Public Listed Companies and Fund Managers - Academic ...

Aurica Briscaru and Georgiana Corcaci
2. Normative function of corporate social responsibility management
In the center of the contemporary application of institutional theory regarding the study of
organizations, is the proposition that the organization is created as available social institutions
(Friedland and Alford, 1991, Meyer and Rowan, 1977, Zucker, 1988). Social institutions can be
thought of as social forms and associated social norms (Czarniawska, 1997). It is suggested that the
social structure provides the rules, the axiological register of entitlement and decision making that
design and imply an ethical infrastructure.
The normative function refers to the business organizations’ conformity, in everything it undertakes, to
the milieu constrains and expectances. Coherence between internal and external statements and
regulations is materialized in the organizational values of its culture and voluntary exposed in the
codes. These provides the desirable conducts in the internal work processes and inter-relationally
models with external socio-economic entities. Shortly, the normative function is a continuum of
organization adaptation and anticipation to the following organizational aims:
To discipline the organizational internal behaviors;
To comply to the external normative system;
To voluntary cross the law codes to approach the social legitimacy.
We appreciate this function is what the Polanyi, since 1944, has called the ‘embeddedness’ of
economics. ‘Embeddedness’ underlines that economic activity is created and shaped by political
decisions, social conventions, and shared norms and meanings. Although free markets are often
misperceived as natural, sovereign, self contained, and self-regulating, a market economy cannot
exist independently of the society and rules in which it is located. Embedding markets are essentially
a political activity of building institution. Institutions are enduring rules for making important (economic)
decisions.
The normative function is a self-disciplinary process for organizations but mostly directed by the
circumstances of the economic development and the social conscience maturity of the environment.
Indicators and standards for ‘moral business’ or ‘active citizenship’ seem to be in charge mostly in the
economically developed countries. The baselines of Maslow’s pyramid of needs were crossed a long
time ago in these societies. In the developing countries voluntary normative institutions are more of a
shape without consistence. In this environment, the multinationals become more Romans than
Romans and their ‘glocalyties’ failed in the favor of indigene habitudes with a large relativity of the
normative function but with the maximal profitability.
Briefly, today the design and adequacy of a self-normative infrastructure reflects the evolutionary
stadium of the business organization, from the mandatory to the responsible, but strongly correlated
to a society conscious of its power of influence. As consequence, the social legitimacy of the
organization depends, according to the tolerance scale, on the amorality of every location.
2.1 Credibility versus reputation
Social legitimacy is a method of social acceptance of a juridical recognized status, and based on it, of
a ‘comply conducts’ presumption in terms of company civism. The lack of compliance to the
environment’s expectations, in the sense of dissonance between the companies’ real conducts and
the socially regulated moral standards, should represents a motivation for losing credibility towards
the business co-interested groups. In the business organization, the credibility reference system
signifies reputation. Many theoreticians consider there is no clear limitation between credibility and
reputation. „Corporate reputation is the consensus of perceptions about how a firm will behave in any
given situation, based on what people know about it, including financial performance. (...) But
corporate reputation is not about likeability; it’s about the predictibility of behavior and likelihood that a
company will meet expectations” (Sandberg, 2002: 3). Even though the two subjects are treated as
having the same sense, we still believe that reputation leads to positive and favorable association with
the firms’ products, correlating more with consumer acquisition behaviors. Reputation is essentially
the external assessment of a company or any other organization held by external stakeholders, and it
refers to technical capabilities and competences, standards of professionalism and brand (e.g. baby
care products and Procter & Gamble brand). Whilst credibility would be the capability and power of
the organization to inspire social trust, unlimited by circumstances. It represents the belief, the
presumption that ‘P & G couldn’t…’. It represents the transfer of the reputation in the moral value
28