Analytics, EU – Baltic States, Good for Business, Legislation, Markets and Companies, Society

Various definitions exist as to the CSR’s concept: e.g. “continuing commitment by business to behave ethically and contribute to economic development while improving the quality of life of the workforce and their families as well as the local community and society at large” (Lord Holme and Richard Watts in The World Business Council for Sustainable Development’s publication ‘Making Good Business Sense”). Hence CSR is often called corporate consciousness or sustainably responsible business.

CSR is one of the newest management strategies where companies try to create a positive impact on society while doing business. While it is difficult to make a clear-cut CSR’s definition, argues popular web-source (see: http://en.wikipedia.org/wiki/social_responsibility), a business dictionary defines CSR as “a company’s sense of responsibility towards the community and environment (both ecological and social) in which it operates”.

With these wide-sketched definitions, there are presently appeared some CSR’s co-habitations, e.g. fair-trade concept, eco-products, green-growth, etc.

See: http://www.businessdictionary.com/definitions/corporate-social-responsibility.html and

http://en.wikipedia.org/wiki/Corporate_social_responsibility.    

The term became popular in the 1960s and has remained as a notion to cover moral (sometimes legal) responsibility towards new approaches to “social business”.

Corporate Social Responsibility: good both for image and profit

The conference’s panelists reflecting CSR’s strategies, e.g. Falk, Lynggaard, Bella Sky, Coop and Inception have shown that goods and services delivered can be of good quality, have positive impact on customers and society at large. Of course, every company has different CSR objectives and strategies, though the main motive is the same. All companies have two-sided approach –inwards improvement (that is the management of people and processes) and outward improvement (that is an impact on society’s interests). Both factors are important as they reflect a company’s activity concerning its impact on social agenda, environment quality, sustainability, growth and jobs, etc.  

Recent financial crisis (already in its five-year’s run) necessitated new “rule of the game” –both for business and for governments: “liberalism” becomes more regulated.

And so it s for globalization: even small undertakings are becoming globally active! More than that: so-called industrial society is actively turning on into a “network society” with a completely new set of rules for participants.

CSR in this regard is making good progress showing how to create additional energy (as well as values) in corporate strategies and provide for meaningful (as well as rewarding) working conditions. Bottom-line: corporate social responsibility as a new set of rules will here to stay.   

Business vs. ethics

It is trivial to mention that entrepreneurs’ main purpose is “searching for profit”; literally, they do not have moral obligations. Pure business approach is earning money! If a state wants to do something about the ways business is done, the governments stick to laws and regulations.

However, slowly and slowly (since 1960s), another dimension emerged in a company’s profile, i.e. social responsibility, which in fact is also about rules and values, more apparently, values.

It is no wonder that the new EU basic law (Lisbon Treaty, 2009) in its first articles mentions EU values! Neither society, nor a state can function without social values; and so is it for undertakings: social or business values shall be developed accordingly.

And as Nordic states have shown, it is not a luxury; it is a necessity if the whole society shall develop progressively.  

Strange enough, businesses can use ethical decision-making in line with CSR to secure governments involvement into their operations.

A significant element of current CSR’s understanding is a progressive “self-regulation” (rather than the market-government mechanisms). Most rules and regulations as the result of overwhelming national policies are out of ethical reach. Thus, in financial sector respect for shareholders interests often tarnishes CSR.  

As soon as proponents argue that corporations increase long term profits by operating with a CSR perspective, while critics argue that CSR distracts from business' economic role. Actually, a 2000 study compared existing econometric studies of the relationship between social and financial performance, concluded that CSR has a neutral impact on financial outcomes.

(http://en.wikipedia.org/wiki/Corporate_social_responsibility).   

Some questioned CSR as a “lofty, even “unrealistic expectation”, claiming that CSR has been merely an attempt to pre-empt the role of governments as a watchdog over powerful multinationals: the latter often do not pay taxes…

CSR is seen as a managerial instrument within a company’s mission towards consumers. Alongside moral and ethical issues in CSR, there are accepted CSR’s international standards, such as ISO 26000 or a Danish one -DS490001. 

Critics argue that CSR is not connected to the fundamental economics in business; others argue that it is nothing more than superficial window-dressing. Still some say that it is generally an approach used by rich countries, such as those in North Europe and Scandinavia.

In fact, CSR is seen as an additional tool to streamline a welfare society: Nordic model reveals positive results of CSR on corporate strategies.

Nordic business model and CSR

Business models explored in Scandinavian states are famous both in the world and in Europe: trends towards welfare society provides for “happiest people in the world” (e.g. in Denmark) or extensive environment and nature protection in Nordic states. One can call it a “social contract for prosperity” which turns to be part of corporate culture while ethics-making CSR being an integral part of responsible business.  

Three case-studies presented at the conference have shown that CSR policy often represents a self-regulatory mechanism where business ensures active compliance with the rule of law and ethical standards.  In this way, CSR embraces both responsibility for corporate actions and encourage a positive impact on the environment, consumers, employees, investors, etc.

In short, a Danish regional leadership group in North Zealand undertook a good initiative in discussing CSR’s role in companies and business communities (see www.lederne.dk; chairman Henning Brænder).  

Wouldn’t it be appropriate to make such a conference in the Baltic States?