Industrial action to measure and improve corporate responsibility's ...

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Industrial action to measure and improve corporate responsibility's ...

Industrial action to measure and improve corporate responsibility’s results:

theoretical and practical arguments.

Rafael Tello

Luana Dapieve

Luisa Valentim

Cláudio Boechat

The capacity of corporate responsibility practices to improve companies’ competitive

performance is not very clear, although research projects have found correlation between

them at different levels. The main problem is to determine the causality, which usually can be

recognized only in case studies.

At the business level, many case studies have concluded that a more responsible management

based on dialogue with stakeholders can improve company competitiveness (FAHI, ROCHE

and WEINER, 2005). That is so because answering and recognizing the stakeholders’

necessities can strengthen the relationship between them and the company, foreseeing risks

and opportunities for the company in its sector. As by-products, firms can enhance efficiency

and productivity.

On the national level, in 2005 an initiative of both, the London-based NGO AccountAbility

and Brazilian business school Fundação Dom Cabral, was to measure the relationship

between responsible practices and environment and the competitiveness of countries/nations

(ACCOUNTABILITY and FUNDAÇÃO DOM CABRAL, 2005). It was the second version

of the Responsible Competitiveness Report with improved indexes to analyze that

relationship. The statistical changes on the National Responsible Competitiveness Index and

the Responsible Competitiveness Index made them more robust and trustful. Even with the

changes, once again a strong correlation was found – more than 80% – between the

responsible practices and the competitive economic levels of the countries

(ACCOUNTABILITY and FUNDAÇÃO DOM CABRAL, 2005). It was found that many

countries have a strong performance inequality between these two parameters. This suggests

that despite the capacity of corporate responsibility to foster economic results of companies, it

does not spread to the national competitiveness environment naturally. In other words, it

could mean that responsible business practices are not being properly explored in achieving

higher levels of competitiveness in each country. Some good examples are China, United

Arab Emirates, Algeria and Tunisia.

This paper proposes the use of coordinated industrial action to spread the results of each

firm’s responsible practices to other companies in its sector. This kind of organization is

recommended because companies have similar stakeholders but different management

systems (HUNT, 1999) which make benchmarking and networks possible and easier to do.

Many business associations already collect data from their associates and publish the results

to the wider public. But, until today, the capacity of these institutions is much underestimated

(HÄMÄLÄINEN, 2003). Once they have access to information from the whole industry they

can easily find best practices in the industry and coordinate benchmarking initiatives.

Additionally, these associations are quite able to identify general weaknesses among their

associates and therefore are able to propose mature projects to coordinate combined efforts of

companies, government, universities and/or international institutions to solve those and thus,

broaden the positive effects of responsible practices.


In Brazil many associations have already organized information about responsible practices

and results of their associates. This action has two main effects: (1) they inform their

stakeholders and the society how the companies are performing and, what results they

produce; (2) stimulate other companies to set out responsible practices and monitor their

actions and results. These results can already help institutions, managers and governments to

evaluate the impact caused by these companies as responsible agents. Undoubtedly these

results can be improved not only if the associations recognize their potential, but also when

they adopt the appropriate tools to find and spread best practices and to coordinate industrial

responsible activities.

Despite the positive effects of isolated sectorial actions to improve the responsible

performance of the industries, to developing countries the real benefits depend on the

simultaneous improvement of their competitiveness. So, it is quite important that the

associations are able to develop their capacity of coordination. They can build up the

programs to implement the responsible competitiveness of their members and finally, turn

them into real promoters of the sustainable development.

In order to validate such assumptions, we will present actions done by Brazilian associations

that improved the responsible practices of their associates, and brought about broad results to

the sector as a whole. It may help other companies, in Brazil or abroad, to build up their own

programs.

COMPETITIVENESS AND CSR AT THE BUSINESS LEVEL

Competitiveness is a concept originally developed to observe and compare the performance of

companies or sectors (HÄMÄLÄINEN, 2003; KRUGMAN, 1994; KUPFER, 1991; LALL,

2001). Authors claimed that firms obtained competitiveness by reducing prices or enhancing

productivity (PORTER, 1990). The study of companies’ ability to improve their performance

was neglected with the dominance of the neoclassical research in economics. Since the perfect

competition theory is a pillar of neoclassical economics, it was impossible for companies to

differentiate themselves and reap higher profits in a sector (HUNT, 1999).

Researches about companies’ capacity to gain competitiveness continued in many fields:

evolutionary economics, Heterogeneous demand theory, historical tradition, Resource-based

tradition, Competence-based tradition, etc. The authors observed, in different ways, that

companies were not homogeneous and that their paths of development were distinct (HUNT,

1999). This indicates that companies could organize themselves and act in unique ways,

obtaining different performances or competitiveness. The inclusion of path-dependency on the

analysis avoids the tendency to equilibrium, so companies could build long lasting

competitive advantages.

According to Porter (2006) some of the sources of these advantages are innovative capability,

strategy, quality of products and processes. These sources are internal to the company, but it

is embedded in a region (city, state, country, etc). So, the firm depends on many institutional

aspects provided by the region’s land, society and government, and these factors impact on

their competitiveness (WEF, 2006; IMD, 2006). Companies’ activities have impacts on their

regions and elsewhere, because of the globalization. This new scenario highlighted

competitive issues, especially with the rise of China and India, whose companies are gaining

market share at high pace through the exploration of cheap resources.


The conducts of companies and their consequences to society is one of the themes on the

competitiveness debate. Many developed countries are concerned with the effect of China and

India’s growth in their economies. Their argument to protect domestic companies is based on

accusations of bad economic behavior (inadequate working conditions, pollution, disrespect

of international treaties, etc) of Asian companies to reduce costs and offer cheaper prices to

consumers. In spite of protests of governments, the view that we support is that Asian

companies are providing cheaper products to the world, improving purchase power, obtaining

new consumers and pushing economic growth.

Global economy exposes the contradictory preferences of persons: as consumers they want

cheaper and better products, but as citizens they also want companies to respect their

stakeholders. Most companies are focusing in one objective, and the bigger ones are deciding

to improve financial results, cutting costs with reallocation of the production to developing

countries or firing many workers. Some recent examples are GM, Ford, Nike and even

Lenovo, a Chinese company.

In some ways it is possible to associate the development of cheaper and better products and

the improvement of the companies’ responsible behavior. This is a challenge for firms to

promote Sustainable Development (SCHALTEGGER et al, 2002). Some companies are

successful in achieving good results at both goals simultaneously, such as AEG group. That

for long times focused on the improvement of the efficiency of its products. These companies

are trying to satisfy this new consumer and consequently build competitive advantages that

may not result in higher performance today, but will become crucial to define leaders of

future markets (KUPFER, 1991). To summarize these changes, the International NGO

AccountAbility created in 2003 the concept Responsible Competitiveness (ZADEK et al,

2003). It was developed and in 2005 its definition was:

The Responsible Competitiveness means markets where businesses are

systematically and comprehensively rewarded for more responsible practices

and penalized for the converse. Strategies for realizing Responsible

Competitiveness aim to enhance productivity by shaping business strategies and

practices, and the context in which they operate, to take explicit account of their

social, economic and environmental impacts. (ACCOUNTABILITY; FUNDAÇÃO

DOM CABRAL, 2005, pg 8)

Some authors describe competitive benefits achieved with responsible behavior. Schaltegger

et alli (2002) affirm that companies that include in their strategy efforts to solve those issues

develop new business opportunities, such as development of new markets and new marketing

possibilities and reduction of production costs. Also, with a larger vision of their business and

challenges, firms improve their capacity to discover, evaluate and prevent risks. Scholars

interested in innovation also highlight the importance of a broader view to increase the

chances of an innovation becoming successful in the market (ADNER, 2006). Many real

examples are given by Fahi, Roche and Weiner (2005). In their book, one chapter presents

possible improvements that companies can gather with Corporate Social Responsibility (CSR)

and some real examples are used to illustrate it.

CSR seems to increase companies’ capacity to improve their competitiveness, maybe even

helping them differentiate themselves (BRUNO, 2006), increasing their perceived value to the

consumers. But does this capacity remain effective at the country level, once companies have

different management systems and strategies? How correlated are public and private


esponsibility to national competitiveness? Are regions with responsible companies and an

adequate institutional environment more competitive?

COMPETITIVENESS AND CSR AT NATIONAL LEVEL

The question of the relevance of the competition of countries is older than Adam Smith’s

seminal book “The Wealth of the Nations”. Heretofore, the mercantilism claimed that a

positive trade balance would make a country richer. Classical authors argued that human labor

was responsible for it, criticizing the promotion of exports and control of imports. One of

them was Ricardo, who developed the theory of comparative advantage. In his view trade

could improve the welfare of the countries, as long as they organize their production trying to

minimize opportunity costs of production (WALTER, 2005). The Ricardian view dominated

economic analysis of international trade.

The most famous criticism to it was done by Michael Porter (1990). His argument was based

on a dynamic approach, on the importance of absolute advantages, once international

resources were flexible, and on the evidence that societies (governments, companies, research

centres, etc) are capable of creating their advantages, regardless resources endowment

(PORTER, 2006; WALTER, 2006). Hämäläinen (2003) argues that competitive analysis is

extremely important because of its holistic perspective and its capacity to measure the

potential economic growth of a country in a global market (see HÄMÄLÄINEN, 2003,

chap.1). He points out that research tradition did not have anything that differentiates it from

other theories 1 , and he tries to overcome this weakness including the analysis of

organizational issues in his theory, defending that it is a major determinant of a country’s

competitiveness.

Nowadays people in different positions and countries are concerned with national

competitiveness, but what this means is unclear. The term is associated with economic

growth, welfare, prosperity, etc. 2 Although it is not a precise concept, the growth of national

competitiveness is a goal to governments of the USA and the European Union, which

developed competitive strategies and empowered institutions to realize them (WALTER,

2005; WEF, 2006). A broader range of elements that impact a country’s competitiveness

(IMD, 2006; WEF, 2006) imply that governments with a focus on competitive improvements

must not only consider economic variables, but also law, public institutions, education, health,

S&T, among others. 3

The broader view is an evolution on the analysis of the conditions of a country to create

wealth and support development, but it is not enough. The competitive view does not consider

many aspects connected to the sustainability of countries’ growth processes. So, it is

necessary to include new variables in present models or create new ones that allow the

observation of new aspects, adequate with long-lasting growth rates.

The first Responsible Competitiveness Report (ZADEK et al, 2003) tried to overcome this

problem integrating responsibility variables, aggregated in the National Corporate

Responsibility (NCRI). The NCRI was later connected to WEF’s Growth Competitiveness

Index (GCI), creating the Responsible Competitiveness Index (RCI). The main objectives of

1 For more details see Lall, 2001

2 Walter (2005) shows many concepts given by many institutions.

3 The IMD measure the competitiveness of the nations with 325 variables compiled in 4 pillars. The WEF uses

126 variables in 9 pillars.


the index were to check the relationship between CSR and competitiveness, and how intense

was it and what happened to the ranking of the WEF if responsibility was included in the

competitiveness index.

Fifty countries were studied and ranked. The results showed that there was a strong

correlation between CSR and competitiveness although in some countries the difference on

the performance was significant. This means that most countries had similar competitive and

responsible performance. Countries in different situation formed two groups. The first

included countries with competitive improvement but irresponsible practices, risking the

sustainability of the process and postponing part of the costs generated in the present. The

other group had better responsible practices than competitive performance, which means that

their companies were not able to build competitive advantages based on responsible practices

(ZADEK et al, 2003).

These were important conclusions, but statistical problems made them dubious. For this

reason, in 2005 AccountAbility and Brazilian Business School Fundação Dom Cabral

developed a second version of the index, with theoretical and statistical improvements

(ACCOUNTABILITY and FDC, 2005). The new index was built with hard data collected in

international institutions and with soft data of the Executive Opinion Survey, done by WEF

and achieved a sample of 83 countries.

Most of the changes were directed to improve the NCRI. It was completely rebuild. The new

index had three pillars instead of the seven from the previous version:

1. Internal Dimension: includes variables about proactive actions of CSR

2. External Dimension: includes variables of the pressure done by society and

government from where companies are settled

3. Environment: includes variables about efforts to preserve natural environment and its

results

The methodology of the RCI remained the same, with the NCRI being integrated into the

RCI. Only statistical methods changed, with the use of factorial analysis to aggregate the data

in pillars and to do RCI and the generation of regression expressions to estimate the

importance of each pillar on national responsible competitiveness. The statistical method also

defined the importance of each pillar in NCRI and RCI (ACCOUNTABILITY and FDC,

2005). 4

The argument of the importance of responsible competitiveness was more accurate because

the indexes had many statistical improvements to make it more robust, and though they

showed similar results to those found in the first report (ACCOUNTABILITY and FDC,

2005). The new report showed an 85% correlation (Annex 1).

The Table on Annex 1 shows the performance of African Countries on the study and other

countries with high performance gaps. The points under the curve are countries with better

competitiveness than responsibility results. The countries with greater disparities are the

USA, China, and United Arab Emirates. Africa, Tunisia, Morocco and Algeria are the

4 The regression for the National Corporate Responsibility Index was: NCRI = 0.35 F1 + 0.33 F2 + 0.27 F3,

where F1 refers to Internal Dimension, F2 to external dimension, and F3 to Environmental management.

The regression for the Responsible Competitiveness Index was: RCI = 0.35 X 1 + 0.32 X 2 + 0.19 X 3 + 0.15 X 4,

where X1 refers to the NCRI, X2 to Macro environment, X3 to Public Institutions, and X4 to Technology.


countries with the higher gaps. On the other side, the Philippines, Slovenia and Ireland are the

most representative countries of the World, and South Africa and Nigeria the African ones. 5

Despite its significant correlation, it is not able to determine a causality relationship,

something that would be possible, with econometrical analysis. In this article we will argue

and propose a proactive way that companies can organize themselves to improve their

responsible actions and in a second moment, become more competitive through these actions.

All the countries should improve their performance in social and environmental issues in

order to achieve a sustainable development (SCHALTEGGER et al, 2002). However, in this

article we focus our attention on those countries with high performance gap, because it is

easier to establish priorities and the strong and quick actions are needed to guarantee a

sustained growth process or the alignment of business processes and the responsible

environment.

BRIDGING THE GAP

National economic systems are more dynamic and complex with trade liberalization,

development of information and communication technologies and higher specialization of

companies and workers (HÄMÄLÄINEN, 2003). These are characteristics of the knowledge

or learning economy, where intangible goods are more relevant than tangible ones. In this

new scenario, information and the coordination capacity become extremely important to

businesses’, industries’ and countries’ development.

Following Hämäläinen’s (2003) arguments that the growth’s, trade’s and competitiveness’

authors did not analyze the static and dynamic organization of the resources in an economy,

because they follow the Smithian ‘invisible hand’ metaphor, and assume that the resources are

used in their maximal efficiency. In an always bigger and more complex and specialized

economy, the market (price) mechanism is not capable of organizing efficiently the

production, distribution and evolution of products and services. So, the author attributes to

organizational efficiency of an economic system the same importance as the quality of

resources, technologies and product market 6 .

The facts exposed earlier showed a correlation among responsible practices and companies’

and countries’ competitiveness. However, observing table 1, it is possible to see that some

countries are unable to extend the results from micro to macroenvironment. One of the

possible hypotheses for this problem is a lack of organizational efficiency in countries with

high performance gaps. In the Responsible Competitiveness Report (ACCOUNTABILITY

AND FDC, 2005) the authors raise a question related to this point is already:

5

28 countries of the sample showed a significant gap, 12 with a predominance of responsibility and 16 of

competitiveness.

6

The author points four kinds of organizational efficiencies:

1. Allocative efficiency – describes how well the resources are allocated in the economy.

2. Technical (X-)efficiency – describes the efficiency of workers and technologies used inside the

companies.

3. Coordination efficiency – describes the efficiency of the coordination of activities of the agents in a

economy, with the objective to get the higher aggregated revenue.

4. Dynamic efficiency – describes how well an economy develops its organizational efficiency in a

dynamic perspective.


(...) corporate responsibility to date has meant, low-level. Incremental

change for an important but relatively small proposition of the

business community. (…) The question is how can business working

with others, get beyond the constraining first mover disadvantages and

prisoners’ dilemmas in shaping markets to support a broader, deeper

responsible competitiveness? (ACCOUNTABILITY and FDC, 2005.

pg 40)

Another problem for a society that wants to organize itself is to expand practices and spread

good results: which organizational alternative to use. Hämäläinen (2003) presents a brief

exposition of Coase’s work. This author created the concepts of transactional and

management costs when he tried to determine the reason of the transactions being realized in

the market, inside a company or through government actions. He considers them alternative

forms of organization, used according to the cost involved in the transaction

(HÄMÄLÄINEN, 2003).

Hämäläinen (2003) recognizes the importance and precision of Coase’s conclusions, but

points out three other forms of organizations, that were not important or did not exist at the

time, but are relevant in the present economic systems. The first is the supranational

institutions, which have had increased power with stronger economic and political

international integration. Since our perspective is national these institutions will not be

considered here. The other two forms are non-profit organizations – which some call nongovernmental

organizations – and companies’ networks. These organizations developed and

became more relevant with the new techno economic paradigm, because inter alia the

knowledge is more complex and spread among different agents, the higher pace of

technological development, of the increase of the competition, and the appearance of new

social and environmental issues. These kinds of organizational forms are very flexible and can

be used in many different fields and situations, so they can be placed between market

transactions and internal transactions in a company or between the later and governmental

transactions (HÄMÄLÄINEN, 2003).

In the Responsible Competitiveness Report (ACCOUNTABILITY AND FDC, 2005), it is

argued that the “bridge” to take companies’ results to national level is the exploitation of

clusters, where the main company would influence its suppliers and clients to adopt more

responsible practices. In Brazil, it is difficult to rely on this kind of cooperation, because there

are few clusters in the country. Even collaborations in supply chains are not a major practice.

In a survey done by Mendonça, Viana and Resende (2006) with big companies in the biggest

Brazilian supply chains showed that only 34% of the companies said they have collaborative

practices and 26% did not plan to collaborate. Because the establishment of a partnership

involves a long process of cognitive and working practices’ adjustment, and mutual

confidence building, it would take a long time to adjust the environment to make cluster

collaboration works. In countries where business relationships are similar to Brazilian ones,

organization through clusters may have less chance to be successful.

Another difficulty of using clusters to expand responsible results is the considerable

differences among the companies that form them. Companies in a cluster sell different

products, have different sizes and deal with different stakeholders. This is very good to

stimulate plurality, but reduces the capacity of the main company to help the other ones,

because problems, agents involved and resources are different. The applicability of past

experiences is also small.


In our point of view an industrial approach would have much more success. The Responsible

Competitiveness Report (ACCOUNTABILITY AND FDC, 2005: 115) recommends the

formulation of sector-based strategies, to create tools of implementation and measurement of

impacts. Even being for cluster organization, AccountAbility Recognizes the importance of

industrial focus and action.

In Brazil many competing companies unite themselves in associations to represent their

interests with the government and to work together to solve problems or develop themes of

their interest. Since one association represent many companies, it is possible to influence a

high percentage of the national GDP involving few agents, what facilitates organization and

planning. 7

The first argument in favor of that is institutional. The industry associations were formed by

mutual efforts of competitors, to achieve similar goals. On one hand, the costs to organize

companies are reduced, once the association already exists. On the other hand, the working

groups and association’s management are done by people of different companies, creating

confidence among individuals that improve capacity of collaboration.

The second favorable argument refers to learning capacity. Many associates are competitors,

which mean they buy from similar suppliers, use similar productive processes, and sell similar

products to similar clients. Despite of all these similarities, they have different managerial

systems with different focuses (HUNT, 1999). It is possible to conclude that competitors have

very similar stakeholders, but different actions to deal with them. So it is ideal to do

benchmarking inside the industry. We conclude that if associations act proactively they can

select best practices and stimulate experience exchanges that increase chances of successful

actions implementation, and reduce costs of planning.

Associations are responsible for collecting companies’ data and it is a place for discussions

and mutual work. These characteristics make associations a good place to find common

problems faced by companies. Once again the similarity of companies increases the chance of

equal perception of the problem by different associates. So, another possibility for

associations to increase companies’ competitiveness is by proactive organizations of network

projects, which can include other partners, such as government, NGOs and international

institutions to contribute with important resources such as money, know how, and technology

(HÄMÄLAINEN, 2003).

So we argue that countries with a gap between competitiveness and responsible performance

should use industrial organization to reduce it. Especially in countries with low levels of

business collaboration, where the exploration of the supply chain may not be the already

existing institutions should be used more effectively and efficiently.

BRAZILIAN INDUSTRIAL REAL EXAMPLES

In Brazil, some industrial sectors have used companies associations to spread the culture of

CSR and to promote the sustainable development of this area. The organizations join

companies that are interested in developing themselves and being distinguished in the market

7 For example: food producers’ association represents companies that are responsible for 9% of the Brazilian

GDP. Chemical industries’ and machinery and equipment producers’ associations represent 4% each.


in a competitive and constructive way for their sector. They offer a series of services that used

to be done internally and now tend to be executed by a cooperative and associative form,

resulting in reduction of the costs of each company.

The Brazilian chemical industry has ABIQUIM – Associação Brasileira da Indústria Química

(Brazilian Chemical Industry Association) – with the function of propagating the sustainable

development. The associated companies are not only looking to be recognized for

contributing to the environment preservation, but they also want to take financial advantage

for themselves. Some results expected by companies are: improvement of the quality of their

products, income and jobs creation, and reduction of financial and material resources in the

production.

In 1992, the “Atuação Responsável” Program (the Brazilian version of the Responsible Care

Program) was created by ABIQUIM. The focus of this program is:

"To supply to the Brazilian chemical industry and to the workers of the sector the

knowledge and the tools to face better the complex changes dictated for new

requirements of a society worried in creating and fortifying for the bases the

sustainable development."

(ROLHO, Atuação Responsável Program)

The “Atuação Responsável” Report 2006 (Brazilian Responsible Care Annual Report) brings

important information about the 104 companies who had been part of the research. They had

informed that in 2005 the investments on environment had reached R$181,240,894.00 and the

R$156,055,735.00 expenditures for 40,828,775 tons per year as production. The investments

in health and security of the worker had also been great in 2005, R$ 31,188,593.00, it has

done a significant improvement in the accident indexes with this preventive politics.

Investment within the good management of the resources showed that these expenses had

compensated according to the economy that it got in the production.

Saved resources Expenses 2004 Expenses 2005 Saved money in coparison

with 2004

Water R$ 7,50/t R$ 5,00/t R$2,50/t

Lauching of

effluents

Energy (fossil fuel) R$ 1,00/t

R$ 40 milhões

Eletric energy R$ 1,30/t

R$ 52 milhões

Source: Adapted from “Atuação Responsável” Report 2006

3,05m 3 /t 2,75m 3 /t R$0,40/t

R$ 16.413.248,00

The Program “Atuação Responsável” of ABIQUIM is an example of how an industrial

association organizes the industry’s data, stimulates companies to act with responsibility and

communicate the improvements to all. Companies are satisfied with the results. The industry

gains with these actions, because it informs the stakeholders of the actions taken. Companies

can benefit from free advertisement and better resource allocation in responsible practices

avoiding double expenses and opening opportunities to collaboration. Other associations also

follow this strategy, as, for example, ABRE – Associação Brasileira de Embalagem (Brazilian

Association of Packaging), ABIT – Associação Brasileira da Indústria Têxtil e Confecção

(Brazilian Textile and Apparel Industry Association), ABIMAQ – Associação Brasileira da


Indústria e Máquinas e Equipamentos (Brazilian Association of Industrial Machines and

Equipment) – and others.

ABIQUIM also organized a handbook to orient companies to organize their surrounding

communities. This was done after their associates’ complaints of the difficulties to understand

the claims of their neighbors. The association discovered that companies had better

relationship with the inhabitants when negotiations were done with a community council that

represents them. So ABIQUIM put together successful practices and advises to build these

councils in a handbook directed to their associates. Companies were benefited with a faster

and better solution to solve their problems. They also improved their dialogue’s capacity,

what could end up improving their responsibility.

In the industry of paper and pulp a similar scene is observed with the participation of the

BRACELPA – Associação Brasileira de Celulose e Papel (Brazilian Cellulose and Paper

Association) – as conducer. The Socio-Environmental Report 2005, launched by the

BRACELPA, shows a research carried out with 36 companies, 85% of the salable production

of pulp and paper in Brazil. It presents pointers that give a clear idea of the commitment of the

sector with the sustainable development. The participant companies had told that, in 2005,

they had invested the following values:

Payments R$ 1,6 bilion

Workers participation in the results R$ 119 milions

Transport R$ 58,8 milions

Direct Jobs Feeding R$ 110,7 milions

Trainigs and campaings (occupational health) R$ 36,3 milions

Doctor assistence R$ 123,1 milions

Professional education R$ 38,8 milions

Environment preservation area (2,6 milions he) R$ 916,5 milions

Comunities actions

Source: Adapted from “Socio-Environmental” Report 2005

R$ 11,3 milions

More than divulging the general data of the sector’s companies who participated in the

research, BRACELPA also makes public the social performances of each associated

company. The role of associates is exposed in the document “2005 Pulp and Paper Industry

Social Responsibility Report”. In it, the association highlights successful initiatives

companies’ responsible policies and social actions.

In general, the mining sector in Brazil invested U$ 1.06 billion in environment from 1994 to

2004 and intends to invest more than U$ 189 million every year between 2005 and 2010

according to the IBS – Instituto Brasileiro de Siderurgia (Brazilian Steel Institute), the

association of the industry. In IBS’s website, companies can show their practices in

technological, financial and responsible fields. The largest national mining companies have

great social projects which are accessible through the IBS website.

CONCLUSION

This paper tried to show some evidences that CSR and competitive performance can be

achieved together and that the first can stimulate the last. The Responsible Competitiveness

researches showed that many countries were not successful in the two fields simultaneously.


The literature review was done not to discover the roots of the problem, but to raise an

alternative solution to the countries that face it. Institutional economics’ and competitiveness’

literature helped us building this proposal, the real examples support our beliefs, but applied

researches are still necessary to validate these conclusions.

The analysis of the business environment’s organization can raise new issues to researchers

and policymakers dedicated to find solutions to improve competitive and responsible

performance of companies. Our main conclusions are that these solutions should vary

according to the economic activities’ organization and that industrial organization may result

in better results for companies because it allows easier benchmarking and network projects.

We suggest that countries with weaker productive chain collaboration tradition should prefer

this solution and explore existing institutions that involve leaders and workers of different

companies to improve collaborative inclination and reduce costs to organize the agents.

Although much has been already done, there is still much to be done in Brazil to improve the

power of responsible actions to raise the competitiveness of the companies. But today many

stakeholders have access to robust and organized industrial data. Companies already know

what is done by its competitors, and since this field is not considered strategic, it can result in

exchange of experiences and collaboration.

Organization can increase the pace of dissemination of responsible actions through industry

and improve their quality in consequence of continuous learning and knowledge exchanging.

However, organization of companies does not occur naturally, it must be done by rational

agents. In Brazil we believe that associations are good institutions to do that because of its

formation and trust is higher inside it. Other countries should study their institutional

environment and find the most appropriate organization to put companies together and

stimulate coordinated and collective plans and actions.

Other countries can use Brazilian examples to create their own solutions to improve

themselves responsibly and economically. But it is important, first of all to understand their

own characteristics in order to define the better way to stimulate knowledge exchange and

cooperation among companies, NGOs and government. It is important that the readers

understand that our propose is not to suppress other solution possibilities, but to offer another

alternative to countries with different economic organizations that need to find cheap and

quick actions to offer to their populations higher economic, social and environmental revenue.


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ABIQUIM. Relatório de Atuação Responsável 2006 (Brazilian Responsible Care Annual

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Creating corporate value through performance, conformance and responsibility (West

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changing determinants of economic performance in the world economy (Cheltenham: Edward

Elgar)

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265

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evaluations of the Global Competitiveness Report’, World Development 29(9) (mês 2001):

1501 – 1525

MENDONÇA, Guilherme Dayrell; VIANA, Luna Flores; RESENDE, Paulo Tarso Vilela

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Microeconomic Foundations of Prosperity: Findings from the Business Competitiveness

Index’, The Global Competitiveness Report (Hempshire: Palgrave)

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Konzepte und Instrumente zur nachhaltigen Unternehmensentwicklung. Berlin:

Bundesministerium für Umwelt

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ZADEK, Simon at al (2003) Responsible competitiveness: corporate responsibility cluster in

action (Copenhagen: Accountability)


Source: Authors’ elaboration

ANNEX 1: Growth Competitiveness Index X National Corporate Responsibility Index

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