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5which should be based on the communal federal program of energy saving accompanied with wide propaganda of innovative energy and resources savings.
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1. Современные проблемы реформирования и развития жилищно-коммунального хозяйства: Монография // Л.В. Беззубко, С.А. Ильяшевич и др./ Под общ.ред. д.э.н., проф. В.В. Дорофиенко. - Донецк: Нордкомпьютер, 2009. - 237 с.
2. Электронный ресурс. - Режим доступа: http://solex-un.ru/energo/review/energoservisnaya-deyatelnost-v-rossii/prilozhenie
THE SOCIALLY ORIENTED BEHAVIOR OF THE BULGARIAN BUSINESS - OPPORTUNITIES AND THREATS
1 Assoc. Prof. Nikolova N., PhD 2 Prof. DSc Dimitrova S.
1 Bulgaria, Varna, Technical University 2 Bulgaria, Veliko Tarnovo, Vasil Levski National Military University
Abstract. For more than half a century 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 have been accumulated in the field of socially responsible business behavior. The development of the practice of corporate social responsibility in Bulgaria shows that the business is open to adopting the positive world experience. Currently, numerous companies of varying size and status announce their social activities. The main result of the study confirms that the Bulgarian business circles cease to consider the issue of corporate social responsibility as secondary and not inherent to business.
Keywords: management; strategic management; corporate social responsibility; socially oriented behavior; forms of socially oriented behavior.
Introduction. The dynamic changes in the business environment, marked by the consequences of the global economic crisis, provoke companies to increasingly focus their attention on detailed examination of all factors that contribute to increasing their competitiveness and industrial development. Accordingly, the focus of their strategies has changed completely. The attention of management has been directed not only towards the factors that have an immediate impact their financial results, but also on the factors that influence the enhancement of their competitiveness through the application of a number of non-financial instruments. The focal point is innovation as a key factor for economic growth based on more efficient use of resources, for the formation of competitive advantages, for providing employment through developing activities characterized by high added value, for ensuring environmental protection. An increasing number of industrial companies apply total reengineering of existing business practices. More and more frequently, the discussions in this area are directed to the applicability of corporate social responsibility, which, both on the national and global scales, is becoming a topical issue that involves the scientific community. This has provoked the scientific research of the authors of this article hat aims at studying and analyzing the motives for and obstacles to the socially oriented behavior of the Bulgarian business as a basis for industrial growth.
Body. The starting point for the research and analysis in this article is an empirical study, conducted by the authors, of 74 industrial companies operating in the city of Varna via the approach of survey and data processing using Exel. The specific characteristics of the model of corporate social responsibility in Bulgaria have been taken into consideration. Accordingly, the research data show that 68.7% of surveyed companies believe that applying the principles of social responsibility improves the company's image and promote its products and services on the market, thus leading to increased sales volume and the market capitalization of the company. In other words, if the organization conducts a socially responsible business policy in times of crisis, this provides the advantage of maintaining a good level. A confirmation of the abovesaid is demonstrated through the motives for socially oriented behavior ranked by representatives of the business, as shown in Table 1.
The impression from the conducted studies is that the behavior of Bulgarian companies is to a lesser extent determined by internal motives for awareness of the responsibility for the social represented
business activities - 38.5%. Moreover, the reasons for socially oriented behavior of the Bulgarian business structures are differentiated in accordance to the size of the organization, as shown in Table 2.
Table 1. Motives for socially oriented behavior of business in Bulgaria
Motives 2014 r. 2016r
Willingness of the companies to improve their image, which leads to increased sales volume and capitalization of the company 68,06% 69,44%
Realizing the responsibility for the social consequences of business activity 38,89% 37,50%
Aspiration of businesses to accept some of the social commitments as the norm 37,50% 36,11%
Need for compatibility with CSR principles in cooperation with foreign companies 25,00% 25,00%
Influence of external stakeholders 15,28% 16,67%
Activisation of the propaganda of CSR ideas in the media 5,56% 5,56%
Another answer 1,39% 2,78%
No answer 2,78% 2,78%
At the same time, the growing influence of external regulators on encouraging local businesses to socially oriented behavior is clearly noticeable. In particular, the motive - need to comply with the prescriptions of the law setting forth that businesses have to take over some of the activities pertaining to the welfare of society - indicated by 39.0% of the respondents (see Table 2.10). It is big businesses, rather than small and medium ones, that act on this motive (see. Table 2.11), as large companies have more resources and are therefore able to better help the state deal with social problems.
Table 2. Motives/causes for socially oriented behavior of business in Bulgaria according to type of business
Company Motives Large Medium Small
2014r. 2016r 2014r. 2016r 2014r. 2016r
Willingness of the companies to improve their image, which leads to increased sales volume and capitalization of the company 70,83% 75,00% 62,50% 66,67% 66,67% 66,67%
Realizing the responsibility for the social consequences of business activity 41,67% 41,67% 37,50% 37,50% 29,17% 25,00%
Influence of external stakeholders (consumers, noncommercial organizations and etc.) 16,67% 20,83% 12,50% 16,67% 8,33% 8,33%
Need for compatibility with CSR principles in cooperation with foreign companies 29,17% 29,17% 25,00% 25,00% 16,67% 16,67%
Aspiration of authorities to make business take on the responsibility for part of the social welfare 33,33% 37,50% 33,33% 33,33% 37,50% 33,33%
Activisation of the propaganda of CSR ideas in the media 4,17% 8,33% 4,17% 8,33% 4,17% 4,17%
The next factor is external and is connected with the development of international economic relations. If large organizations have more opportunities to enter the international markets and therefore better understand the importance of this motive, the motivation of medium and especially of small businesses for the development of foreign business contacts is much lower. This situation clearly reflects the problem of the Bulgarian economy, linked to the need to increase consumer demand by foreign partners and increase exports.
According to the study, of no less importance as a motive is the need to respect the principles of corporate social responsibility (CSR) in cooperation with foreign companies - 25.9%. The other factors rank as follows: the influence of external stakeholders (consumers, NGOs, etc.) and emphasizing the ideas of CSR in the media - respectively 15.3% and 5.2% (Table 1). At the same time, these motives have different meanings for different-sized enterprises in implementing corporate social activity. Accordingly, we find the following relationship: the larger the size of the company, the greater the importance of these factors: 6.2% for large companies, 4.7% for medium and 2.7% for small companies (Table 2).
The reasons for the socially oriented behavior of the Bulgarian business constitute one part of our research. In parallel, the threats and barriers to this behavior should be taken into consideration.
The condition of the Bulgarian socially responsible practices is in line with the results from the world practice. The system of corporate social activity involves three interrelated elements: principles, the processes based on those principles and the corresponding measurable results. The
research in this area suggests that the principles of CSR relating to the performance of specific business civic responsibilities and the orientation towards sustainable development today do not conform to society as a whole. The impression is that they rather correspond to specific stakeholders -customers and suppliers, owners and employees, state and local municipalities. This is why we consider CSR as a modern approach to strategic management. In confirmation of this, in response to the question: "What prevents Bulgarian business to implement CSR principles?", the respondents see three main reasons: high taxes - 42.7%, lack of compensations and access to credit alleviations for socially responsible organizations - 37 , 5%, the lack of understanding of the value of socially responsible behavior - 34.7% (Table 3).
Table 3. Obstacles for the implementation of CSR principles by Bulgarian companies
Obstacles 2014 r. 2016 r.
High taxes 47,22% 48,61%
Lack of compensations and access to credit alleviations for socially responsible organizations 37,50% 36,11%
Lack of awareness of the value of socially responsible behavior 34,72% 33,33%
Reluctance to spend part of the revenue on external stakeholders 29,17% 29,17%
Lack of information about the phenomenon CSR due to the lack of interest by the media 27,78% 26,39%
Ignorance of forms of CSR other than charity and sponsorship 23,61% 25,00%
Cost of implementation of CSR principles 22,22% 22,22%
Lack of social institutions that represent the interests of socially responsible business 20,83% 22,22%
Inability of the authorities to promote the principles of social responsibility 18,06% 19,44%
The high taxes are considered the major obstacle to implementing socially responsible practices companies of different sizes. The importance of this factor is shown in Table 4.
Moreover, in times of crisis it is understandable and completely comprehensible that Bulgarian companies are reluctant to spend part of their revenues to external stakeholders, such as socially disadvantaged people, local communities and others that should be regarded in correspondence with the change of the subject of CSR. Today the attention of companies is directed towards their own staff (prompt payment of salaries, social benefits, and etc.), which allows not only the employees but also their families to feel secure in times of crisis. And the fact that 22.5% of the representatives of companies still assess CSR in terms of the short term perspective (such as the costs of implementing the principles of social responsibility) only confirms the specific characteristics of the Bulgarian practice. The financial difficulties appear, to a certain extent, as a problem for smaller companies - the smaller the company, the more often its representatives indicated that the costs of implementing CSR are high (Table 4).
Indirect confirmation of the importance of the interaction between businesses and the government in the implementation of CSR practices is observed in a small number of the respondents' answers. According to them, the principles of CSR in Bulgaria are not implemented due to the inability of the state to assist in the process. The claims of the local business community on the mass media, which are not interested in widely propagating the ideas of CSR, are also clearly understandable. The reason for this lack of interest is the fact that publishing information on the implementation of social measures by the print media is treated as PR. Therefore, information on social activities, projects or programs can be found mostly on the Internet. Information about a company that adheres to the principles of CSR, has developed a mission and a policy, and publishes social statements usually appear in the print media on the eve of its anniversary or other important event, but always in the last part of the article or interview with the head of the company. The attitude of the mass media and mixing philanthropy with the other forms, which representatives of the official and business circles have allowed every so often, naturally result in the ignorance of the business representatives in Bulgaria - 24.1% about forms of CSR other than charity and sponsorship. However, the existence of, although in a smaller percentage, of businesses that are aware of other forms of socially oriented behavior should not be underestimated. Some of these forms include: voluntariness -voluntary free assistance by the employees of the company to the local society; charity marketing -payment of part of the individual transactions in favor of the chosen good cause, better known today as the "percentage policy "; social partnership - a form of interaction between business, civil society and government, and business strategy - where social responsibility is a fully integrated system of strategic
decision making of the company, i.e. the company carries on business in accordance with the principles of professional ethics and respect for the people, the society and the environment.
Table 4. Obstacles for the implementation of CSR principles by Bulgarian companies according to type of business
Company Obstacles Large Medium Small
2014r. 2016r 2014r. 2016r 2014r. 2016r
High taxes 45,83% 45,83% 41,67% 41,67% 50,00% 54,17%
Ignorance of forms of CSR other than charity and sponsorship 25,00% 25,00% 20,83% 20,83% 20,83% 25,00%
Lack of information about the phenomenon CSR due to the lack of interest by the media 25,00% 25,00% 33,33% 29,17% 25,00% 29,17%
Lack of compensations and access to credit alleviations for socially responsible organizations 37,50% 37,50% 33,33% 37,50% 41,67% 50,00%
Reluctance to spend part of the revenue on external stakeholders 29,17% 29,17% 33,33% 33,33% 25,00% 25,00%
Inability of the authorities to promote the principles of social responsibility 12,50% 12,50% 20,83% 25,00% 37,50% 37,50%
Lack of social institutions that represent the interests of socially responsible business 20,83% 20,83% 20,83% 20,83% 25,00% 20,83%
Insufficient awareness of the value of socially responsible behavior 37,50% 37,50% 33,33% 33,33% 29,17% 29,17%
Cost of implementation of CSR principles 16,67% 16,67% 29,17% 33,33% 29,17% 33,33%
Conclusion. Based on the research conducted, we believe that the Bulgarian business is aware of the need to take into account the public interest, which should be reflected in its activities. Without claiming that we cover in detail the studied problems, we think that there is a positive change in the attitude of the Bulgarian business towards external stakeholders. This is indicative of a certain diversification of the stakeholders involved in actual interaction, as well as of thorough understanding of social responsibility. The survey results show an increase in the ethical conduct of business, and its focus on compliance with international practice.
The main motive of the socially oriented behavior of the Bulgarian companies is their desire to improve the image, which leads to the increase of the sales volume and the financial results of the company, thus confirming the existence of business benefits to CSR, which outweigh the costs incurred. The larger the company is, the more areas of CSR it supports. Compliance with the law in all spheres is reflected in the main directions of CSR, but small businesses take less stringent measures than the large and medium ones to fulfill their obligations to comply with the legal requirements, to ensure better working conditions, and to provide quality goods and services.
Overall, the level of awareness of the phenomenon of social responsibility of business is good, but in practice it is still below world standards. Applying the principles of CSR involves certain difficulties of socio-economic nature. The share of the profits allotted by companies in the cost structure for participation in various social projects remains very low - less than 1% of the profits. The financing of projects under CSR is of predominantly spontaneous nature in a large number of companies and the allotted funds are not provided in the structure of complex planned overhead of these companies.
All this shows that despite the progressive nature of socially responsible practices in Bulgaria, the comprehensive presentation of the systematic approach to corporate social responsibility is still in the stage of formation.
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