corporate social responsibility as a valuable contribution to ...

Ewa Mazur-Wierzbicka
Microeconomics Department
University of Szczecin
CORPORATE SOCIAL RESPONSIBILITY AS A VALUABLE
CONTRIBUTION TO IMPROVEMENT IN THE COMPETITIVENESS
OF ENTERPRISE
Abstract
Corporate social responsibility is a concept thanks to which enterprises, while
generating the profit, voluntarily take social interests and environmental balance maintenance
into account in their economic strategies. Such a responsibility is carried out via establishing
honest relations with customers, employees, owners and investors, suppliers, competitors and
local community.
Therefore, responsible business does not indicate only meeting all formal and legal
requirements. It does not refer to the simplest forms of philanthropy or sponsoring cultural
events as, though the above may be of profound importance to the fulfillment of certain
strategic objectives, it is still not enough for achieving competitiveness and effectiveness.
Responsible business is a strategic and long-term approach based on social dialogue rules and
seeking for new solutions that are advantageous to everyone.
The author of the present article introduces the concept of corporate social
responsibility and indicates benefits that both enterprise and society can obtain as a result of
the implementation of this concept. Finally, practical examples of applying socially
responsible business are presented at the end.
Keywords: corporate social responsibility, benefits, competitiveness, enterprise
Introduction
Social responsibility of entrepreneurs, understood as a voluntary dealing with needs
expressed by stakeholders in the corporate strategy, is a notion that is becoming more and
more popular in business circles. Firms begin to take actions in favour of local communities
or environmental protection into account in their strategies as they assume that requirements
laid down by employees are not always capable of forecasting all social determinants and are
not always enough for establishing perfect relations with stakeholders. At the same time,
developing good relations with all stakeholders can be a major element improving the
competitiveness of enterprise.
Nowadays, the importance of social involvement, as an element influencing the
development of enterprise, is emphasized as well. It also vital to make this concept an integral
part of business world and its everyday practice. Firms functioning on a global market more
and more often base their actions on different types of codes of practice, publish social
reports, appoint managers for ethical matters and social responsibility as well as share their
experience in this scope. They also use ethics while doing business.
When a firm is socially responsible, it enjoys a number of benefits (together with a
society). This fact has a positive influence on employees, natural environment, society, and
the firm itself strengthens its position on the market and improves its image. Although the

20 Ewa Mazur-Wierzbicka
concept is widely discussed in academic circles, during conferences, symposiums and in
publications (always a theoretical basis), it is put into practice to a small extent. All the more
should this concept be emphasized and discussed on the forum of firms that have
implemented it and enjoy benefits accruing from this fact. Unfortunately, there are also many
firms that, apart from declarations and propagating the idea of responsible business, do not
have very much to do with the concept of responsible business. Nevertheless, it is expected
that stakeholders will verify such behavior fast.
Concept of corporate social responsibility – main issues
The origins of responsible business were connected with philanthropy and the United
States where the first modern firm was established. At the end of the 19 th century, an idea
emerged in the US, that had become particularly popular during the period of the Great
Depression, according to which businessmen should be responsible to society. Modern view
on corporate social responsibility (CSR) appeared in the 1950’s thanks to Howard Bowen. In
“Social Responsibilities of the Businessman” he explained that business activity affected
ordinary people and society and so business ought to take such actions that would be coherent
with social objectives and values. In the following years, it had been shown that corporate
social responsibility drew businessmen’s attention to special relations between a businessman
and society, of which the firm should be aware.
In the 1960’s and 1970’s, a discussion on ethics in business took place in the USA,
which laid foundations of modern tools such as, e.g. social audit.
At first, the concept of corporate social responsibility was not well-known in Europe
and did not arouse much interest due to a different way in which EU Member States divided
their national income. However, the concept has become more and more popular also in
Europe as a result of growing competitive advantage of the USA and more and more frequent
difficulties with offering social guarantees of Welfare State.
Both in the USA and Europe, theory was put into practice. In the 1990’s new trends
and concepts such as sustainable development or corporate citizenship were developed.
Nowadays, the center of gravity in the development of CSR has been transferred from the
United States to Europe (Great Britain in particular where the government has even appointed
a Minister for CSR).
In order to analyze how CSR concept had been developing, one might follow through
(after Rok, 2004) three ways that had led to the construal of responsible business models.
The first one was the concept of sustainable development that appeared in the 1960’s
and 1970’s. According to it, development processes began to be analyzed holistically and
understood not only as economic indicators but also as environmental and social ones. The
main argument calling for this concept was the fact that during the period of the Cold War
humankind understood dangers in not so much military terms (resulting from the pursuing of
ideological policy by the United States and the USRR) as in terms of global dangers resulting
from limited natural resources and also large-scale exploitation of these resources.
Furthermore, the category of profit, hitherto belonging only to the economic world, found its
reflection also in other dimensions, namely environmental (where profit began to be defined
as conditions favorable environmentally to the existence of people and communities) and
social dimensions (in the case of which profit was understood as social bonds in local
community, friendly climate for community members in the form of, e.g. employment). The
aforementioned change in comprehending the role of enterprise resulted from the assumption
according to which economy was not an autonomous sphere of life, which meant that it was
not separated from society. As a consequence, it was concluded that economic sphere of life
was an integral part of society.

Corporate Social Responsibility as a Valuable Contribution to Improvement ... 21
The second way involved civil pressure expressed by the fact that citizens were not
very willing to enable enterprises to take actions contradictory to their everyday life. In other
words, capitalism oriented only to making a profit began to criticized as a result of human
rights development and civil society. Consumer movement, environmental protection
movement or animal rights protection movement played a profound role in these actions.
The third way was connected with business self-regulation. Most of all, social
movement appeared within capitalism and business itself, and referred to the reduction in
corruption and frauds in business, greater transparency and the occurrence of so-called
positive practices, i.e. relations with clients or relations with consumers (Rok, 2004).
Globalization processes that took place until the end of the 1980’s were the next giant
step in the development of this notion. It was then that enterprises and organizations became
an equal actor in international economic and political relations. This led not only to the
reduction in the role of state but also imposed a new philosophy, with reference to
communities or actors in whom the capital was invested, on enterprises and particularly on
MNC’s (Multinational Corporations) and TNC’s (Transnational Corporations). Easy flow of
capital, that is controlled by corporations, contributes also to the fact that, among other things,
capital is recalled from areas in which no profit accrues to a corporation, however, certain
social problems and questions are left behind in communities in the form of, for instance
unemployment. Therefore, the responsibility faced by corporations when their profits are very
often higher or equal to the country in which they make investments and pursue their policies
began to be emphasized.
Globalization is also caused by fiscal pressure on public institutions, which has
contributed to the fact that a new form of cooperation between social partnership (so-called
public private partnership) and its role in development has been established. Therefore, there
is a growing awareness of adapting this form of partnership to activities of firms. In other
words, people have begun to think in different terms recently, which indicates that
responsibility for the functioning of society is accepted not only by governmental structures
but also by other actors such as enterprises.
In the era of globalization, one cannot forget about the evolution of social awareness,
and hence greater importance of intangible values. Reflective current stresses new features
determining long-term competitiveness of firms such as ability to create and develop
trademarks based on values cherished by key social groups (Moeller, Eldar, 2003).
Factors such as globalization, new forms of cooperation between business and public
authorities and increasing social awareness of values in economy and social life developed
thinking in terms of responsibility.
Drawing up the general guidelines for MNC’s during OECD forum in 1976 was an
example of the above ideas. The guidelines referred to the following spheres: employment
relations, corruption elimination, environmental protection and consumer protection. On the
other hand, rules about conducting economic activity were introduced in 1994 during
international business environment by the so-called Caux Round Table. These rules referred
to the following issues (Rok, 2004):
• responsibility to stakeholders,
• no acting against the law
• respect for the environment
• supporting multilateral trade
• respect for legal regulations
• beyond the letter of the law toward trust
• toward innovations, justice and world community.
Despite uniform trends and tendencies, it is possible to differentiate between American
and European models of CSR. In the case of the former, charity work and philanthropy of

22 Ewa Mazur-Wierzbicka
enterprises are mainly highlighted, which means that while generating economic profit, firms
allocate a part of it to local communities, citizens or other actors (beneficiaries). Nevertheless,
European current has criticized the above model. In Europe, community was not understood
as homo economicus that reduced the activity of enterprises only to financial assistance but in
a holistic way in which responsibility was understood more as actions referring to social
issues in every sense of the word. Responsibility assumed by an enterprise is its sustained
activity in a local community demonstrated by, for example participation in social actions or
continuous cooperation with public authorities. Nevertheless, the development and character
of CSR model depends on Welfare model adopted in particular European countries. It is
assumed that the scope and range of firms’ involvement in local communities reflects Welfare
models and socio-political structures across Europe.
In 2001, i.e. a year after the Lisbon Strategy, European Commission presented Green
Paper on Corporate Social Responsibility. This concept has become one of elements
important to economic policy of the EU. It is defined as a concept of voluntary including
social tasks in the scope of environmental protection among enterprise’s regular business
practice and relations with all interested partners (after Communication from the Commission
concerning Corporate Social Responsibility: Business Contribution to Sustainable
Development, COM (2002) 347 dated July 2, 2002). Hence, responsible business combines
individual entrepreneurial tendencies and attitude necessary to set up and run a small
company in a wider context of social responsibility (Responsible Business, 2004).
As stated by Rok (Rok, 2004), this idea introduced major changes to economic policy
due to greater and greater social expectations and changing consumer awareness, due to the
need for reliable economic policy pursued by the EU and due to a long-term economic
efficiency of enterprises. Therefore, an assumption has been made that propagating the civil
attitudes in enterprises provides better conditions for the competitiveness of European
economy. Another important assumption refers to the fact that responsible business forms a
basis for management strategy that, through social dialogue at a local level, contributes to
global competitiveness and at the same time offers conditions favorable to social and
economic development.
Philosophy of corporate social responsibility construed in such a way has found its
reflection in, among other things, strategic and long-term approach based on social dialogue
and looking for solutions favorable to everyone.
CSR is defined in many different ways. For instance, according to Davis and Blomstrom,
social responsibility should be treated as the obligation of the management of a corporation to
take such decisions and actions that contribute both to attention to its own interest
(multiplying the profit made by enterprise) as well as protection and multiplication of social
welfare (Davis, Blomstrom, 1975).
Bowen claims that CSR is a duty imposed on entrepreneur to pursue such a policy of decision
making or following such a path that would lead to achieving a desirable goal and a value to
society (Carroll, 1999).
According to Frederik, social responsibility indicates that a businessman should forecast such
actions of economic system so that he would be able to meet social expectations (Frederick,
1960).
All the aforementioned definitions of CSR encompass a clear attitude toward fair rules of
running business in the context of social response and creating a social contribution as well as
cause and effect relationship between behavioral patterns adopted and mechanisms for
making decisions to the advantage of society.
Hence, it is clear that the concept of CSR may be defined in a number of ways. One
may make attempt to systemize these definitions and assume that first of all, CSR is defined
via generating sustainable profit and establishing relations with all stakeholders. Secondly, it

Corporate Social Responsibility as a Valuable Contribution to Improvement ... 23
is a management tool. Thirdly, it is a philosophy of conducting business activity on the basis
of relations with actors, among others, with employees, clients, suppliers, shareholders,
competitors and local community. Fourthly, it refers to the development of competitive
advantage on the market that would be based on providing sustainable value. Fifthly, it is
aimed at providing services and products in the way that does not damage natural and social
environment. Sixthly, it is related to running the business while taking ethical values into
account. Seventhly, it is nothing more than running the business in accordance with social
expectations. Finally, it is aimed at making a contribution to sustainable development through
cooperation with employees.
The above definitions are based on the concept of a firm oriented to stakeholders –
social groups and individuals that can influence or are affected by enterprise via its products,
strategies and manufacturing processes, management systems and procedures.
The notion of a stakeholder is of key importance in the model of corporate social
responsibility. It is one of the most important notions as it encompasses all the actors
participating in the game, i.e. actions taken by enterprises to create a community.
Defined in such a way, corporate social responsibility is a process, i.e. a constantly
changing series of events. It refers to relations among financial, social and environmental
responsibility. In practice, financial investments made by enterprises are aimed not only at
creating organizational structures but also at looking after the environment in which they
function as well as social conditions (for instance, jobs, close relations with local community
or public authorities). It is directly related with ‘Triple Bottom Line’ approach whose main
idea emphasizes the organization of sustainable development and security, which minimizes
negative environmental influence. That being so, the model of corporate social responsibility
(CSR) may be defined as a participation in sustainable development (Observatory Survey
2002). In other words, CSR is defined as a voluntary integration of social and environmental
issues in enterprises and their relations with stakeholders.
Corporate social responsibility model may have a conscious or unconscious form. In
the former case, actors have knowledge and are characterized by taking responsibility for
themselves, their enterprises and environment. However, the form of socially responsible
activity that is unconscious can be found in practice as well. This is refers to taking actions
connected with stakeholders and social or environmental involvement. Nevertheless, actors do
not have knowledge of CSR and/or are not aware of the fact that the activity should be
undertaken in accordance with assumptions made.
Furthermore, it is also worth indicating internal and external dimensions of CSR. The
former involves human resource management, ethical programmes for employees, industrial
safety, ability to adjust to changes, environmental protection management, corporate
supervision rules.
External dimension of CSR refers to local community that determines the rules
concerning the cooperation with NGO and other organizations such as contracting partners
and customers. In this case, it is also vital to recognize human rights or global environmental
programmes, which derives from the assumption that enterprises are an integral element of
local communities, and at the same time community is defined administratively, with
prospects of enterprise’s functioning and prospects of a cluster, i.e. cooperating enterprises.
These three dimensions of localness make up the definition of local community in which
enterprise in engaged (Moelle, Eldar 2003).
Apart from Green Paper, another document on corporate social responsibility was
White Paper. White Paper: Communication on CSR presents actions in the following spheres:
a) education – actions consisting in the exchange of experience and good practices
(examining the influence of CSR on business and the environment, exchange of CSR
experience among firms, development of managerial skills);

24 Ewa Mazur-Wierzbicka
b) development of corporate social responsibility tools (ethical code, management
standards, product labelling, socially responsible investments);
c) initiating the European Multi-stakeholder Forum;
d) CSR included in all EU policies – employment policy, economic policy,
environmental policy, consumer policy and foreign policy (Rok, 2004).
In this case, the model of social responsibility was combined with the Lisbon Strategy
which intended growth in European economy until 2010 via, among other things, the
improvement in the competitiveness of economy. European Campaign on Corporate Social
Responsibility 2005 conducted by CRS Europe is one of effects produced by the Lisbon
Strategy. The campaign is aimed at:
• disseminating the idea of corporate social responsibility in business circles;
• propagating good examples of implementing responsible practices in business;
• education of present and future leaders.
As CSR is going to be verified in practice, circles interested in this matter have created
indicators showing the presence of CSR in particular enterprises. As far as the literature on
the subject is concerned, the following indicators are mentioned:
• economic – e.g. investment indicator, innovativeness, R&D outlays
• environmental – waste disposed, number of times that environmental norms have been
broken
• employee-related – average female wage/salary, the wage differential, ratio between
training budget and operational costs, number of employees participating in training,
percentage of employees organized in labour unions, number of new employees
• industrial safety – hospitalized accidents/number of employees, sick notes expressed
in hours, number of car accidents/hours worked
• social involvement – funds for social projects, number of projects received from social
organizations, tax rates and local charges
• referring to relations with business partners – average time within which invoices are
paid, number of suppliers’ jobs supported, number of complaints accepted.
Benefits accruing from using CSR
Benefits accruing from running responsible business are enjoyed both by firms and
society. They depend on obligations taken on by firms to a large extent. However, one should
remember that social responsibility begins where the influence of the law ends. Speaking of
real CSR, one means making various forms of investments in community or the environment
voluntarily.
Benefits enjoyed by firms and society depend to a great extent on the level of
obligations incurred by firms that implement systems of social responsibility. As far as the
model presenting different motivation for assuming such obligations is concerned, it is
possible to distinguish three levels though it is not always plausible to determine motivation
explicitly (at the second and third levels in particular).
The first level of responsibility refers to taking social or environmental actions
required by the law. These actions are not programmes in the scope of CSR (in the true sense
of the word) but obviously in a social sense and they reflect well on a firm. Examples of such
actions are as follows: paying wages/salaries on time, complying with labour legislation,
conforming to emission norms. Then, it is an imposed responsibility that results from the
necessity to obey legal regulations.
The second level refers to all the projects carried out and aimed at reducing the
negative effects that the activity of enterprise have on natural environment or social
environment both internal as well as external. These projects are not required by the law and

Corporate Social Responsibility as a Valuable Contribution to Improvement ... 25
are managed voluntarily. They are usually a response to pressure from employees, nongovernmental
organizations or local authorities. The following actions can be quoted as
examples here: organizing a system of employee transport to the place of work, providing
workers with soundproof screen even if noise level does not exceed permissible levels,
organizing the kindergarten for employees’ children. In this case, it is an imposed
responsibility taken on as a result of pressure from society but in the interest of a firm.
The third level assumes making various forms of investments in community or the
environment voluntarily. These are the programmes initiated by a firm that reflect a long-term
concern for social and economic development of a particular region, and improvement in
inhabitants’ standard of living. In this case, it is possible to talk about conscious responsibility
when enterprise undertakes initiative as a result of its sense of “citizenship” (corporate
citizenship). Actions taken by a firm in accordance with social responsibility rules may bring
a number of various benefits, namely external (referring to environment of a firm) and
internal (referring to relations inside a firm and its employees). Society enjoys certain benefits
as well. The scale of these benefits depends on taken within social responsibility and the level
of obligations taken on the scope of actions by the management. Social expectations are
becoming greater and greater with market development and maturity. The more firms accept
conscious responsibility connected with the creation of social value added, the less
considerable benefits accrue from assuming only imposed responsibility. Table 1 shows
benefits accruing from CSR and enjoyed by firms and society.
Table 1. Benefits accruing from running responsible business
Benefits Type Description
to a firm
Growing interest from
investors
Greater loyalty from
consumers and
stakeholders
Improvement in
relations with
community and local
authorities
Firms that take social dimension into account in their strategies can
have easier access to financing. Creditors are more interested in the
cooperation with firms that, apart from good financial results, are at
the same time managed in a transparent way, create their image and
relations with environment responsibly, than with the ones which
do not do so. For many investors, financial reliability of a firm
depends on its social reliability.
Greater social awareness of consumers leads to the fact that while
making a choice, they are guided by the trust they have in a
particular firm and its image. Modern consumer is more and more
often an aware consumer. Apart from fair price and good quality,
he/she expects a product or service to have positive associations. A
larger group of consumers pays attention to the “ecological” values
of product or service, if a firm obeys the rules of social
responsibility while creating them as well as the general standing of
a business.
Participation of firm in the life of local community as well as
making long-term and notable social investments facilitate its
effective and peaceful functioning. Social responsibility enables a
firm to become deeply rooted in community and win favour with
its members and also local authorities’ trust.
Improvement
competitiveness
in
Introduction of responsible business rules is one of advantages
thanks to which firms win competitive advantage. For Polish firms,
transparent CSR policy may be one of means for establishing their
position on world markets where expectations about meeting
responsible business standards are much more confident.

26 Ewa Mazur-Wierzbicka
Improvement in
organizational culture of
a firm
Through taking up the challenges from social responsibility, a firm
improves its standards of behaviour toward stakeholders
(employees, contractors, clients), and hence avoids costs of “bad
partnership”. These changes shape organizational culture of a firm
based on trust, responsibility and transparency for all the interested.
Developing the positive
image of a firm among
employees
Social responsibility of a firm is one of elements of non-financial
motivating the employees. Thanks to ethical codes, social
programmes and attention to the environment, the image of a firm
improves in employee’s eyes. Employees recognize the functioning
of a firm when they see that a part of its activity is oriented to
solving crucial – also to them – social problems.
social
Recruiting and keeping
the best employees
Exposing and solving
major social problems
Education of society
When the image of a firm improves and it enjoys greater
employees’ trust, a firm becomes more attractive on a labour
market, which enables it to attract new and keep the best
employees.
Firms may occupy a crucial role in solving major social problems.
Supporting and initiating social campaigns or programmes, they
contribute to exposing of a given problem, engaging in civil
conduct, reducing the scale of a problem or even solving it.
Through actions that are in accordance with social responsibility
standards, firms promote these rules in the business world and
make other contracting partners as well as competitors apply them.
They also have an effect on citizens – consumers, and make them
aware of the weight of such issues as responsibility in economic
life, fair competition, attention to natural environment, tolerance
and respect for human rights.
Improvement in the
state of natural
environment
Access to information
concerning a firm
Carrying out environmental programmes, firms help protect natural
environment and contribute to its improvement and reduction in
pollution level. They often engage in educational actions aimed at
increasing the environmental awareness.
Such actions as the publication of data concerning the
responsibility strategy of a firm to its stakeholders in the form
social report, external audit carried out in a firm, and also the
presentation of concrete results of a firm in environmental, social
and economic spheres are major factors motivating to achieve
better and better results and carry out more and more well-thoughtout
social programmes.
Respect for human
rights
Introduction of ethical codes and training into a firm and
responsible management of human resources create a common
social ground on which more considerable weight is attached to the
recognition of fundamental human rights.
Source: based on Rok, B.: Odpowiedzialny biznes w nieodpowiedzialnym świecie,
www.gazeta-it.pl (November 15, 2007)
In mallenbaker.net portal, information about the survey conducted for IBM was
presented. The survey referred to the influence of CSR on development, policy and image of
firms and c.a. 250 largest world enterprises participated in it.
The results of the survey show that corporate social responsibility helps firms be more
competitive on the market. 68 per cent of respondents stated that paying attention to CSR was
helpful in making larger sums of money, and 54 per cent believed that it gave them a free

Corporate Social Responsibility as a Valuable Contribution to Improvement ... 27
hand while competing. About three fourths of respondents stated they provided their
shareholders and other partners with better access to information on their campaigns from
now on.
Firms that invest in CSR may emphasize their contribution to a particular venture and
present benefits they gain from such actions right away. Besides, such firms are perceived as
modern enterprises that establish standards, understand customers and respond to their needs,
as well as pay attention to the effect exerted by products they manufacture (mallenbaker.net,
2008).
Nevertheless, a kind of superficiality can be noticed in the case of corporate social
responsibility rules. More is said about responsibility than done. Hence, firms implementing
the integral responsibility programmes face even a greater challenge. Furthermore, it should
be stated that declarations not supported by actions may bring loss to a firm as social
awareness of different groups of stakeholders is growing fast. Especially if they find out that
there are firms that really act responsibly.
In practice, before firms present solemn declarations concerning the implementation of
social responsibility concept, they should analyse certain issues and elements helpful in the
creation of social responsibility management system. These issues are as follows (Rok, 2007):
1. Identification of key external and internal stakeholders.
2. Development of a long-term plan and mission of a firm paying attention to values
important to corporate strategy.
3. Formulation of priorities in the scope of social policy.
4. Appointing persons responsible for pursuing the social policy (managerial staff and
employees from particular departments).
5. Analysis of hitherto existing programmes and obligations taken on by a firm to groups of
stakeholders in recent years.
6. Detailed analysis of social responsibility strategies in firms under consideration (in trades).
7. Organization of meetings with representatives of the most important groups of stakeholders
in order to get to know mutual expectations.
8. Formulation of social policy rules.
9. Establishing specific principles on the basis of existing determinants (legal regulations,
voluntary obligations, operational aims, financial outlays).
10. Development and implementation of strategies with reference to particular groups of
stakeholders.
11. Proper communication and information in the scope of social policy.
12. Training and advisory services in the scope of social policy pursued.
13. Establishing and selecting methods for indicator assessment (KPI – key performance
indicators, i.e. selection of key instructions).
14. Reporting (writing down the rules, ways of realization, results).
15. Control and review of results by managers – external audit.
16. Involving the suppliers in the programme (determination of expectations and suggestions).
17. Improvement in human resources management system in enterprises.
18. Propagation of rules among all the stakeholders (everyone treated equally).
19. Open door policy and external communication (social reports, publications, lectures,
seminars).
20. Recognizing social policy and external policy as key elements in organizational policy,
involving groups of stake holders in management.
One should also pay attention to the fact that (despite many benefits accruing from
CSR and firms that will really put CSR concept in practice) behaviour of some firms will not
be in accordance with CSR rules. This consists mainly in the fact that some firms become
involved in social initiatives in order to improve their image or regain the standing of a

28 Ewa Mazur-Wierzbicka
business. The largest oil companies are very often criticized for, among other things,
destroying the environment in countries where they extract. Royal Dutch Shell is criticized
mainly for its involvement in Nigeria. According to Greenpeace, activity of this oil company
has caused serious damage to the environment in the Niger delta and ended in a tragedy of
Ogoni tribe inhabiting this area. Shell is also accused of using its influences in this country
and crushing the resistance of native people. At the same time, the company in question
propagates a sustainable exploitation of energy and environmental protection, is involved in
the fulfilment of the UN Millennium Development Goals and invests in biodiversity. This is
one of examples showing a situation in which a firm takes actions to improve its image via
“cosmetic changes”. Such “good deeds” differ from CSR in that the former are not voluntarily
but only necessary actions aimed at the reconstruction or improvement in the standing of a
business.
Improving the competitiveness of enterprises thanks to CSR – practical examples
Although CSR is usually examined in the context of large enterprises, it is also a
strategic tool for improving the competitiveness of SME. However, certain effects are very
often difficult to measure and some time may pass before they are notable. CSR may affect
the competitiveness of SME positively in the following ways:
• Development of products and/or production results in greater customer satisfaction
and loyalty
• Stronger motivation and greater loyalty from employees translates into greater
creativity and innovativeness
• Greater publicity as a result of awards received and/or whispered marketing
• Better position on the labor market and easier cooperation with business partners and
public administration, and easier access to public funds resulting from positive image
of a firm
• Cost savings and larger profit due to more effective allocation of human and
production resources
• Increase in turnover/sales via winning competitive advantage as a result of the
aforementioned aspects
Practical approach to CSR may have diverse character and does not have to be complex
or connected with large financial outlays. SME are usually active in one or several CSR
spheres (holistic approach). Main CSR spheres under examination include market, employees,
society, environment.
Market
Employees
CSR in European SME
Environment
Society
Holistic approach

Corporate Social Responsibility as a Valuable Contribution to Improvement ... 29
The first sphere involves CSR actions addressed to employees. Initiatives addressed to
employees deals with the following:
• improvement in working conditions (taken industrial safety into account) and
professional satisfaction
• balance between professional and private life
• equal opportunities, diversity of training and professional development of employees
(including career planning)
• communication/informing employees and involving them in decision making process
in a firm
• responsible and fair remuneration or financial assistance to the employed (e.g. systems
of old-age insurances, interest-free loans)
Behavior of such firms as “denkstatt GmgH” from Austria and “MELBUD Sp. z. o.o.” from
Poland can be quoted as examples of CSR actions addressed to employees in European SME.
A small advisory company “denkstatt GmgH” from Austria provides its employees with fruit
and milk free of charge and employees cook healthy dishes together during working hours.
Furthermore, the firm offers a possibility of taking a “nap” (a short 20 minutes long
regeneration sleep). Pot plants create family and friendly atmosphere.
“MELBUD Sp. z o.o.” from Poland, a medium-sized enterprise from construction industry,
has an internal social fund from which cultural, educational and sport packages for employees
(e.g. Christmas vouchers) are financed. The best employees can raise a loan the repayment of
which may be partly remitted. Employees have a feeling of professional stability and also
identify with a firm. This, in turn, creates better atmosphere and greater involvement.
The second CSR sphere are actions addressed to society. Initiatives undertaken by
firms in this scope may refer to:
• social integration and/or integration with labour market at the level of community
• improvement in local infrastructure
• financial or material assistance from local public institutions (e.g. schools, hospitals,
groups acting in favour of environmental protection, cultural institutions, sports and
recreations centers, etc.)
• support for society understood in a wider context (e.g. population in developing
countries)
In practice, actions taken by firms in favour of society can be observed e.g. in “Stormberg
AS” firm from Norway or in Polish firm “Toolbox Creative Communications”.
“Stormberg AS”, a small wholesale warehouse from Norway, recruits at least 25 % of its
employees among persons whose situation on the labour market is unfavourable. At the
moment, almost 30 % of its employees are ex-prisoners, students expelled from schools or
persons who cope with drug addiction. The firm has loyal employees and benefits from their
small rotation and low level of absence. Only four employees have left firm since it was
established, i.e. since 1998.
A small PR agency “Toolbox Creative Communications (TCC)” provides non-governmental
organization acting in favour of Polish-Jewish dialogue (through promoting cultural diversity
and teaching tolerance via education) with PR services (e.g. contacts with the media,
organization of press conferences, creation of websites or cooperation with journalists) free of
charge. The firm has established new contacts and won new customers. Furthermore, more
than ten paragraphs about CRS actions taken by the firm have been published in specialist
(PR & Marketing) websites.
Market is another CSR sphere taken into account. CSR actions directed to this sphere
involve customers on the one hand, and business partners and suppliers on the other hand.
Particular ventures may deal with:
• actions aimed at improving the quality and safety of products

30 Ewa Mazur-Wierzbicka
• providing customers with volunteer services
• fair price policy
• ethical advertising activity
• regulation of obligations toward suppliers and business partners on time
• cooperation with local partners
• propagation of standards via supply chains
• support for reaching local/regional business agreements.
“Opteam” firm from Finland and “Deante Antczak Sp.J.” from Poland can be cited as
practical examples.
“Opteam”, a medium-sized firm, is a franchise network of personal services that pays special
attention to individual situation of particular employees by offering them flexible employment
conditions which make them are adjusted to needs identified by employees and hence
rotation of employees is minimized. Furthermore, the firm provides workers with special
training programmes.
“DEANTE Antczak Sp.J.” is a medium-sized enterprise from Poland that deals with
wholesale of kitchen and bathroom products and offers customers a seven-year guarantee for
products sold – longer than it is usually offered on the market. Moreover, customers are
provided with effective technical and guarantee service. Thanks to good image (equated with
a high quality of products), the firm has gained new clients and reduced the rotation of
employees.
Another sphere involves CSR actions in favour of natural environment. CSR
initiatives in the scope of environmental protection refer to:
• designing environment friendly products and production processes
• effective exploitation of resources
• reducing waste produced and pollution emitted
• using the ”environmental assessment” of suppliers in the context of environmental
standards
• informing business partners, customers and society about issues relating to
environmental protection
CSR actions taken by European SME in favour of environmental protection can be observed
in “Maja’s Salong” firm from Norway and “LUMAG Sp. z o.o.” from Poland.
A small hairdresser’s “Maja’s Salong” from Norway puts CSR rules into practice by
managing the waste in the way that involves their sorting and recycling, saving the energy by
turning off the lights at night, and by using only as much water, shampoo and hair cosmetics
as necessary. Furthermore, the firm is actively involved in establishing the environmental
standards for the sector in which it functions. These actions are of great value not only from
the environmental point of view but also allow to save money through cost reduction.
“LUMAG Sp. z o.o.” is a medium-sized Polish enterprise functioning in automotive sector
that manages not only waste produced within a firm but also collects and recycles its products
once they have been used up and removed from vehicles. Elements created as a result of
recycling may be used as a component of materials for the production of new elements of
breaking systems. What is more, asbestos has never been used in the production process, and
prescriptions worked out in firm’s laboratory do not contain any heavy metals that could pose
a danger to natural environment or vehicle users. Firm has a good reputation in the opinion of
local community and is perceived as honest and thriving enterprise.
Many small and medium-sized enterprises do not focus only on one sphere of CSR but
represent a holistic approach. i.e. combine various aspects of these actions. Norway firm “AS
Marex” and Romanian company “SC TUV KARPAT SRL” are examples of enterprises that
have adopted holistic approach to CSR in European SME.

Corporate Social Responsibility as a Valuable Contribution to Improvement ... 31
“AS Marex” is a medium-sized Norwegian enterprise that supports charity every year and
cares about the environment (e.g. sorts and recycles waste), guarantees sustainable
employment, provides its employees with medical care and training, and offers jobs to
persons who need professional training. “SC TUV KARPAT SRL” is a counselling micro
enterprise from Romania that offers its employees training, looks after the improvement in
their working environment (e.g. modern computers, flexible working hours, greater security)
and mutual communication. It devotes a lot of attention to customers, and services it provides
are adjusted to quality standards established by the firm itself. Furthermore, business partners
are taken into account in firm’s training plans and the firm has been awarded ISO 14001
certificate and organizes training courses in the scope of environmental issues (KMU
Forschung Austria, 2005).
CSR concept is becoming more and more important to small and medium
entrepreneurs in the business world. Putting the concept into practice is becoming more and
more common, which is reflected in the fact that the number of entrepreneurs participating in
“Fair Play Enterprise” contest is growing every year (in 1998. there were 39 firms – winners,
whereas in 2007 this number was 721). It also turns out that firms are more willing to involve
in these actions when the atmosphere is favourable to ethical behaviour. This fact is
connected, among other things, with changes in public opinion, social involvement, spreading
the message of firms, that conduct their activity in accordance with ethical rules, in the media.
It is also very important to encourage ethical behaviour and introduce changes within
organizations through training. Thanks to external audit, firms and stakeholders can find out
that the concept has been put into practice. Firms awarded are certain that economic success
must go hand in hand with moral success. Awards for entrepreneurs who stand out are in a
way an incentive for other firms to act in a moral way.
Conclusion
CSR is developing in various ways depending on a sector, geographical area and legal
system, due to which every country as well as every firm are unique. It was assumed that CSR
is a voluntary activity that goes beyond legal norms. Yet, different policy is pursed in e.g. the
United States and different in Europe. Corporate social responsibility is connected with
relation between business and society. This relation was subject to change as a result of
changes brought about to business by globalization. Business had to find the way in which it
could respond to new social expectations and face up a new role.
CSR concept does not concern only large firms (as it is suggested by the word
“corporate”) but also to small and medium-sized ones, which is usually referred to as
responsible entrepreneurship. What is more, CSR is becoming more and more universal as a
social responsibility (SR) in which sustainable development plays a major role and which
refers to various organizations, i.e. not only firms but also non-governmental organizations or
government departments.
Contrary to appearances, CSR is a complex domain as it concerns economy, society
together with its values, power relations in corporate environment and relations between a
firm and its external environment.
In practice, CSR is developing dynamically, which is reflected in strategic
implementation of CSR in firms. Besides, applying CSR principles has a positive effect on the
competitiveness of SME sector. It allows to improve products due to which customers are
more satisfied and loyal. Stronger motivation and greater involvement of employees translates
into greater creativity and innovativeness. A positive image of a firm is created and hence the
situation in the labour market is improving and cooperation with business partners is
becoming greater and greater. Thanks to the aforementioned aspects, sales increase and

32 Ewa Mazur-Wierzbicka
competitive advantage is gained.
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