Introduction to CSR

Corporate social responsibility (CSR)

Spoločensky zodpovedné podnikanie (SZP) is Slovak equivalent of the corporate social responsibility (CSR).

History of CSR in Europe

The main reason of CSR origin was the issue how to do business well. It means, for the favour of the largest human community.

CSR occurs in 50-ties of the 20-th century, when its ideas were involved into professional literature for managers. That is why to date CSR definitions were based on managerial position.

The main changes in this area ocurred due to turbulent social turmoils and social sciences development at the end of 60-ties and 70-ties of the 20-th century.

In this period, lot of CSR definitions ocurred not based so strongly on the managerial position in the corporation. CSR was focused on the interaction between a company and the socio-economical system.

In 80-ties, the main interest was transferred from theoretical level to practical one. The empirical research was the principal importance of CSR. Former definitions started to break down and different alternative concepts were created, e.g. social performance of entrepreneurship, entrepreneurial ethics, public policy, stakeholders theory.

In 2002 the Sarbanes -Oxley law passed in the USA, stressing the transparent handling with financial data to report on company activities and to prevent conflict of interest as well as for auditing all these activities.

CSR will be defined in details by ISO 26000 standard to be published in 2008. This ISO standard was developped by Swedish standard institute and Brasilian technical standards association.

CSR definitions

CSR is a continual committment of companies to behaviour ethically and contribute to permanent sustainable development and to the improvement of employees life quality, their families, local community and society as a whole – INTEGRA

The term CSR expresses company relationships with its all participants involved: owners-investors, employees, public offices, suppliers, competitors, communities, customers, etc.

In July 2001, the EC published Green book which explains all what CSR means. Based on this book the CSR is a voluntary integration of social and economic interests to everyday's financial matters and interactions with company's stakeholders.

The term CSR is not yet fully defined and could be differently explained. The current definitions are based on on the principles of: neutrality, interest, active cooperation with subject involved and transparency. There are also other common characteristics: universality, voluntarity, focus on active cooperation with stakeholders involved and committment to quality life development.

CSR in Slovakia

The CSR idea started to occur in Slovakia together with transnational corporations in 90-ties of the 20-th century. Since the half of 90-ties few NGOs started to devote its effort to CSR development, e.g. Centre for philantrophy, PANET p.a., Integra Foundation, Pontis Foundation, Institute for economical and social reforms and Employment Institute Bratislava.

Each of them is working partially on CSR theme. In 2004 the Pontis Foundation has created informal Business Leaders Forum oriented to CSR principles.

The Employment Institute is a member of transnational cooperation with CEMA-NET and is participating in CSR development since 2005.

CSR strategy of transnational corporations in Slovakia

The profit generation is main interest of small and large companies by means of CSR. It enables them to reach the market stability locally. CSR is contributing not only to the environment protection but also to the quality life development of all Slovak citizens.

Foreign companies bring the CSR strategy to Slovakia from their parent companies. They easily adjust themselves to needs of Slovakia, to individual regions, social groups, and local community.

The philantrophy and charity keep the most important positions in most of foreign companies in Slovakia. They are focused in support of education, healtcare, culture, handycapped and socially marginal groups.

However, these activities are the very visible for these companies but are not the most important.

Avšak si treba uvedomiť, že táto oblasť je síce pre firmy najviditeľnejšia, ale zďaleka nie najhlavnejšia.

Stakeholders

This term means all persons, groups or organisations which have an impact to company operations or they are influenced by the company in reverse. In Slovakia, it is possible to label them as „involved subjects" and it is going on owners, shareholders, investors, employees, customers, suppliers, business partners, competitors, government, local self-government, NGOs, pressure groups, communities and media. Each of the somehow influence the business of the company. The expectations survey of those groups starts with stakeholder dialogue. This dialogue has obviously good results in case of serious process.

The strengthening of mutual trust, problems identification and solution, long term advisory in private, public and NGO sectors, mutual motivation and widespread of good practice are the outputs of such cooperation.

Why to be a socially responsible company

As it was already mentioned, the profit is the primary company goal. If besides it companies are able to add the interest in whole society operation and environment, they will bring benefit not only to the company but also to the whole society.

This will bring the higher reputation to companies and the increasing of employees' work productivity which will generate the primary goal – the higher profit.

CSR benefits

• risk management (in HR, quality products checking, environmental standards keeping, and safety against possible court problems and goodwill damage,
• helps to increase profit (they are more sympathetic to customers),
• helps to decrease costs (more effective financial sources use),
• increases long term company potential (by means of CSR supports not easily measurable growth conditions as a goodwill, motivation to be employed in the company, favour of local citizens and local government),
• supports the innovation (stimulates the innivative thinking and management),
• helps companies to keep the legitimity (CSR feels the company as member of the society consisting of stakeholders. The company is keeping the open dialogue with all, which means a transparency).
• helps in creating the trust and goodwill,
• enables better management of HR (remuneration, better combination of private and work time, career, trainings, education, antidiscrimination),
• increases the attractivity for investors (investment funds prefer the opportunities based on financial, economic, social, environmental and ethical factors – CSR criteria mean security and sustainability for the company).

SR consists of effective and responsible approach to investments for the company, relationships with employees, creativity and permanent sustainability of jobs, as well as the interest in environment.

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