A business that focuses on interaction with society is a model that has become quite popular in developed countries. In the CIS, such an approach to one’s own business is only gaining momentum, but still moving in the direction of development.
Benefits of socially oriented entrepreneurship
Before considering in detail such a topic as social responsibility of business, it is worth paying attention to both the advantages and disadvantages of this model of interaction between entrepreneurs and society.
It is logical to start with positive sides. First of all, these are more long-term and favorable prospects for this business format in comparison with the usual model of activity, which does not take into account the interests of society. If a particular company has a noticeable positive impact on the everyday life of the residents of the region in which it is located, then loyalty from the representatives of the target audience grows significantly, and the brand becomes more recognizable and is associated with a positive image. Obviously, for any company, such processes are beneficial.
Continuing the theme of perspective, it makes sense to pay attention to the fact that in a society that can be called prosperous, favorable conditions are created for the stable development of business. An obvious conclusion follows from this: even tangible short-term costs associated with social activity can stabilize profit growth in the future.
Public expectations
Another positive factor, which implies the economic social responsibility of business, is the satisfaction of the expectations of the general public. When enterprises are involved in the process of solving social problems, they actually do what members of the public expect from them. In other words, the company is expected to be active, and when expectations are met, loyalty to the company again moves to a new level.
To explain this perception of business by the public is quite simple - people are always waiting for help from those who are able to provide it. And who can help, if not entrepreneurs who own significant funds.
As a reinforcing positive facet of the social activity of business, you can determine the change in the moral image of the enterprise. We are talking about the company's perception of society, as well as a change in the philosophy of the workers themselves. The enterprise, in fact, is part of society and, therefore, cannot ignore its problems.
Possible disadvantages
Three key points can be identified in this category.
First of all, you need to pay attention to the fact that the principle of profit maximization is violated. In other words, the income of the enterprise becomes less due to the constant allocation of a certain part of funds to social projects. In order to compensate for such losses, companies raise prices, which is already a negative consequence for consumers.
The second minus, which is worth paying attention to, is the insufficient level of knowledge and experience to effectively overcome social problems, even with the fact of funding in the right amount. At the moment, various organizations have enough employees with high qualifications in the field of economics, technology and the market. But many of them are not trained to work effectively with society.As a result, the company spends finances, but does not achieve its objectives in the field of social assistance.
The third negative side that the process of introducing orientation toward social problems into the business hides is the lack of accountability to the general public of the managers themselves and the persons acting as managers in the company. As a result, with competent control of the economic indicators of the enterprise, the process of social involvement does not receive due attention.
Social responsibility of business in Russia
This issue has been one of the topical issues in Europe for several years now; more and more attention is being paid to it in Russia. Moreover, in the CIS, the process of the origin and development of this phenomenon had some differences compared with the experience of Western companies. While in Europe and the USA, the degree of responsibility of business representatives to society was influenced by society itself, the situation in the post-Soviet space was somewhat different. The social responsibility of business in Russia was the result of an initiative taken by market leaders in various segments.
As for the first steps in this field, they were made in the mid-90s. It was then that the first codes were fixed, implying the presence of a certain ethics of companies. An example is the Code of Honor of members of the Russian Guild of Realtors or the Code of Honor of Bankers.
If you look at the fact that the social responsibility of business in Russia looks like today, you can see that in the vast majority of areas of business, professional ethical codes have been adopted. And many companies are already engaged in their development. That is, the question of the relationship between business and society is not deprived of the attention of Russian entrepreneurs.
In order to keep the bar high, various commissions on corporate ethics are organized in the above direction.
What determines the ethics and social responsibility of business
If we talk about Russia, then it is worth paying attention to such factors as the expansion of the sales market of large domestic companies. It is about trade outside the country. The result of such an activity is the need to take into account the requirements of foreign partners. Those, in turn, pay attention to the fact that business transparency should be maximum.
But there are other reasons why the social responsibility of business within the CIS is constantly moving in the direction of development.
First of all, it is necessary to touch on the peculiarities of the mentality of the CIS population and the traditions of corporate governance. These are the following factors:
- Fairly high social expectations amid low population activity.
- Evaluation of a specific employee or group of employees is not so much in productivity as in loyalty to leadership.
- A low degree of media adequacy in relation to the efforts of representatives of Russian business aimed at supporting society.
- Binding an employee to a specific company by providing the latter access to social institutions that belong to the organization or cooperate with it (motels, hospitals, kindergartens, etc.). At the same time, wages remain low.
The social responsibility of Russian business is still moving towards formation for reasons related to both historical and geographical factors. First of all, it is a large territory of the country and, as a result, a considerable remoteness of many settlements from each other. Do not forget about the fact that the bulk of capital is concentrated in regions that are characterized by a low level of development and difficult climatic conditions. This is the northern part of the country, where aluminum, oil, gas and nickel are mined.
Political and Social Factors
This group of processes that influence the business philosophy in Russia deserves special attention.
We are talking about the following features of Russian life:
- significant scatter of many social problems in the regions;
- government pressure on companies to allocate resources to various projects that are not related to the interests of the company;
- tangible poverty in various regions;
- corruption;
- lack of necessary state infrastructure and experience as such to overcome a number of pressing problems (increase in the number of homeless people, drug addiction, AIDS, etc.).
If we analyze the studies, we can conclude that the development of social responsibility of business in Russia is not at a high level. We are talking about the opinion of the Russians themselves: 53% of those surveyed during the research believe that at the moment, business cannot be called socially oriented. Of the top managers who participated in the polls, only 9% believe that the social responsibility of business in the CIS can stimulate increased competitiveness, and the relevant reports will be a vivid demonstration of the organizations' open policies.
It is worth mentioning the fact that after analyzing more than 180 of the reports mentioned above, a rather vivid picture has formed: large and medium-sized businesses cannot boast of the dynamic development of social responsibility.
Public opinion
Many Russians pay attention to how the social responsibility of modern business is developing in the post-Soviet market. And if we analyze the ideas that citizens have developed about the responsibility of companies to society, we can distinguish three key positions:
- Corporate Social Responsibility - This is a work aimed at overcoming various problems in society. In this case, the so-called moral consequence of owning wealth is determined as a motive.
- According to the second position, the social responsibility of a business is nothing more than the production of goods, payment of taxes and making a profit.
- The third position includes elements of the second, but at the same time considers participation of companies in various social programs as a manifestation of responsibility to society.
In any case, it is obvious that the population expects activity from representatives of Russian business in the framework of interaction with society. Such activity can be expressed in the training and retraining of personnel, the creation of new jobs, the support of public organizations, various initiatives, etc.
What should be the ethics of organizations
In order to clearly understand what constitutes business ethics and social responsibility, it is necessary to consider the essence of this phenomenon and the methods of its application in developed countries. This will help to more objectively assess the state of this process in Russia. Initially, the following should be noted: the orientation of business representatives on interaction with society is one of the core problems in the globalization process. This is confirmed by the fact that representatives of the so-called Club of Rome are making a lot of efforts to exert a qualitative influence on the formation of an international concept of business social responsibility. The structure of this organization includes both European scientists and entrepreneurs.
In this case, the main emphasis is placed on the priorities set forth in the Global Covenant: these are labor laws, environmental safety and, of course, human rights.
The very ethics and social responsibility of business are reduced to the following concept: a corporation / company should have a planned development in three interrelated aspects. We are talking about social programs, ensuring the profitability of the organization and caring for the environment.
Inevitable difficulties
It is not difficult to conclude that the principles that contain the social responsibility of business, organizations and companies should be defined as obvious and follow them. But not everything is as simple as it might seem at first glance.
Many companies are stuck in various strategic and technical issues related to management. These include the following tasks:
- periodic attempts to convince investors that new long-term investments are needed;
- maintaining harmonious relations, as far as possible, with the local authorities, while being away from the constant solution of complex neglected problems;
- maintaining competitiveness against the background of significantly increased social costs.
Finding effective solutions for this complex of tasks is not so simple. For this reason, experience and knowledge in the framework of the topic “problems of social responsibility of business” are very much in demand in the post-Soviet space.
Current approaches
If you pay attention to the form of realization of the responsibility of entrepreneurs to society, you can see that it has changed significantly.
Previously, preference was given to the strategy, according to which the proper management of the enterprise and compliance with legislative standards were the highest
Now everything looks a little different. First of all, social responsibility is expressed in taking into account the interests of that group of society, which affects the functioning of the organization and is in the zone of its influence. The consequence of this approach is to change the social contract and its understanding as such. That is, in addition to employees and owners of enterprises, all interested parties are taken into account, who in any way affect the work of the company.
Such a concept forms a vision of interaction with society that is different from that of shareholders. Even with a cursory analysis, the practical value that such a social responsibility of the business carries is obvious. Approaches that have the right to exist and are capable of producing the desired results should be designed to work with the maximum number of social groups, which implies taking into account their interests.
For example, the fact of the closure of an enterprise will be considered from the perspective of the gain or loss of not only shareholders, but also suppliers, local people, workers and consumers. This approach is truly responsible for society.
Conclusion
The problem of social responsibility of business in Russia definitely has a place to be. But in order to get a truly decent level of interaction between companies and society, it is necessary to summarize the experience of domestic companies in this segment and conduct ongoing research on an ongoing basis. In addition, it will be extremely difficult to implement a strategy of responsibility of entrepreneurs to society if the level of corruption does not decrease, and significantly.
