Corporate social responsibility in Romania.

Popa, Adina ; Blidisel, Rodica ; Farcane, Nicoleta 等

1. INTRODUCTION

Corporate Social Responsibility refers to the manner in which companies correlate their values and behaviour with the expectations and needs of those concerned--not just clients and shareholders, but also employees, suppliers, communities, authorities and the society as a whole. The balancing of all these interests, the company's ability to meet all expectations and to deliver solutions should be organised by full integration of the Corporate Social Responsibility concept in management systems, and therefore, in all of the company's activities, in its organisational culture, in the core business. Our research aims to track the positions of companies' managers within multinational companies in western area of Romania on two of the most controversial issues of Corporate Social Responsibility (CSR): transparency in CSR policies and credibility of companies developing social programmes.

The researchers want to find out how the companies in Romania are using CSR. We performed our study due to the fact that at this stage we do not have a complete knowledge of CSR in Romania.

2. LITERATURE REVIEW AND THEORETICAL

BACKGROUND

The topic regarding CSR has achieved absolute size only in the early '90s, with a considerable acceleration in 2000. By means of internet, any aspect of global economy and politics can become in a snapshot the centre of stakeholders' permanent attention and concerns. Basu and Palazzo (2008) emphasized that the approach of CSR from the stakeholders' point of view is crucial for a content approach, while an organization should know and implement successfully the stakeholders' standards.

To achieve these standards companies should combine a good planning with performance. It is important for stakeholders to adapt themselves. A successful CSR is based on an outside-in thinking. Regarding the stakeholders' substantiation, equity is considered "a reserve of willingness", that could help an organization to recover from a crisis. To obtain full functional quality of each relationship, the organization should have certain management procedures and a cultural commitment to generate rather admiration than public complaints.

The CSR is a concept defined first by Bowen in the year '50. Bowen (Carroll, 1999) assumes that companies should have obligations, should follow lines of action compatible with the "values of society". Carroll (2004) presented the four components of social responsibility: economic, legal, ethical and discretionary or philanthropic. In the later 90's CSR became an organizational imperative concept to address known as the "triple bottom line" (Elkington, 1998) of "people, planet, profit" and different organisations started to issue models and guidelines for CSR reporting. There are also authors that have a complete different view about CSR (Friedman, 1970; Handy, 2002; Kooskora, 2006). They considered that "there is one and only one social responsibility of business--to use its resources and engage in activities to increase its profits".

In Romania the literature regarding CSR is not abundant; also the authors treated in prior research some aspects of CSR. (Blidisel et al., 2008; Popa et al., 2008). In Romania, as in other transition countries the topic of corporate social responsibility is powerfully linked with the multinational companies that have introduced ethical business principles. On the other side, Romanian Government shows interest for the problem of social responsibility and the legislation in the field of environment, employment, restructuring of local authorities that have been permanently improved.

The concept of CSR is just emerging in Romania and, therefore, it is not very well understood yet.

The study on the CSR of multinational companies from western part of Romania aimed to identify how CSR policies are perceived and applied in our country.

3. RESEARCH METHODOLOGY AND RESULTS

This study investigates the extent of CSR among the multinational companies in the western area of Romania. We have tracked the positions of these companies' managers on two of the most controversial issues of CSR: transparency in CSR policies and credibility of companies developing social programmes.

For this purpose using as research instruments questionnaires and interviews we have conducted an investigation on the above mentioned companies during the period: January-March of the current year.

The investigation addressed management representatives from the business environment, namely persons involved in CSR. The following relevant persons have answered to our questions: human resources managers, financial managers, representatives of trade union organisations. The response rate was of 85%.

The criteria assessing communication transparency and credibility were covered by a number of 20 questions. Our questions addressed issues regarding social and environmental audits (social auditing and areas covered by audits), social reporting (publication of reports, their credibility, the target groups considered in the report), code of ethics (its existence and publication), social investments (evaluation and publication of its results, valuation methods used, social investment fields, target groups), company's correct behaviour on the market, its policy regarding employees, company's involvement in energy preservation, in prevention or reduction of air and water pollution, as well as in supporting local infrastructure development.

Our research results had two stages, the quantity and the quality dimension; the latter consisted in analysing responses to a set of questions addressed to those who answered to the questionnaires. Although they deal with CSR, 25% of the managers say that they do not know if the companies they are working for are subject to social audits.

Out of our respondents, 45% of the multinational companies' representatives prepare social reports, 15% say that social reports are not credible, and 55% say that social reports are credible. Managers consider that the main issues to be considered by a social audit refer, in order of importance, to relationships with local communities (79%), employees' rights and working conditions (80%), consumers (55%) and environment (65%). Respondents argue that recycling, decrease of energy consumption and prevention of water and soil contamination are the main environmental problems their company should be concerned of. 80% of the respondents say that their companies have ethical codes. Also, the main ways in which organizations promote their code of ethics are the following: internal communication channels (74%), training (35%) and corporate web-site (54%). According to our research, ethical codes are primarily addressed to employees or trade unions (85%), clients (40%) and shareholders (60%). Corporate codes of conduct differ according to specific investment areas and used implementation methods.

In conclusion, we can appreciate that sustainable development of codes of conduct is highly dependent on how they reflect the values and behavioural expectations of corporate owners, their employees, consumers and communities where those entities exert all investment transactions. 87% of the respondents say that their company is investing socially. An even higher percentage of managers, 93%, consider that the organisations they work for should invest in community issues. On the other hand, 35% of the respondents confess that their company does not evaluate social investment programmes. In order of importance, the main social investment evaluation methods are the invested budget (70%) and press articles (52%). Companies prefer the following social investment areas: training and professional development opportunities for employees (80%), education (70%), working conditions for employees (69%), culture and arts (63%).

4. CONCLUSIONS

In most cases, multinational companies are subject to legislation of their host countries and, by default, to minimum standards of social conduct that ensures streamlining of social behaviour within their own organizational system and, implicitly, towards the communities where their main production structures are located.

Beyond the social factor assimilated to corporate investment processes, a particular role has the government policies for stimulating certain CSR principles in terms of regulations and practices, to enable preservation of certain social programmes sufficiently compatible with the host nations' demands.

In conclusion, we can appreciate that sustainable development of codes of conduct is highly dependent on how they reflect the values and behavioural expectations of company owners, their employees, consumers and communities where those entities exert all investment transactions.

In the field of inter-dependencies generated by the emerging globalization process of competitive areas, there is still the need to fundament certain principles of economic policy, sufficiently adequate to sustain the development of CSR in the sphere of economic and social development, having in its centre the plan of investment processes for requirements and exigencies formulated by the human society as a whole.

Romanian companies could improve their CSR strategies by means of additional research, analysis and communication.

5. THE RESEARCH LIMITS

Our paper is focused only on the case study of the CSR extension among the multinational companies in the western area of Romania.

6. FUTURE RESEARCH PLANS

The researchers want to extent this study to all the Romanian companies regarding the perception and using of CSR.

7. REFERENCES

Basu, K. and Palazzo, G. (2008). Corporate social responsibility: A process model of sensemaking. Academy of Management Review, 33, 122-136, available from: http://aom.metapress.com/app/home/contribution.asp?referr er=parent&backto=issue,7,16;journal,8,8;linkingpublication results,1:109447,1, Accessed on: 26.05.2009

Blidisel R., Popa A, Farcane N. (2008). Disclosure level of Risk Management Information: The case of Romanian Companies, Annals of DAAAM for 2008 & Proceedings, Katalinic, B. (Ed), pp 0115, ISSN 1726-9679

Popa A, Blidisel R., Farcane N. (2008). Internet Business Reporting a Challenge: The case of Romanian Manufacturing Enterprises, Annals of DAAAM for 2008 & Proceedings, Katalinic, B. (Ed), pp 1101, ISSN 1726-9679

Carroll, A. B. (1999). Corporate social responsibility: Evolution of a definitional construct, Business and Society 38(3), pp 268-295, available from: http://bas.sagepub.com/cgi/reprint/38/3/268, Accessed on 26.05.2009

Carroll, A. B. (2004). Managing Ethically With Global Stakeholders: A Present and Future Challenge, Academy of Management Executive, 18(2), pp 114-120 available at: http://home.sandiego.edu/~pavett/docs/gsba532/mging_ethi c_global_stake.pdf, Accessed on: 26.05.2009

Elkington, J. (1998). Cannibals with Forks: The Triple Bottom Line of 21st Century Business, British Columbia, CA: New Society Publishers, available at: http://www3.interscience.wiley.com/journal/114186923/abs tract, Accessed on: 26.05.2009

Friedman, M. (1970). The Social Responsibility of Business is to Increase its Profits, The New York Times Magazine, 13 September, available online at: www-rohan.sda.edu, Accessed on 26.05.2009

Handy, C. (2002). What's a business for?, Harvard Business Review, 80(12), pp 49-55 available from: http://www.emeraldinsight.com/Insight/ viewContentItem.do?contentId=1370393& contentType=Review, Accessed on: 26.05.2009

Kooskora, M. (2006). Perceptions of business purpose and responsibility in the context of radical political and economic development: The case of Estonia, Business Ethics, 15(2), pp 183-199 available from:http://papers.ssrn.com/sol3/papers.cfm?abstract_id=88 9796, Accessed on: 22.05.2009