipedia.org/wiki/Corporate_social_responsibility.