Магистерский диплом на тему Corporate social responsibility and its role in the public relations

Содержание:

INTRODUCTION 1
CHAPTER 1. THEORETICAL PART 3
1.1 Corporate social responsibility 3
1.1.1 Corporate social responsibility: notion and types 3
1.1.2 Corporate social responsibility: organization types 5
1.1.3 Corporate social responsibility: organization principles 7
1.2 Comparative analysis of Western and Russian Corporate social responsibility models 10
1.2.1 Western Corporate social responsibility models 10
1.2.2 Russian experience in applying Corporate social responsibility principles 20
1.2.3 Further development of Corporate social responsibility in Russia 32
CONCLUSIONS FROM THEORETICAL PART 38
CHAPTER 2. RESEARCH 40
2.1 Corporate social responsibility experience: Boeing Inc. 40
2.2 General description of the VSMPO AVISMA Company 47
2.3 VSMPO AVISMA’s corporate social responsibility in effect 55
2.4 Comparison of CSR in Boeing and VSMPO AVISMA 65
2.5 Further recommendations on the improvement of the Company’s corporate social responsibility 74
CONCLUSION OF RESEARCH 75
CONCLUSION 77
BIBLIOGRAPHY 79
LIST OF APPENDICES 84
APPENDIX 1. INTERVIEW WITH COO OF BOEING RUSSIA INC. DMITRY SUKHOV 85

Введение:

The relevance of the study is also associated with the processes of globalization, which enhance the influence of large companies on economic development. Modern states are gradually giving way to the pressure of transnational corporations both in economic independence and in social policy. Social responsibility is also manifested in the fulfillment of obligations assumed at the level of functional units of the organization, especially by top management. The development of social policy procedures, social programs, performance criteria must comply with the norms and principles of state laws. One of the ways to form objective information about the social performance of a company is to assess the effectiveness of management of non-financial risks, including social ones.
So, the theme of the research is of great significance as today companies worldwide have recognized the crucial importance of social grounds of their operation. The point is to manage the social and environmental impact of the company’s activity in the way similar to its commercial performance. Despite it’s a challenge to implement corporate responsibility principles into the day-to-day operation of the company, it is well worth the effort. The implementation process anticipates certain difficulties, but the majority of modern companies struggle to justify the management of social and environmental affairs in terms of tangible business benefit.
The main purpose of the research is to analyze CSR policy of Russian VSMPO AVISMA and provide a recommendation for further improvement, taking into account the specifics of CSR in Russian companies determined by the national corporate culture.
The tasks of the research are as follows:

1. Find out the key benefits of applying CSR principles;
2. Evaluate the perspectives of further development of CSR in Russian companies (based on the practices of VSMPO AVISMA);
3. Analyze the Boeing Russia experience in CSR.
The phenomenon of social corporate responsibility has already been examined by Andrew Crane and Dirk Matten (2007), Jan Jonker & Marco De Witte (2006), Andrew Kakabadse and Mette Morsing (2006), Philip Kotler (2005), Thornton Bradshaw (1981), etc.
Assumption of research. Due to a short-term period of development of CSR in Russia, there is the lack of well-organized CSR programs within the country. Compared to the Western CSR tradition, Russia still has a long way to go. Currently Russian companies and corporations eager to implement the leading Western CSR practices and somehow combine them with the Soviet experience in the field. VSMPO AVISMA is a vivid example as it is a huge corporation influencing the all-Russia corporate culture.
Research methods used in the diploma thesis are open source analysis and qualitative analysis in the form of interviews.
From the theoretical grounds the research aims to demonstrate that the modern corporate sector is not only an effective economic entity, but also an effective instrument of social policy. It also reveals the features of applying the principles of social responsibility in Russia and the reserves for the development of the Russian corporate sector as well.
The practical significance of the research is based on the possibility to apply the provisions and conclusions for a much deeper understanding of the problems and prospects of social responsibility in Russian companies. The main ideas of the study complement and clarify theoretical developments in the field of corporate responsibility.
The paper is divided into two parts. The first one considers the essence and the key principles of corporate social responsibility and analyses the peculiarities of its types, provides the comparative analysis of Western and Russian practices of corporate social responsibility implementation. The second part of the research paper focuses on the situation within VSMPO AVISMA and provides some recommendations for the further development of corporate social responsibility in the company.

Заключение:

The economic benefits associated with CSR have become apparent. While, the term “corporate social responsibility” may be considered as a common buzz word, it has become affiliated with corporate annual financial reports and in many cases these business practices actually increase profits and public perception.
Since CSR can be considered as a product attribute, these activities are another way to enhance product quality and perceived firm value by raising consumer awareness. The second major benefit of CSR is that it can improve a firm’s value by creating a positive corporate brand. A corporate brand carries with it the visual, verbal, and behavioral expressions of an organization’s unique business model. A corporate brand should be the public display of its attributes and values that set the firm apart from its competition. As a result, a firm can use CSR to be identified with a specific cause while improving its own identity. Firms perceived as ranking high in CSR are attractive to prospective employees. CSR behaviors also have positive effects on existing employees, ranging from increased organizational commitment, employee engagement and lower turnover. Internal and external CSR activities were found to positively correlate with employee motivation, with internal CSR more strongly related to motivation than external CSR dimensions.
Having considered the situation with Corporate social responsibility in Russia and within Russian companies, it becomes clear that the internal directions of the development of corporate social policy related to caring for the employees of the enterprise are priorities for modern Russian business.
CSR strategies of Boeing encompass not only the company’s employees, but also the communities and regions where the company is presented. It’s also worth underlining that special attention of the company is given to the problems of environmental protection, collaboration with schools and universities as well as fighting with corruption and bribery. Such a wide scope of the implementation of social policy of the company undoubtedly improves the image of the company thus attracting new customers.
Basing on the Collective Agreement of VSMPO AVISMA and its employees, the following conclusions have been made: Corporate social responsibility mainly encompasses financial support, provision of safe labor conditions, protection of environment in terms of Russian legislation and the support for the younger employees of the company. Such measures may be treated as sufficient in terms of Russian business tradition in terms of corporate social responsibility. It’s worth mentioning that the measures applied do not have any influence on the image of the company as there is no particular awareness of the VSMPO AVISMA corporate social policy.
The recommendations for the implementation of the modern social corporate practices in VSMPO AVISMA have been made on the basis of comparison of the current situation with social programs in both corporations. The key idea is that not only VSMPO AVISMA, but all Russian business (non-international ones) should follow to a certain degree the newest practices tested and applied in modern Western businesses. One of the points is the necessity to increase the awareness of society of positive changes within the company in terms of social policy. The other crucial point is that the company should perform a more active and still effective policy in the community and regions of presence. Such a policy would significantly improve its image and attract new professionals. Despite the fact that the company has already implemented particular measures for younger employees these are not enough as there is no well-established system of communication between VSMPO AVISMA and educational institutions.
All in all, it’s worth underlining that the experience of VSMPO AVISMA in terms of establishing the corporate social responsibility procedures in the company is of great importance in context of a short history of social responsibility of Russian businesses. Undoubtedly there is a long distance to overcome comparing to the practices and procedures already implemented in Western large companies such as Boeing. Still, there are specifically different grounds in Russia and the Western world in terms of social responsibility of businesses, so, Russian companies (for instance, VSMPO AVISMA) have their own way which does not eliminate and negate the necessity to adapt and implement some mostly effective social programs that have already proven to be useful. Such a usefulness comes not only for the employees of each particular company, but it’s beneficial for the company itself despite some definite expenses as the implementation of such practices guarantees certain improvement of the image of the company within the country of operation or worldwide (if speaking about a global corporation).

Фрагмент текста работы:

CHAPTER 1. THEORETICAL PART

1.1 Corporate social responsibility

1.1.1 Corporate social responsibility: notion and types

The ideology of corporate social responsibility (CSR) arose as a business response to pressure from growing leftist sentiments and the trade union movement in the end of the 19th century. The institutes of civil society arose at that time demanded that entrepreneurs provide social guarantees to workers and ensure their labor safety, while the decline of professional associations in the mid-20th century actualized the proper tasks for business owners to maintain loyalty and the motivation of employees, which again forced them to come up with CSR. At that period of time particularly the concept of CSR firmly entered the theory and practice of corporate governance in the United States (Blowfield, 2011).
At the first stage, it mainly extended to the issues of social security of its own staff, as well as to the assistance to local authorities regarding the partnership and sponsorship basis. The PR sphere played the crucial role even at this stage.
In the early 1960s, the practice of the relationship between business and society began to transform into a new form of social contract or “a set of written and unwritten rules and regulations regarding the behavior patterns of various elements of society”, among which are the following ones:

• acceptable pay and working conditions from employers in exchange for duties and responsibilities from employees;
• fair competition and respect for the rights and obligations of third parties;
• compliance with tax laws, health standards, safety precautions, interests of consumers, customers, etc (Crane, 2010).

In the 1970s, the CSR agent concept became widespread, implying the responsibility of companies to their shareholders. Its author, the well-known neoclassical economist Milton Friedman, wrote: «… there is only one social responsibility of business — to use resources and take actions aimed at increasing their profits by playing according to the rules of open and free competition without fraud or forgery.» (Hopkins, 2016)
Another definition of CSR is in the so-called theory of participation, which offers a whole range of types of business responsibility to various groups of the public that come into contact with it in one way or another: company personnel, shareholders, consumers, government bodies, trade unions, business associations, suppliers and even competitors (Kravchenko, 2019).
Both concepts cannot be called completely incompatible: supporters of the theory of participation consider shareholders as one of the CSR groups.
Thus, CSR has been composed as a result of profound transformation in the relations between private enterprises and society: in the post-industrial economy, the latter wants not only to buy “more and more good goods”, but to know what their environmental and social costs are (Malloy, 2007).
The challenges of globalization played an important role, which forced companies to look for increasingly sophisticated methods of positioning in an oversaturated world.
No one should underestimate the value of personal interest of business consultants in the new market of services for designing, consulting, evaluating and validating social activities of companies and increasing their own relevant demand (Kytle, 2008).
Today, the term «corporate social responsibility» is so popular that the search for a given combination of words in the English-language part of the Internet retrieves more than a million links. The following definition can be found in the documents of the European Commission: «Corporate social responsibility is inherently a concept that reflects the voluntary decision of companies to participate in improving society and protecting the environment» (Rodriguez-Fernandez, 2016). The Association of Russian Managers defines this phenomenon as «the voluntary contribution of business to the development of society in the social, economic and environmental spheres, directly related to the core business of the company and going beyond the minimum specified by law» (Ovagimyan, 2020).

1.1.2 Corporate social responsibility: organization types

It seems important to divide the social policy of the corporation in accordance with its addressees into internal and external ones (Sotsialnoye predprinimatelstvo, 2015)
Internal corporate social policy is the social policy pursued for employees of their company, and therefore limited by the scope of this particular company.
External corporate social policy is the social policy pursued for the local community in the territory of the particular company or its individual enterprises (Steenkamp, 2017).
Internal corporate social policy is based on the prevailing opinion of society regarding the necessity for a company not only to provide profit and pay taxes, but also to take care of its employees. However, the company sends business not clear signals regarding its wishes. Therefore, the company often forms social policies based on its own ideas about this concept.
Typically, domestic investment programs do not go beyond the following costs:

• staff development, raising the professional qualification level of employees;
• formation of corporate culture;
• recreation and rehabilitation of employees and members of their families;
• attraction and support of young employees, including educational programs;
• sports programs;
• financial assistance;
• assistance to veterans and employees working for a long period of time;
• implementation of various children’s programs (Weiss, 1998).

Internal corporate policy is usually aimed both at the development of social capital, by strengthening relations, including informal, between employees, as well as between company management and employees, and at the growth of the human capital (health, education) of employees (McIntosh, 2016).
More and more companies are participating in various external social projects (federal and regional), initiated both by the government and independently as well.