INTERNATIONAL SCIENTIFIC DAYS 2008

Kibler, B. A. - Oestringer, K.

Efficient management of social and corporate performance

Anotácia:
Politics, society and the economy are three dynamic processes, whose nature and character have changed dramatically over the last century, or so. Interestingly enough, this change has coincided with the extremely high rate of technological progress/change over a similar time frame. The paradigms which have generally been associated with these intrinsically interwoven processes have evolved and yet the legal, political and social constructs that delineate these processes have not. Communism and socialism have seen a marked decline in acceptance, whereas democracy and capitalism, predominantly as defined through the U.S. system, has broken new ground around the globe. In addition, the development of these processes has been very different on the opposite sides of the Atlantic, i.e., in the U.S. and the EU. The divergent socio-political and economic aims and institutions on each side of the Atlantic and their affect on corporate and overall national economic success form the crux of this work. Internationalization and globalization have striven forward in U.S. American style, with the banners of shareholder value and free market economic principles being waved at the forefront. However, the abandonment with which the EU has embraced these new principles has gravely endangered socio-economic and political paradigms. One of the main underlying assumptions of this paper is that, as also stated in the Lisbon Strategy, that the social values of European nations is valuable and should be retained and furthermore, that many of these social aspects which are endangered in the EU privatization/globalization/integration processes are in a the U.S. context, in fact, being dealt with via institutions non-existent in the EU context. The shift of economic, social and political power from the nation state to the corporation has not been sufficiently accompanied by formal shifts in responsibility for overall societal well being. In addition, the international and/or global nature of today's marketplace and corporations allows for free and relatively uncontrolled financial transactions for corporations, permitting the seemingly uncontrolled shifting of profits and responsibilities across international borders. Although great strides have been taken in realizing a true stakeholder viewpoint in business operations, it is almost exclusively voluntary. This puts an inordinate amount of pressure on large corporations to act responsibly and yet allows for smaller competitors to operate without respecting social and environmental aspects inherent in the economic evaluations leading to overall success. In its most basic form CSR is merely a form of risk mitigation. However, the long term wealth creation prospects of the more socially oriented companies, is far greater. From higher market valuations accountable to brand value/good will, to a more prosperous society which can afford to support the corporate activity and views a corporation as worthy of receiving its purchasing power. In addition, CG is a critical aspect of success internationally. Without transparent control mechanisms (Reporting), overall goals can not readily be reached and the associated transaction costs of attaining the goals despite good CG, are astronomically higher

Abstract: