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The Corporate Social Responsibility in the Czech Republic
Ondrej Castek
castek@econ.muni.cz

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Content of the lecture
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1.What is CSR
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2.Why is it important
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3.What are the differences

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What is the Corporate Social Responsibility

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Fall 2009, Ondrej Castek: castek@econ.muni.cz
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What is the Corporate Social Responsibility
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nPerhaps
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nVoluntary integration of social and environmental goals into everyday life

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How?
nBusiness area:
n No corruption
n Transparency
n Good relationships with customers, shareholders, business partners
n Intelectual property protection
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nSocial area:
n Filantrophy
n Human rights
n Equal opportunities
n Community engagement
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nEnviromental area:
n Efficient production
n Enviroment friendly behavior on all levels

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Why?
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n License to operate
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n Avoiding additional taxation or regulation
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n Competitive Advantage
n through extra value for a customer
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Needs – Values (Maslow’s Hierarchy)

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History of CSR
nEarly works
n M. P. Follett, 1918, 1924:  social problems are not only a government matter
n Ch. Barnard, 1938: the purpose of business existence is to serve the society
n J. M. Clark, 1939: Social Control of Business
n T. Kreps, 1940: Measurement of the Social Performance of Business

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History of CSR
nConditions
n excess of demand over supply
n enormous labor specialization
n need for large amounts of capital
n growth of capital intensity

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History of CSR
nBoom
n H. Bowen, 1953: Social Responsibilities of a Businessman
n A. B. Carroll: A Three Dimensional Conceptual Model of Corporate Performance.
n Mid: 70s a project focusing CSR at Harvard Business School
n World Economic Forum Meeting (Davos), 1973: Managers’ Code of Conduct

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Three Levels of CSR Determinants
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n Government
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n Companies
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n Consumers

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Corporate level
n 64 % of companies claim, they know what CSR is
n but many of them actually don’t
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n 99 % think that CSR activities are beneficial
n but some of them only for PR purposes
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n 84 % wants to broaden their CSR activities
n most active now: employee benefits, employee education, transparency, ecology

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Number of references in annual reports
Environment protection
Quality of products and services
Enviroment protection strategy
Eployee benefits
Sponzoring
Innovations towards customers
Employee safety
Philantrophy
Innovations towards resources
Awards
Partnerships
Strategy in social policies
Equal opportunities
Anti-corruption policies
Corporate voluntarism

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Forms of CSR (%)

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Supported areas
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nSport
Social Care
Culture
Education
Environment
Health care
1 – Not at all, 2 – occasionally, 3 – significantly and systematically

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The Czech Republic – importance of stakeholders (1 – lowest, 5 – highest)

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Codes of ethics (%)

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Consumers-driven CSR
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n 2009: CZ is on 80 % of EU-27 GDP per capita average
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n 55 % of income is spent on food and housing (45 % in Austria, 65 % in Slovakia)
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n Problem with reporting about CSR activities

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The Czech Republic specifics – information sources about CSR activites
Trusted information sources
(%)
Other people
72
Own experience
65
Independent media
54
Corporate news, advertisement, website
33
Information on products
25
Preferred information sources
(%)
Information on product
48
Independent media news
47
Newspapers, TV news
45
Product brochures
44
Logos
34
Corporate PR news
27

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Czech specifics – alternatives to indexes
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n Employer of the year
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n Rhodos best companies
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n 100 most admired companies
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n 100 most infuential companies

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Would you buy a rope from recycled material?

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Czech specifics – conclusions from researches
n Higher awareness in companies with foreign owner
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n Media afraid of accusation of hidden advertisement
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n Relationship between CSP and CFP is not falsified, but was found weak if any at all
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nCSR awareness is lower in smaller companies

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Relationship between CSP and CFP (ROA)
n67 companies, 1982 - 1992
n270 correlations
nalways positive
nSource: PRESTON, L. E., O’BENNON, D. P., 1997, p. 426.
Causality
Correlation (year)
Communities
Employees
Customers
Quality of the relationship with the group depends on ROA
0,4990
(1990)
0,6410 (1990)
0,5831 (1990)
Synergic effect
0,4715
(1983)
0,6019 (1989)
0,5513 (1989)
ROA depends on the quality of the relationship with the group
0,4064
(1992)
0,5172 (1992)
0,4792 (1989)

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Relationship between CSP and CFP
n82 studies, 1972 - 2003
nSource: ALLOUCHE, J., LAROCHE, P., 2005, p. 24
Relationship between
Sample size
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Average partial correlation
1. CSP and CFP (whole sample)
373
0.143
(0.135 až 0.151)
2a. CSP and CFP without corporate environmental performance
289
0.145
(0.137 až 0.154)
2b. CSP and CFP with corporate environmental performance
84
0.140
(0.118 až 0.162)
3. CSP and CFP with CSP reputation
268
0.120
(0.110 až 0.129)
4. CSP a CFP with philanthropic donation
77
0.277
(0.257 až 0.298)

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nThank you for your attention