In modern society there is an increased attention to issues of social responsibility. The implementation of social projects has become an integral part of the image of any corporation and its success in the competition struggle. Business has great possibilities and therefore society expects to use them for solving social problems.
These social commitments of business open up new possibilities in building their favorable image.
Nowadays in all developed countries, the policy of social responsibility is an integral part of any successful company. The success of the company in the longterm depends largely on the amount of its investment in the social sphere of the country. In general, the image of a socially responsible company brings good results in the long run. However, different companies have different understanding of social responsibility.
In this paper it is necessary to consider the concept of corporate social responsibility, its importance and value to the company’s image.
CORPORATE SOCIAL RESPONSIBILITY (CSR) AND CREATION OF BRAND IMAGE
In 1950 – 1960-s of the last century, the concept of social responsibility appeared in corporate sphere in the United States and Canada. But it basically related to the issues of corporate philanthropy, social security of employees, as well as assistance to local authorities on a professional basis, and sponsorship. This work was connected with the functions of corporate public relations – PR. But socialization of business, which is one of the major trends of contemporary socio-economic development, appeared in the early 1990-s. (Wood D., 1991)
International Conference on Sustainable Development held in 1992 in Rio de Janeiro was a turning point, which recorded new demands from the international community to corporations to improve their social responsibility. It was a powerful impetus in the study of the role of large companies in solving social problems, and development of certain policies at the corporate, national and international levels, defining the scope of social responsibility and social functions of the business. Social responsibility has been regarded as a philosophy of corporate behavior and the concept of alignment of its activities on the most important, firstly, in terms of its strategic goals, and secondly, in terms of society’s needs, directions.
Hohnen P. and Potts J. (2007) argue that “responsible business is good business” and describe social responsibility of business as a voluntary contribution of the private sector in social development through the mechanism of social investment. Social responsibility is also seen through the prism of strategic business objectives, one of which may be the formation of a favorable image of the company. Practice shows that high corporate social responsibility can create a positive image of the company or enterprise. (Hohnen P. and Potts J., 2007, p.5)
According to the World Business Council for Sustainable Development, CSR is “the business contribution to sustainable economic development”. (World Business Council for Sustainable Development 2001)
The working definition of CSR introduced by the Working Group on Social Responsibility is “responsibility of an organisation for the impacts of its decisions and activities on society and the environment through transparent and ethical behaviour that is consistent with sustainable development and the welfare of society; takes into account the expectations of stakeholders; is in compliance with applicable law and consistent with international norms of behaviour; and is integrated throughout the organisation.” (Hohnen P. and Potts J., 2007, p. 15)
Kotler P. (2004) pointed a number of factors that give importance to the company’s ability to adequately assess the role of its activities in the field of social responsibility.
The first factor is associated with increased regulatory control. Perhaps most of all, it is felt in the field of environmental protection, health and safety in the workplace. Many of these requirements impose positive obligations on the business of keeping records and providing information as well as the introduction of monitoring and reporting system. In a broader sense, a stimulus for social responsibility of business comes from partners and stakeholders. This pressure takes many forms, the most common of which are:
– Pressure from partners, which may considered social activities as an indicator of good corporate governance and an essential element in the formation of attractive investment profile of the company.
– Pressure from the structures of ethical investment, which has become common practice in evaluating the performance of the company to examine a wide range of parameters associated with its programs of social responsibility.
– Pressure from customers and potential business partners.
– Potentially more transparent activities of the company, due to the rapid spread of information through the Internet.
– The public demand that the company must voluntarily provide the results of its work on general issues of social responsibility (for example, an already well-established trends to provide a report on the activities of companies in the field of environmental protection). (Kotler 2004)