Home - Archive - - CORPORATE SOCIAL RESPONSIBILITY AS A TOOL OF CRISIS MANAGEMENT IN UKRAINE

CORPORATE SOCIAL RESPONSIBILITY AS A TOOL OF CRISIS MANAGEMENT IN UKRAINE

CORPORATE SOCIAL RESPONSIBILITY AS A TOOL OF CRISIS MANAGEMENT IN UKRAINE

Ruban Vira, PhD in Economics, Associate professor of the Department of economics, accounting and finance, University «Ukraine» Rivne Istitute, Rivne

The purpose of this article to clarify determines the nature, importance, advantages and disadvantages of corporate social responsibility. The aim of the article is to study how corporate social responsibility is used today in Ukraine and suggest ways to improve the application of corporate social responsibility in crisis management.

Due to the today absence of significant structural changes in the economy and customers low purchasing power the society remains highly vulnerable to rising prices and tariffs. This situation has a negative impact on business in Ukraine. Businesses have to find new ways to maintain their share of consumers. In these circumstances, more than ever becomes relevant special approach to management - crisis management.

Transformation of the essence of corporate social responsibility is researched and formalized in the table. This article is an overview of the historical development of the concept of social responsibility

In theeconomiccontext ofcorporate social responsibility- along-term investmentand thuseconomic effectis focused onperspective.

However, as aresult of the implementationof social technologies, business has significant advantages: forming a positive image, increased interest offinancial agents (investors, donors, and creditors), improvedrelationswith the publicand local governments, increased motivationandstaff productivity, increase salesand Sharemarket, reduced operational costs.

A key aspect of building effective social responsibility policy is the planning and implementation of social technologies for areas of implementation, which should be grouped as follows: consumers, human rights, the employment relationship, social investments, territorial community, environment, corporate management. They explained and described.

The article examined the positive and negative aspects of the mechanisms of social responsibility. Nowadays business in Ukraine leads entrepreneurs to find and implement new effective ways to overcome the crisis. Due to the complex social and political situation in the country using the mechanisms corporate social responsibility gained weight among the instruments of crisis management.

In the article is specified the meaning of crisis management, its principles and the need for measures of social responsibility as an instrument of crisis management. The paper researched measures applying companies. Based on these data, made its own conclusions.

Keywords: corporate social responsibility, mechanisms of social responsibility, crisis management, principles of crisis management, crisis management tools.

Accession. The stabilization of economic development is impossible without the formation of socially prosperous society. The combination of market relations problems of increased attention to social issues creates the necessary conditions for economic recovery, sustained the human condition throughout the work and after its completion.

Corporate social responsibility – is a willingness to respond to the needs of society, sacrificing short-term profits.

Corporate social responsibility is manifested on the one hand, in compliance with ethical standards in the management (relationships with employees, customers, business partners, etc.) on the other - to support various social projects aimed at community groups that do not directly influence business the company.

Organization must be able to adapt and respond to problems arising in the social environment to make it more favorable for the successful management. The cost of social responsibility justified societal attitudes towards the company. This should lead to increased customer loyalty to the producers, reducing regulatory state intervention and a general improvement of society.

Analysis of research and setting tasks

Solving this problem started in the works of such world scholars as U.Kristek, J. Mitroff, E.Deminh, S.Fink, R.Hit and others.

Research results

American specialists in management say that today management will be formed under the influence of social priorities on business purposes. There are already managers who are oriented in their work on the social purpose and take on more responsibility to the community for the results of private business practices than that of its previous professional managers or owners [1].

The status of management gradually modified in the eyes of public opinion. Previously believed that management - is a system of power, and now it serves as an important resource of society.

Came the realization of the fact that a constructive social policy firms and corporations - not philanthropy, and investment in staff in social production capability, the significance of which for the future cannot be overemphasized [2].

Transformation of the essence of corporate social responsibility presented in Table 1.

A prerequisite for the development of corporate social responsibility researchers believe the formation of XVIII-XIX centuries socially responsible investing, when the owners of individual organizations to assume responsibility for workers, guided by religious or ethical beliefs [1,4].

Since the XIX century responsible investors focusing investment on the basis of moral - ethical standards and awareness of the importance of business in society. It should be noted that religious organizations and foundations generally forbade its members to invest the company that produced and sold tobacco and alcohol, and were related to the gambling industry.

Table 1 Concepts of social responsibility of business

Source/ yearapproval	Definition of the concept
BowenR./1953	corporate social responsibility -an implementation ofthe policy, such decisionsoradopt such aline of conductthat would bedesirablefrom the standpoint ofthe goals andvalues of society[1,3]
CarrollA./1979	corporate social responsibility - the complianceeconomic, legal, ethical anddiscretionaryexpectations thatsocietynominatedcompanyat any given time[4]
Businessfor corporate social responsibility/ 1990	corporate social responsibility - is to achievebusiness successwhilerespectfulattitude toethical norms, civil societyand the environment. Social responsibilityrequiresdecisionsto meet the needsof all majorstakeholder groupsin accordance with applicablelegal,ethical,commercial and otherrequirements for thebusinessof the society[4]
WorldCouncil ofSustainable Development/ 1990	corporate social responsibility - acontinuing commitmentof businessto contribute to sustainableeconomic development, working with staff,their families,the local communityandsociety at largeto improvethe quality of life[5]
European Commission/ 2001	corporate social responsibility - aconcept thatallows you to integrateinto dailycommercial activitiessocial and environmentalaspectsandconsiderthemin thevoluntarycooperationof stakeholders [5]
Association ofRussian Managers/ 2002	corporate social responsibility - avoluntary contribution ofbusinessto societyin social, economicandenvironmental spheres, whichis directly related tothe mainactivities of the enterpriseandbeyondthe statutoryminimum[4]
KotlerF./2005	corporate social responsibility - afree choicein favorofimprovingthe welfare ofthe local communitythrough an appropriateapproach to businessand the provision ofcorporate resources[5]
Memorandumabout corporate social responsibility inUkraine/ 2005	corporate social responsibility - aresponsible attitudeany companyto itsproduct or service, customers, employees, partners, active social position, whichisinharmonious coexistence, cooperation andconstant dialoguewith the community, participation in solvingthe most pressing socialproblems[4]

One of the first famous supporters of corporate social responsibility was an English industrialist, socialist - utopian Robert Owen, who developed the project improve the living conditions of workers spinning mill in Scotland.

Owen's idea need for state regulation of social - labor relations, further developed by French industrialist Daniel Legrand. Daniel Legrand proposed to implement international labor standards that have to regulate working conditions in the factories [5].

In the post-industrial society first period of formation of ideas corporate social responsibility was patronage of art. Its main drawback was episodic and fuzzy focus on the target audience. In addition, support for a particular initiative is directly dependent on the personal views and priorities owner organizations. This charity focused on culture and the arts, helping the poor and the development of education [1].

Another historic milestone of becoming corporate social responsibility was the emergence in the early twentieth century. In United States doctrine of "capitalist charity", according to which profit organizations had to donate part of the proceeds to benefit society, to finance social needs [4].

In 1905 in United States movement "Rotary" emerging whose adherents believed that financially secure citizens should contribute to improving the social situation not only in the professional sphere, but also directly to the local community in which they operate [4].

However, due to the Great Depression 30's. further development of the concept corporate social responsibility has gained only 50 s. The twentieth century. Taking center stage in discussions on business relationships and society [5].

Formulated in 1950 - 1960 рр. Corporate social responsibility concept assumes that business, in addition to compliance with laws and guarantee the quality of goods / works / services voluntarily assume the additional liabilities, thereby ensuring the improvement of quality of life and society [1].

In fact, since the end of 1980th years. commercial, public and government sectors began together to solve pressing social problems are significant communities. Under these conditions, the business has to consider the interests of stakeholders [4].

So, in fact, to the 1990s. decision on the choice of social technologies mainly taken, given the need to "implement good to seem positive." [1,5].

In the 1990's there is a transition to long-term commitments business on social issues and initiatives. Thus money to charity, not only out of the budgets of structural units, but with budgets for philanthropic purposes. Development of methods PR- and communication management in the 90s. Fixing promoted social responsibility mission [4].

The main forms of implementation of social responsibility is now PR - actions, advertising programs in the field of sports, culture and education. The effectiveness of social policy is defined payback period of investment, the pace of business development, the market share, increase profits [5].

The next step is the formation of social orientation - responsible business activities for the overall development strategy. In case of problems not investigated in terms of available resources PR-, but from the formation of positive reputation and create favorable conditions for sustainable economic development. This reoriented of business maximization profits in the short term to create the necessary conditions for long-term sustainable development conditions taking into account the interests of stakeholders [1].

The objects of social technologies at this stage are living conditions, recreation workers, improving urban infrastructure.

Today in international business - environment implementation of the principles corporate social responsibility - a component of a successful strategy that generates a positive image and reputation, attracts customers and keeps the best employees.

A key aspect of building effective social responsibility policy is the planning and implementation of social technologies for areas of implementation, which should be grouped as follows:

1. Consumers

2. Human Rights

3. The employment relationship

4. Social investments

5. Territorial community

6. Environment

7. Corporate management

1. Consumers. Business has a responsibility to accurately inform consumers about the goods / works / services using fair and transparent marketing information to encourage responsible consumption, declare and affirm constantly in practice liabilities on the production and sale of safe and quality goods / works / services.

2. Human rights. The main area of responsibility for the rights of the individual enterprises and organizations are the direct provision of respect for human rights and freedoms and non-discrimination.

3. The employment relationship. Job creation, payment of salaries and other statutory payments, ensuring safe working conditions, staff development - is incomplete range of employment which is related to social responsibility.

4. Social investments. Implementation of programs aimed at improving the social aspects of life of communities and is related to the education, training, culture, healthcare, infrastructure, improved access to information or any other activity that promotes economic and social development of the local community or individual groups.

5. Territorial community. The key areas of social development, in which business can contribute is to create jobs, provide additional opportunities for acquiring education; preservation of monuments of cultural attractions - historical heritage; providing healthcare population. You also can not rule out issues such as strengthening the institution of civil society, cultural, social and environmental programs.

6. Environment. A key priority of socially responsible business case are to reduce the negative impact of the operation through the introduction of advanced technologies, modernization of equipment, reduction of waste and emissions, and create safe working conditions at the workplace to meet the requirements of current legislation in the field of safety and environmental protection .

7. Corporate management. Good corporate management is based on the principles and practices of accountability, transparency, ethical behavior, respect for the interests of stakeholders and the rule of law, as in the decision making process and during implementation.

In the economic context of corporate social responsibility - a long-term investment and thus economic effect is focused on perspective.

However, as a result of the implementation of social technologies, business has significant advantages: forming a positive image, increased interest of financial agents (investors, donors, and creditors), improved relations with the public and local governments, increased motivation and staff productivity, increase sales and Share market, reduced operational costs.

Positive image is a powerful tool for business development and a significant competitive advantage. Strong positive reputation is a key factor in ensuring the safety and increase market share, and therefore profit in the long run. Therefore, reputation, like any other asset, a valuation [9,11].

Focuses on socially responsible business activities are more attractive to financial agents as a determining factor for the majority of them are public trust.

Implementation of Social Technologies provides a «growing» business in the local environment, creates local community commitment and confidence of local governments. In addition, the constant interest the communities helps prevent misunderstandings that will damage your reputation, in the case of possible threats or risks business can expect support.

Development and implementation of incentive programs and increased wage is a powerful motivator that generates loyalty of employees. In addition, trust staff and business environment improves rating in the labor market, allowing you to hire the best professionals.

Consumers closely watched and focus on brand marketing. Provided that a social event, supported by a marketing program is close in spirit to the consumer, or gives him positive emotions in the process of benefits - the brand is more likely to establish itself in their minds than the brand of non-social-oriented marketing

For example, the result of implementing environmental initiatives are reducing waste, reusing materials, saving water and electricity. Another significant cost reduction article - is to reduce advertising costs as socially responsible activities are advertising the brand as such.

The debates about the role of business in society have created numerous arguments against social responsibility, such as:

• Violation of the principle of maximum profit.

• Social spending.

• Lack of accountability to the public.

• Lack of ability to solve social problems is the inability to satisfy social needs, lack of professionalism.

• The use of corporate social responsibility only for advertising purposes [1,4,5].

Application of crisis management dictated by the need healing many companies operating in a state of chronic insolvency.

Implementation of crisis management - a universal measure to solve problems in the organization, despite the fact that each company has its own history and ways of improvement of his condition - unique in each case. Due to domestic and foreign scientists we have an idea about their views of the nature of crisis management, its objectives, principles and forms [6,7,8].

Research and scientific systematization of methodological approaches to the treatment of crisis management - enabled approaches to generalize the definitions of crisis management and formation author's vision.

We propose to define "crisis management" - a process of planning, organization, motivation and control exercised for the purpose of predicting the onset, prevent, or overcome the crisis, with its inevitability, the withdrawal of the crisis with minimal losses.

We proposed to define the following principles of crisis management:

Preventiveness action and vision - ahead of the crisis and take action to mitigate the effects of the crisis; vision of the future for the chosen strategy.
Alternative and complexity - the need to form parallel functional and corporate strategies and systemic crisis in the application of measures for the organization as a whole.
Willingness response and adaptability - predicting the state of the different conditions and circumstances; Preparation use the necessary tools of crisis management in case of different circumstances; crisis management ability to adapt to changes in the internal and external environment.
Efficiency and centralization - speed of reaction and control from the center.
Rationality and adequacy - application of adequate to threats and effectiveness of chosen management instruments.
Powers and responsibility - defining and providing clear boundaries and depth of authority and responsibility of management at all levels.
Discipline and control - seamless monitoring the progress of crisis management and discipline in his performance.
Communication and Image - communicating with internal and external environment, anti-crisis policy of openness in order to preserve the reputation.

In accordance with the basic principles of crisis management, determining the exercise of this type of management is application of adequate, timely and optimal management tools - methods and models used in solving problems and achieving the goals of management of its information, methodological and organizational support.

Nowadays business in Ukraine leads entrepreneurs to find and implement new effective ways to overcome the crisis. Due to the complex social and political situation in the country using the mechanisms corporate social responsibility gained weight among the instruments of crisis management.

Many Ukrainian companies from 2014-2015 years used the new actual mechanisms of social responsibility, some of them:

• help the Ukrainian army giving their products, or listing the percentage of sales, or taking part in fundraising;

• assist refugees from the Crimea and eastern regions of living in new places, employment, equipping homes, collecting clothing, household supplies and food, etc;

• help in the treatment and rehabilitation of to the wounded military

• sponsoring events that lead to the development of national culture, the dissemination Ukrainian language, national symbols and attributes;

• sponsoring events that promote the growth of patriotism and national consciousness.

We conducted research measures of social responsibility applied Ukrainian companies. The most publicized and those that are easy to find and explore measures are presented below.

Free services offer:

• «New Mail» - free delivery on the territory of the antiterrorist operation

• «Kyivstar» issued a special tariff plan with a free connection to Donbass passes office equipment and communications equipment, starter packs and recharge cards

• MTS for migrants from the eastern regions of Ukraine organized a free call forwarding to the short number 111 on the MTS government "hot line";

• life :) provides free their starter packs and recharge cards.

Cash transfer from sales, temporary promotions:

• Company "Steel-M" 5% - on any purchase

• Company Elnova, with each sale Elnova lists 500 hryvnas

• «Auchan" called "1 product = 1 Kopiyka."

• «Kalinka-malinka workshop». - 85% of the sales of certain products.

• «Galicia" of each yogurt and kefir hand over to support the Army 50 Kopiyka.

• Rozetka.ua profits from the sale of promotional products on June 18-20, has been transferred to a public organization - 1.16 million hryvnia.

Transfers funds to help the army:

• manufacturer of drugs "Farmak" - 1.1 million hryvna

• "Svarog West Group" 180 thousand. UAH

• Association Lyubashivka agricultural district, Odessa region - 70 thousand hryvna

Convey their products:

• Pharmaceutical company "Health" - more than 1.17 million UAH

• «Ichnyansky dairy-cannery" - more than 200 thousand UAH

Creation of an information platform:

• Site declared Slando, where people affected by the hostilities in the south-eastern Ukraine, as well as volunteers on their behalf can easily and quickly get support

• Company "Incom" started an information resource and a call-center for the coordination of care for people forced to leave their homes in eastern Ukraine

Job Offer:

• Prom.ua invited IT-specialists from the Donbass try to find a job in their company. In this case, if the candidates for the position held by the knowledge, skills and experience, the company pays them to move and the first 6 months of rental housing in Kiev

• Ukrainian startup Preply.com ready to employ a tutor or teacher of English refugees from the region. They can teach in Kiev, Kharkov, Dnepropetrovsk, Odessa, Donetsk, Lviv, or anywhere in the world via Skype

• DTEK today helps the company's employees, their families and residents of a territory of its activity, creating industrial parks

Employees of companies give their earnings:

three thousand employees Interpipe - took part in the action "Day earnings to help the military."
The staff of life :) participate in fundraising
collectives of "Kyiv Rus" raised funds

Evacuation or residence refugees:

• «Kyivstar» Evacuate and providing temporary housing 150 families from the area of anti-terrorist operation, including - 80 children

• A work team "Zhytomyroblenergo" supported the family of immigrants from the east Ukraine, which mostly women with children who are temporarily housed in motels "Teteriv" Korostyshiv district Zhytomyr region

Charity event to raise funds in support of the Ukrainian army and more:

• Ukrainian Association of collectors and processors of recyclables launched nationwide charity campaign that aims to raise funds in support of the Ukrainian army and improving the environmental situation in the country

• «1 + 1 media", presented the projects company "Maidan until now" (help to Maidan and counter-terrorism operation today, cleaning Independence Square, collect items and domestic charity auctions, TV programs and new programs)

Other help of the army and refugees:

«T-Style" helps army, and it provides free fighters own products knitwear
"Velmet" provides free spare parts for military equipment
Zhytomyr confectionary helps military equipment and ammunition
Favorit-Agro "Haliyevskyy creamery" helping by transport money
«NIBULON" was purchased and transferred to the consumer and computer equipment, material resources. Through the efforts of "NIBULON" created good conditions of life of Ukrainian troops
In recent months, the network "Lanet" gathered by military 124 000 UAH
MTS operator gave the army digital telecommunications equipment

Examples corporate social responsibility business in Ukraine is not a complete list and only those which offer the information to the public.

Conclusions

In Ukraine there is a constant tendency to realize the need for socially responsible behavior of different members of society, and above all - business.

Charity from the obligation becomes an important part of corporate strategy; made public more non-financial reports; virtue is the norm of corporate social behavior, shifting the emphasis of social values and priorities.

Along with economic factors on the competitiveness and profitability affect non-economic factors - the level of social security personnel, initiating programs to support hospitals, schools and orphanages, the implementation of innovative mechanisms for quality control, implementation of environmentally friendly and energy-saving technologies.

Constructive cooperation between business and non-governmental organizations contribute to effective solutions to environmental, social and demographic problems. However, in Ukraine there is a problem substituting concepts of "social responsibility" and "corporate social responsibility" concept of "charity".

So in view of the key problems of society businesses applying new approaches in the mechanisms of social responsibility.

Supporting social projects is one of the most important components of modern corporate reputation.

Detection of concern about "weak" positions the company as indifferent, preoccupied and strong.

Social projects often focused on community development and civil society organizations confirms desire to invest in the future, further development, and therefore it means its willingness to work in the market for a long time.

The role of business in conflict times becomes stronger.

Implications for personnel companies: display of patriotism and unity of workers.

Companies involved in the events of 2014 through investments in development and security staff, helping Army and internally displaced persons, as well as a developing its business.

But Businessmen and managers should choose this option social responsibility, which would provide benefits and facilitated the removal or mitigation of shortcomings.

Therefore, we can conclude that doing business in a socially responsible way leads to significant benefits, as evidenced expertise in business - structures that formed a sustainable competitive advantage by developing and implementing social technologies

Literature

Roger Baran, Robert Galka, Daniel Strunk Customer Relationship Management. Thomson South-Western. 2008. 528 p.
Davis, John A. Competitive success: how branding adds value, Wiley. 2010. 397 p.
George S. Yip, Audrey J.M Bink Managing global customers: an integrated approach, OXFORD University press. 2007. 272 p.
Waddock Sandra, Bodwell Charles Total Responsibility management: The Manual, Greenleaf Publishing Ltd. 2007. 192 p.
Leipziger Deborah The Corporate Responsibility. Code Book. Revised Second Edition, Greenleaf Publishing Ltd. 2010. 536 p.
Booth S, Crisis Management Strategy. Competition and Change in Modern Enterprises. London. 1993. 313 p.
Fink S. Crisis management. Planning for the Inevitable. Chicago. 246 p.
Mitroff, Ian I. Crisis management and environmentalism: A natural fit// California Management Review Winter 1994
Patterson, Bill. Crises impact on reputation management. Public Relations Journal. Now 1993
Krystek, U. (1987): Unternehmungskrisen. Beschreibung, Vermeidung und Bewältigung überlebenskritischer Prozesse. Wiesbaden, 1987.
Larry E. Greiner Power and Organization Development: Mobilizing Power to Implement Change. Addison-Wesley, 1988.184 p.
Shiv S. Mathur and Alfred Keyon Creating Value: Successful business strategies. – 2nd ed. – Butterworth-Heinemann publications. 2001. 383 p.
Thompson, Arthur A. Strategic management: concepts and cases Irwin, 2001. 613 p.

Надійшла до редакції: 05.12.2024 р