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7MODEL OF CORPORATE SOCIAL RESPONSIBILITY OF
THE BULGARIAN BUSINESS
1 Assoc. prof. Nikolova N., PhD, 2 Prof. DSC Dimitrova S.
1Bulgaria, Varna, Technical University, 2 Bulgaria, Veliko Tarnovo, Vasil Levski National Military University
Abstract. For more than half a century now, scientific and business circles have been discussing the nature and content of corporate social responsibility. So far a lot of theoretical knowledge and practical experience in the field of the socially responsible business behaviour have been accumulated; nevertheless, the heads of companies have many questions they are still seeking the answers to. These questions concern the awareness of the choice to join the practice of social responsibility, the guidelines, the forms and the scale of implementation of CSR principles. These and other questions related to the practice of corporate social responsibility should not be given a hasty and simple answer. Furthermore, various business communities can answer the same question differently, since not only the characteristics of the specific companies or industries should be taken into consideration, but also the socio-economic development of the country as a whole. The scientific research of the authors comes as an answer to the abovementioned, with an emphasis on creating a model of corporate social responsibility in the dynamic changes of Bulgarian business environment.
Keywords: management, strategic management, corporate social responsibility, socially-oriented behavior, forms of socially-oriented behaviour.
Introduction
The analyses conducted by industrial companies during and after the global economic crisis mapped out clear guidelines for the appropriate method of selecting strategies that would respond to the changing and complex economic situation. The companies are increasingly turning their attention to the detailed examination of all factors which contribute to improving their competitiveness and industrial development. This completely changed the focus of their strategies. The attention of management has focused not only on the factors that have a direct influences upon the financial results, but also on factors that affect the enhancement of their competitiveness through the implementation of a number of non-financial instruments. Thus, the focus of attention falls on innovations as a factor for the following: economic growth based on the more efficient use of resources; formation of competitive advantages; employment through the development of activities bearing high added value; ensuring environmental protection. More and more industrial companies choose to implement total reengineering of the existing business practices.
The urgency of the topic on a national and worldwide scale has encouraged the research of the authors, whose aim is to investigate and analyze the current status and trends of corporate social responsibility (CSR) of the Bulgarian business as a factor for industrial growth.
Empirical business model of corporate social responsibility
The starting point of our research was the empirical studies of industrial companies operating on the business market in the city of Varna. When carrying out these studies, the following specifications should have been taken into account. According to the data from the National Statistical Institute by 30.11.2015 out of the 383,905 active non-financial enterprises, the number of small and medium-sized enterprises was 383,153. This means that the share of large companies, defined as such according to the number of employees - in this case, exceeding 250 - is 0.19% of the total number of non-financial corporations. Similar results have been obtained for the northeast statistical area, which circumstance is the basis of our research that focuses precisely on this group of industrial enterprises in terms of its potential contribution to the development of corporate social responsibility.
In accordance with that, in 2014 we allowed ourselves to conduct a pilot study of 74 industrial companies operating in the city of Varna, whose goal was to establish the changes in the attitude of the industrial companies towards CSR for the period starting from the last survey in 2006-2007. The criteria, objectives and scope of the two studies were different. This fact determines the incomparability of the results obtained by both surveys and therefore will not be covered by this publication. When analyzing the data from the surveys and comparing the results obtained, a re-selection of the companies was conducted, where the number of interviewed employees was increased and the number of surveyed
companies was limited to 12. This allowed us to carry out a more in-depth analysis of these industrial companies. Our choice fell on those companies whose answers were closest to the average data of the total initially surveyed companies. In January 2016 we conducted a second survey in these twelve companies to determine what change had occurred over the period of two years.
The study was based on a survey questionnaire and the obtained data were processed using formulas in Exel. Due to the limited volume of this publication, we can only provide the results of the research and the analyses which support our claim that virtually all large companies in Varna already had a CSR or sustainable development policy. In order for greater objectivity of the data to be ensured, the applied approach included the employees' anonymous response to the survey questions.
It is noteworthy that the decision to implement the CSR principles is not spontaneous. This is an ongoing process of analysis during which the management has to make an informed decision as to whether the company can be socially responsible. This decision can be based on two paradigms: economic and social. Economically, the leading answer is whether the social investment of businesses are profitable or not, derived from the opinion of neoclassical economic theory. In this aspect, the main motives of the socially responsible behavior of the companies is increasing the profits at the expense of the implementation of joint programs with state participation, with community organizations involved in projects for private-public partnership, preferential access to the performance under government contracts and the like. In this case, the growth of return on invested means is expected in the short or medium term, but often this does not contribute to the public's trust in business because it is perceived as coercive and pragmatic. In the second case, the theoretical basis of CSR serves the institutional economics. The advantage or disadvantage of the implementation of CSR in this case is considered in the long term, where fluctuations in profitability are aligned and the priority is to support sustainable business. This leads to its integration in public institutions and its transformation as an integral part of it. The analysis and overall assessment of the efficiency and competitiveness of business are the main tools for making this decision, whose algorithm has been developed by the authors and is shown in Fig. 1.
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Results
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- Increasing the trust of stakeholders
- Increase of sales volumes
- Enhancing the company image
- Distribution on new markets
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Fig. 1. Algorithm for decision making for the implementation of CSR principles
The general view of the industrial companies operating in the market in Varna is that the responsibility of the business to society is not their main priority. The conducted research showed that the focus of the companies is investing funds for CSR mainly related to production, employees' health care and labour safety. This constitutes the indirect contribution to society, which is, though, generated by the interest of the owner of the capital to increase the company's equity. There is a clearly marked tendency for the businesses to allot more and more resources for the improvement of corporate management, environmental protection, and efficient use of energy and material resources and reduction of harmful gas emissions. The studies conducted in this direction suggest that not many (8%) of the companies operating on the territory of the city of Varna identify the term CSR with philanthropy. It is necessary to clarify that in fact philanthropy is an important element of CSR. For the majority of the respondents, the survey concluded that the implemented environmental protection policies were purely formal. The companies demonstrate their commitment to the community through irregular acts of charity.
A large proportion of the companies (58%) in 2016, with a margin of 3 percentage points in comparison to 2014, connect the motivation for developing a CSR strategy with their quest to distribute, popularize and promote their brands and improve their reputation.
A decisive role in the contribution of companies to sustainable development has not only the application of CSR principles in their own institution, but also the exercise of control over the work of the stakeholders in this respect. The survey results show that at this stage their contribution in this direction is insignificant. We need businesses to pay more attention to working with suppliers and subcontractors that adopt and implement CSR in their practice, thus ensuring mutual control and feedback in its parallel its implementation by all stakeholders. The implementation of strict control over the observance of human rights by the suppliers is also not a priority for companies. They do not direct their efforts towards the development of ethical standards in business management.
The need for investing considerable funds in initiatives related to CSR is one of the main obstacles to the active development of socially responsible behavior of companies. The lack of necessary knowledge and skills, combined with insufficient interest from the media to cover these events - 1-2% - impede the progress in this area.
The results pertaining to the nature of social responsibility show that smaller companies accept the voluntary nature of the implementation of CSR, while large companies rely on the compromise.
During the meetings with the companies, every second manager shared the opinion that the costs of social activities are high and the conviction that this is the main obstacle to implementing best practices and initiatives for sustainable development in their companies, as this would mean increase of their costs in comparison with the costs of their competitors. Another typical problem that was reported by managers is the lack of appropriate skills and experience in this area. Finally, they mentioned the barriers associated with the uncertainty of the government policy in this area and the lack of qualified staff.
The companies also noted a wide range of potential benefits of the implementation of the corporate social responsibility practices, although a small number of companies talk about the possibility of measuring the benefits of social activities related to energy efficiency, productivity growth, creation of competitive advantages and more opportunities for attracting investments.
In the field of CSR, the relations between the business and the state have always been complicated. Some of the managers of the surveyed companies expressed the opinion that these relations consist in the following: the state authority is usually seen as a body that provides guidance that businesses should follow. Such a practice is not conducive to the dialogue which is essential for the development and dissemination of the principles of sustainable development. On the one hand, the business wants the state to support its social activities by creating incentives for socially responsible behavior. On the other hand, the business is concerned about the too cumbersome and prescriptive approach of the government.
Bulgaria lacks sufficient specialists, qualified in the field of CSR. However, this fact does not cause particular concern in the management and no steps are taken in this direction.
The data analysis determined that the majority of companies (83.33%) believe that the business organization must be socially responsible to society. This view is not shared by 12.5% of the companies and 4.17% have difficult in answering. From the data presented, we can conclude that the business supports, or tends to support, the concept of CSR, which clearly shows that the need to consider the public interests has been clearly realized.
The representatives of large companies provide the greatest amount of positive responses because they possess the corresponding financial resources and abilities to combine at a larger scale the objectives in the field of economy and social relations. Small and medium-sized businesses have fewer
resources to take part in CSR. Nevertheless, a majority of them (78%) also support the responsibility of business to society. Of a particular interest is the comparison of answers provided by respondents occupying various positions in the hierarchy of the organization: the company owners or top managers, the managers of the middle management and other experts, including economists, lawyers and others. The views of the top managers are always crucial, since the decisions made by them determine the whole range of relations arising in the process of operation and management of the organization. The results based on social status in the corporation indicate that the owners and managers of companies, constituting the expert level, determine the values of corporate social responsibility in the organization, and that the majority of them share the idea that business should be socially responsible to society. Only a few of them disagree with that opinion or experience difficulties in providing an answer.
CSR comprises a sufficient number of components, but in its current interpretation suggests reporting and reaching a balance between the conflicting interests of all stakeholders who influence the decisions taken by the company or who are affected by these decisions. The presence of this fact was established in analyzing the answers to the question about the content of corporate social responsibility. The specifics of the matter is that the list of possible answers includes the best option, and namely the contribution of business to the development of society, directly related to the core activities of the organization that go beyond the legal minimum.
The data obtained in the course of the study indicate that the business community has started to adopt a systematic approach to the phenomenon of CSR. The businesses generally identified CSR primarily with an internal social policy, which is manifested in the care for the company's employees as its major resource and its external manifestation in the form of production of quality products and services, charity and support to socially vulnerable sectors of society. The emerging systematized understanding of the CSR phenomenon can, to some extent, serve as the underlying rationale for the frequency of selecting the answer to the question about "the business' contribution to the development of society." In defining what the term constitutes, almost half of the respondents (48.3%) have reported it a priority. As an answer to this question, nearly 17% of the respondents selected all options as the correct answer, except the optimal one. This, on the other hand, shows the complex nature of the contribution of business to society. It should be recognized that the majority of business responses (63.8%) are close to the interpretations of the CSR concept generally accepted in world practice.
The individual features of CSR are demonstrated depending on the size of the company. In particular, large and small companies show interest towards features of internal social responsibility, such as investments in personnel development and implementation of social guarantees related to employees, regular payment of relatively high salaries with real social security threshold, improvement of working conditions and others. Medium-sized companies show increasing interest in the ethical issues of social responsibility, noting items such as maintenance of socially responsible sectors of society, aid for the regions in addressing social issues, charity and others.
Having summarized the results, the overall picture reflects the distribution of responses: companies of different sizes share a common feature - significant decline of the importance of producing high quality goods and services and an increase of the contribution of business to the development of society.
The comparative analysis of the views of the companies' representatives provided the opportunity to obtain the opinion of employees on different hierarchical levels in the organization on the discussed topic. The company owners, top managers and managers of the middle management level, apart from their accountability to consumers for their products and to the staff of the organization are, more often than other specialists, willing to provide support to the socially vulnerable sections of society and the population while implementing the strategic approach to management. Businesses realize that socially significant shares can contribute to the company's tangible benefits such as increased sales volumes, strengthening the position of the brand, improvement of the reputation and attracting the attention of investors.
No significant deviations have been noted in the responses of representatives of different status levels. Company owners and top managers are more and more often inclined in investing in their staff (64.5%), in improving their personal development and working conditions (64.5%), in paying higher wages at a realistic social security income threshold (52.6%), in manufacturing (60.5%) and to a lesser extent expressed support for the vulnerable segments of society (25.0%), regional presence in dealing with social issues (17.1%) or increasing public expectations (14, 5%). At the same time, the heads of the middle management units and specialists declare their respect for the ethical aspects of CSR.
Conclusion
As far as in the course of the research, the hypothesis tested is that the business behaviour in Bulgaria is determined by the interests of all stakeholders, the special understanding of the nature of
the business and content of social responsibility cannot but influence their perceptions of the objects of CSR. The results show that the views of the business community regarding the objects of CSR are adequate to changes in economic conditions and the ongoing economic crisis.
The local industrial companies prefer to contribute to social development on a voluntary basis, although they would not waive access to tax alleviations and soft loans that the state would provide to boost CSR. And the companies that have been granted such access as a result of establishing good relations with the authorities operate successfully in conditions of stability and manage to succeed more easily. The business has clearly declared their position on making a commitment to the social partnership with the state.
Thus, in terms of understanding the nature and content of CSR, it is characteristic of our domestic businesses to mix the priorities of social responsibility directed to the internal CSR with the emphases on the complex nature of corporate social activity, which determines the specifics of the Bulgarian model.
REFERENCES
1. Kotler, F., Kartadzhaya, H., Setiavan, A. Marketing 3.0: from products to customers and further to the human soul- Moscow: ЭКСМО, pp.2011 - 240.
2. Nikolova N., I.Todorova, N.Nenova, Corporate Social Responsibility as a strategic priority of the company's competitive behavior, Compendium of Research Papers MATHTECH 2014, Bishop Konstantin Preslavski University of Shumen, Vol. 1, 2014.
3. Nikolova H., I.Yordanova, Methodological Issues and Approaches to Verification and Assessment of Corporate Social Responsibility in Bulgaria, Compendium of Research Papers of the Annual Scientific Session of USB Plovdiv, October 31, 2014.
INTERNATIONAL UNIVERSITY RANKINGS: REVIEW AND
FUTURE PERSPECTIVES
1PhD in Management Nino Tandilashvili, 2Professor of Economics Marina Tabatadze
1France, Paris, Paris Ouest Nanterre La Defense Universty;
2Georgia, Tbilisi, Ivane Javakhishvili Tbilisi State University.
Abstract. International university rankings have become particularly important since couple of decades. When only national university rankings existed, they were popular and important in some countries, while others did not pay much attention to them. But with the introduction of international rankings since early 2000s (Shanghai Jiao Tong University ranking in 2003 for example), the importance of rankings grow significantly worldwide.
The present article reviews the international university rankings' methodologies and proposes their typology. It also analysis the main critics that the academia has expressed towards them.
Keywords: University rankings, performance evaluation, higher education management.
1. Introduction
Evaluation and performance appraisal in higher education have always been contentious. Ranking authors claim that rankings are objective means to judge university quality and improve transparency and allow students to make informed choices. The main advantages of university rankings for university management seem to be (a) information on the performance of universities for students and junior scientists; (b) a comparative assessment of universities, on the national and international level; and (c) an account of the universities, which are being given more and more autonomy (Hazelkom, 2011). With this point of view, university managements assume that "high rankings can boost an institution's "competitive position in relationship to government" (Hazelkorn, 2011, p. 91). However, critics argue that the results of rankings are not that neutral and they strongly depend on the choice of indicator. They also blame that rankings do not address the various important functions of higher education and that the indicators used in rankings measure distant proxies rather
