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Iryna ZARYTSKA
SHEE «Vadym
Hetman Kyiv National Economic University», Ukraine
Nowadays there are increasing social concerns about
the corporate behavior (in negative meaning) regarding human rights, working conditions,
social welfare and the environment security in the context of current sustainable growth concept. In consequence
of that companies have to meet such request and thus start
and accelerate
their activities on local and global levels in order not just stick to minimum
standards of socially acceptable
behavior within a Corporate Social
Responsibility (CSR) concept but move toward business activity within Shared
Value Concept (SVC).
Scientifics started to discuss the CSR concept first in 1953 with academic
article “Social Responsibilities of the Business” written by H.R. Bowen. And
still there are no common view on SCR and principles of its implementation in
terms of shared value creation. There is a wide range of
concepts and definitions which are associated with the term “CSR”, but there is
no general agreement of terms (Table 1).
Table 1
From Corporate
Social Responsibility to Shared Value definition
|
Definition/Source/Year |
Meaning |
|
Corporate
Social Responsibility (PriceWaterhouseCoopers) (2015) |
Recognizing the needs of their stakeholders in the broadest sense,
understanding the risks and opportunities those needs create, and responding
to the needs publicly and consistently |
|
Corporate
Social Responsibility Committee for
Encouraging Corporate Philanthropy
(CECP), USA (2014) |
Competitive advantage and sustainable profitability in new ways |
|
Corporate
Social Responsibility/ Sustainable/Shared Value
European Commission A renewed EU strategy 2011-14 for Corporate
Social Responsibility (2011) |
The
responsibility of enterprises for their impacts on society with the aim of: –
maximising the creation of shared value for their owners/shareholders and for
their other
stakeholders and society at large; – identifying, preventing and mitigating their possible adverse
impacts |
|
Corporate social responsibility World Bank Group (2011) |
Commitment of businesses to contribute to
sustainable economic development by working with employees, their families,
the local community and society at large to improve their lives in ways that
are good for business and for development |
Shared Value
M. Porter and M. Kramer (2011) |
Policies and operating
practices that enhance the competitiveness of a company while simultaneously
advancing the economic and social conditions in the communities in which it
operates. Shared value creation (SVC) focuses on identifying and expanding
the connections between societal and economic progress |
|
Sustainable
value creation E. Cohen CSR Newswire USA (2011) |
A core business strategy focused on addressing fundamental societal
issues by identifying new, scalable sources of competitive advantage that
generate measurable profit and community benefit |
|
Corporate
Social Responsibility (M. Hopkins) ILO (2004) |
Treating the stakeholders of the firm ethically or in a responsible
manner. Stakeholders exist both within a firm and outside – the natural
environment is a stakeholder for example. The wider aim of social
responsibility is to create higher and higher standards of living, while
preserving the profitability of the corporation, for peoples both within and
outside the corporation |
|
Corporate
Social Responsibility European Commission Green Paper on Corporate Social
Responsibility (2001) |
Concept whereby companies integrate social and environmental issues in
their business activities and interactions with stakeholders on a voluntary
basis |
|
Corporate governance S. A. Cadbury, Global Corporate Governance Forum,
World Bank, (2000) |
Holding the balance between economic and social goals and between
individual and communal goals. The governance framework is there to encourage
the efficient use of resources and equally to require accountability for the
stewardship of those resources |
Source: Price
Waterhouse Coopers, 2015; World
Bank, 2000, 2011; European Commission, 2001, 2011; Committee for
Encouraging Corporate Philanthropy
(CECP), 2014; Hopkins, 2004; CSR Newswire
USA, 2011, Porter and Kramer, 2011.
CSR primary is understood as company’s
responsible attitude to their product or service, to customers, employees and
partners. Moreover CSR is company’s active social position of harmonious
coexistence, cooperation and constant cooperation with the community,
participation in solving the most actual social problems. It is worth to mention that
CSR concept stresses on the expansion of
organization’s reports boundaries through including
social and environmental dimensions to the company’s financial performance.
Now CSR is no longer about risk minimization, it is not just about “doing
no harm" concept, it is no longer about being a responsible corporate
citizen, paying taxes, developing employees or reducing carbon emissions.
According to the recent studies CSR is about competitive advantage and
sustainable profitability in new ways and
thus it is about Sustainable/Shared
Value Creation (SVC). Defining
CSR by European Commission as “the responsibility of enterprises for their
impacts on society” absolutely correlates with such a conception of SVC where enterprises (to fully meet their CSR) should
have in place a process to integrate social, environmental, ethical, human
rights and consumer concerns into their business operations and core strategy
in close collaboration with their stakeholders, with the aim of: – maximizing
the creation of shared value for their owners/shareholders and for other
stakeholders and society at large; – identifying, preventing and mitigating
their possible adverse impacts (European Commission, 2011). And still since there is no one consistent CSR definition for corporations
all around the world to follow different corporations lead their own CSR policy
which differently correlates with a main trend.
Shared value creation is not just the inner commercial
motive of corporations but it is inevitable way to conduct and develop business
in terms of tough competition. Among the key factors
that stimulate companies to apply shared value approach in business activities
are:
o
harsh global completion and price
competition limitations;
o
increasing customer demands and the need for companies to
seek their niche customer;
o
high expectations from citizens,
clients, consumers, public authorities, partners, NGOs and investors;
o
social consciousness and social demands
nowadays play crucial role and thus determine the investment and consumption
behavior of individuals, households and institutions;
o
social concerns about the negative
effects on the environment caused
by the activities of corporations and
some individuals;
o
media development, nowadays ICT (information and communication technologies)
promotes business transparency and activities communication between stakeholders and all interested
parties (European Commission, 2001);
Thus, socially oriented activity of corporations and
shared value oriented business is quite
motivated and is caused by
significant benefits which companies
receive. The economic impact of CSR/SVC can
be estimated in terms of direct and indirect effects, both positive and
negative. Direct effects influence mostly internal
corporate processes – working environment (for example, better working environment insures efficiency and loyalty of employees) and productive use of resources. Indirect effects (of external origin) result from the growing interest of
consumers and investors. Positive indirect effects can increase company’s value
and attractiveness on the market. In contrast, there can seldom be a negative impact on a company’s reputation due to
criticism of its business practices.
References: