Corporate social responsibility in Poland – theory and practice

In the last decade Corporate Social Responsibility (CSR) has become an idea playing an increasingly important role in the activity of various enterprises. To an extent the concept is a response to new requirements faced by the enterprises. < ey consist mostly of a close cooperation between the enterprise and its environment as well as complying with commonly accepted norms and rules. < e aim of the article is to establish a multidirectional evaluation of various CSR solutions in Poland. < e intention of the author is to point out the importance of complying with the CSR premises as well as many benefi ts coming from non-paricularist and non-individualist approach to the issues of social responsibility. Along with necessary theoretical introduction indispensable in case of a research paper the text also presents these issues basing on economic practice.


INTRODUCTION
e purpose of this article is to propose an omnidirectional rating solution in the area of corporate social responsibility (CSR) in Poland and to investigate the role of the state in that fi eld.e intention of the author is also to indicate the importance of a company's compliance with the principles contained in the CSR and the benefi ts which can be achieved when actions related to corporate social responsibility transcend individual goals and short-time gains.Along the theoretical divagations -an inherent part of any scientifi c study -the article presents solutions related to business practice.
Corporate social responsibility focuses on building relationships in support of all stakeholders involved in business projects.It is a concept that in addition to creating positive relationships between stakeholders, includes human resources, formal and legal conditions and environmental protection on a voluntary basis.Specifying corporate social responsibility can be defi ned as companies focus on seven important CSR areas: corporate governance, employee behavior, human rights, integrity in customer relations, the environment, business integrity and social commitment.
Historically speaking, we can distinguish fi ve stages of the evolution of corporate social responsibility.e fi rst stage was initiated in the United States in the nineteenth century.e main reason why discussions related to corporate social responsibility have begun was a growing greed of American entrepreneurs who were building their industrial powers often using blackmail, discriminatory pricing or evasion of taxes. is lack of moral and ethical values in business has led to social unrest and consequently to a transformation of socio-economic policy.e eff ect of these changes was, among others, conversion of the laws that henceforth precisely regulate the relationship between the economy, the state and the society.e main advantage of these changes was to build up an awareness and persuade businesses to introduce corporate social responsibility, and therefore accountability to employees, communities, stakeholders and the environment.e second stage took place in the mid-twentieth century, after the great crisis, which erupted in the late twenties and thirties in the United States.e crisis has caused a further turn towards the corporate social responsibility initiative, especially by redefi ning the CSR principles in order to increase the scope of the obligations of a company towards the environment.e third stage took place in the sixties of the twentieth century.In that period a social unrest was the cause of dissatisfaction with the ever-growing polarization of the income within the working population.A positive impact of the implementation of the principles of corporate social responsibility at operational and strategic level as well as on both the company as a whole and the general economy has sealed the deal.
Fourth and fi fth stage took place at the end of the twentieth and in the beginnings of the twentyfi rst century.At the beginning of the nineties of the twentieth century a discussion on the legitimacy of the axioms of business ethics based on corporate practice has begun.Since then proposals to apply a criterion of utilitarian ethics in the business strategy of a company ceased to be perceived as unusual and detrimental to the interests of shareholders.Many researchers directed their attention to the observable inclination towards institutionalization and processual conception of the relations between business and society.In eff ect attempts to include these issues in a theoretical framework have been made.And fi nally the past decade witnessed many studies referring to the issues of corporate social responsibility.Since then the benefi ts of combining an enterprise's social commitment and its fi nancial performance, its market value, satisfaction and effi ciency of employees, their professional development, effi ciency of the recruitment process, innovation, customer loyalty, relationships with fi nancial institutions and investors have been noted ever more clearly.
ese considerations allow to conclude that the fundamental reason for the increased interest in corporate social responsibility is a crisis of confi dence in business.Business, or to put it diff erently: economic activity, facing numerous irregularities such as fraud and corruption, has never had a strong moral position.In recent years, lack of belief in ethical business grew even stronger as a result of the emergence of a number of pathological phenomena, especially in the fi nancial markets caused by the crisis, which had started in 2007 in the United States.A relatively signifi cant weakening of the nation-state and the growth of infl uence of corporations has pushed that process even further.ese reasons have caused more and more various environments of both practitioners and theorists to emphasize the need to include the ideas of corporate social responsibility in corporate practice.ese processes are reinforced by the growing awareness of employees, customers, environmentalists and the communities aware of the intolerance and segregation.

BASIC PRINCIPLES OF CORPORATE SOCIAL RESPONSIBILITY
e concept of corporate social responsibility has become an absorbing trend not only within the discipline of ethics but also in the business management theory.T. Dołęgowski (Dołęgowski,p. 125) contends " e concept of corporate social responsibility gradually emancipates itself from the traditionally under-stood business ethics and starts a sort of life of its own -as a part of modern management theory.For some CSR has even become the next modern paradigm and a school of thought within the strategic management and the search for sources of competitive advantage.CSR is sometimes regarded as an extension of the doctrine of comprehensive quality management.As such the CSR criteria become a vital point of reference for those who have the decisive impact on national and international ranking lists and performance awards in the fi eld of quality management and competitiveness." It is assumed that in order to defi ne a company as involved in the idea of corporate social responsibility, it must comply with such requirements as: investment in human resources and environment protection, maintenance of a legal and ethical relationship with the corporate environment and thorough information of the company's activities.In other words: a responsible business activity is the one which eff ects in a positive impact on society, manifesting itself in lawful behavior and mutual agreement with the social partners.In order to implement this concept a company should adapt its activity and its strategy to the rules of the social, environmental as well as ethical -related to human rights and the rights of consumers -structures.Close cooperation with the environment and compliance with accepted canons all the parts involved not only to maximize income but also to predict, prevent and minimize dangers.
Human rights and labor rights are an important foundation for responsible business.erefore, one of the most important principles of corporate social responsibility is an investment in human resources in order to guarantee basic human rights such as: the right to free speech, freedom of assembly, the right to education, regardless of race, gender, sexual orientation, religion, ethnicity, social, national or political convictions.e lesson here is that the business of an enterprise should be in accordance with the principles of respect for the rights of employees, through the development of models and methods of implementation of personnel policies and by developing proethical management strategy, which should include: promotion of higher education among the future managers, ethics-based management education of the management staff members, organizing the standards forming ethical principles in the form of codes of ethics, introducing the employees to clear ethical system promoting an ethical conduct.
It is also important for companies to create programs for the employees, referred to as an investment in employee development.ese programs are aimed at increasing the professionalism and expertise of the staff through courses and training, integration programs, programs for equal opportunities (fl exible forms of employment, equal opportunities for people over 45 years of age, people with disabilities).Management systems focused on introducing transparent and effi cient systems such as Quality Management System ISO 9000 (quality management system), Environmental Management System ISO 14000 (environmental management system), Social Accountability SA 8000 (social responsibility management) may prove very effi cient in that fi eld.
e next objective of CSR is the improvement of management systems aimed at the development of mutually benefi cial relationships with all stakeholders.Not so long ago Milton Friedman was trying to prove that the social duty of business is to maximize profi t at all cost -of course within the limits of the law and basic moral principles.Currently however most theorists and practitioners involved in ethical refl ection on the economy strongly emphasizes the need to develop positive relationships in business and its environment and the correct relationship between the stakeholders as a factor equally valid as the strive to maximize income.e stakeholders are a group composed not only of management staff and employees but primarily of customers, suppliers, shareholders, government, local community, the environment and mass media.Stakeholder-oriented approach implies that although for most obvious reasons a company has to be focused on maximizing profi ts, this objective cannot be taken out of context and considered the only criterion for evaluation.According to those who opt for that standpoint, an important criterion for corporate evalua-----tion is the degree to which it seeks to take into account and possibly satisfy interests represented by various groups of stakeholders, which however may appear confl icting, but become vital from a long-term, overall perspective (Frieman,. Environment protection is also one of the pillars of CSR. is is due to the fact that the maintenance of environmental sustainability in production processes constitutes a remarkable economic and social value.Environmental management includes responsibility for the environment in which it operates.Business decisions consistent with this assumption should be designed to diminish the negative impact of production processes on the environment and, at the same time, introduce environmental protection programs.e issue of the relationship between the socio-economic and environmental aspects of business activities can be broadly divided into two approaches.e fi rst one is a classic approach setting the goal of environmental regulations to increase social welfare by reducing external costs, the underline assumption being that regulations are designed, through internationalization of external costs, to alleviate market failure, which entails additional costs (Schaltegger, Wagner, 2006, p.9). at link seems to be particularly important for those industries where the impact on the environment during the production process entails more costs than the added value.
On the other hand, supporters of alternative approaches to the relationship between socio-environmental and economic aspects of business activities emphasize that being prepared to face the challenges of protecting the environment can be presumed source of competitive advantage by among others increase effi ciency, reduce compliance costs, or the opening of new areas of market expansion (Porter, Lindevan der, 1995, p. 120-134).Projects focusing on local communities are another vital area in building corporate social responsibility.In this fi eld a cooperation with social institutions and non-governmental organizations, fostering educational and cultural activities, activities for the development of projects and internships as well as apprenticeships and initiatives aiming cooperation with educational institutions and research centers are of an immense importance.
According to some authors the problem of norms and the rules of human behavior in economy framed by ethical codes has become another specifi c and expanding study area -situated in a kind of frontierland between CSR and business ethics.In this regard a symptomatic quarrel on the ground of ethics understood as moral philosophy is a confl ict between the so-called codex and the non-codex option, the latter being additionally divided into moderates and radicals.e moderates stress the importance of constructing a set of norms and rules for certain professions in a balanced, generally based on general ethics, such as Decalogue or the Human Rights.e radicals opt for constructing analytical directories of moral norms, highly detailed and targeting specifi c groups.Supporters of ethics without a code emphasize the complexity and the unique circumstances of a human evolution towards becoming a moral subject.at complexity causes the human conscience to be the necessary, the sole and the ultimate touchstone of ethical behavior.A human being is not restrained by any external standards rooted in the will of a norm-maker. is excludes the concept of ethical norms designed for specifi c professions.According to L. Fuller (1978, pp. 35-41) at the root of this belief lays the assumption that moral decisions cannot have a heteronomous nature, external to the subject in the process of decision making.Moral decisions are not conditioned by his own self, because the self is either a fi ction or it is constituted in the process of the very same decisions (Fuller, 1978, p. 35-41).Incidentally ethics without ethical code is specifi c to existential philosophy.It exerted a great infl uence on Western ethical thought especially since the fi fties of the twentieth century.
In the CSR-debates a great importance is attributed to the studies showing the modes of combining corporate business activity with social responsibility: a business report should present a full transparency of the business activity, indicate the statement period, include policies, aims and strategies, as well as a list of results allowing for a comparative analysis in the following years.e reports should also take into account the interests and needs of a broad group of stakeholders.
e above presented fundamental features of CSR are the backbone of this concept.It should be noted that corporate social responsibility is a new tool in the theory of management and the theory of sustainable development perceived as a progressive fi eld in economic policy.

CSR IN THE POLISH BUSINESS  PRACTICAL ASPECTS
Polish enterprises and in particular micro, small and medium enterprises still do not fully appreciate the importance of corporate social responsibility.ey focus mainly on achieving short-term market goals without a long-term strategic vision.To a lesser extent this also applies to large enterprises.e situation is evident in a research conducted by PwC consulting fi rm on 287 Polish companies.e research shows that 229 large and medium companies (80 percent) have optimized their fi nancial performance and in eff ect they were ranked among top 500 list of "Polityka" and "Rzeczpospolita" journals (Polityka, 2012, p.97). e most active in the research were the companies active in the fi elds listed in Table 1.As already mentioned the discussion on CSR is not entirely theoretical.e research concerning the main areas of corporate social responsibility implies practical consequences.It appears that the most important points in terms of consumers and the market proved to be: actions in favor of consumers and the market which was declared by 88 percent companies surveyed, with the vast majority of companies -93 percent -focused on the implementation of safety standards and the quality of the goods and services, compared to 92 percent focusing on standards of customer service.promoting sustainable consumption, consisting of informed purchasing decisions declared by 24 percent companies, attention paid to equal customers access to goods and services declared by 42 percent of the surveyed companies.
Another important area in the process of CSR-building is the work for local communities, done by 85 percent of the surveyed companies.ese activities were in particular: cooperation with educational, scientifi c and cultural institutions and organization of internships and apprenticeships.Having a codifi ed set of ethical rules was however declared by 70 percent of the companies (Polityka, 2012, p.97).
---Despite the strong concern for the stakeholders the enterprises attribute a crucial importance to the development of the members of the staff , which is proven by the fact that: -a formalized system of employee evaluation and remuneration on the basis of the results was created by 80 percent of the surveyed companies, -evaluation system for all employees, not just special groups, such as managers is implemented by 84 percent of the surveyed companies.e qualitative changes taking place in the Polish business are a specifi cally optimistic area.ese changes are to be observed in the fi eld of strategic CSR management.It turns out that among the 230 economic operators who fi lled out the survey (it is signifi cant that most of these companies were also in the top 500 of "Polityka" and top 500 of "Rzeczpospolita"), 67 percent of them systematically identifi es priorities related to conducting business in accordance with the principles of corporate social responsibility, while: -88 percent of the cases is a part of another type of strategic documents such as HR (HR policy -personnel policy, human resources policy), -46 percent is a part of the business strategy, -39 percent prepares an independent CSR strategy.
Moreover, about 50 percent of surveyed companies employ people who coordinate the tasks of CSR.More often than not they are employed in communication and PR departments -about 50 percent -and administrative offi ces -16 percent, but rarely in the structure of strategic groups -3 percent (Polityka, 2012, p.97).Table 2 presents solutions most frequently used by the Polish company within the guidelines of CSR.
In eff ect of an analysis of the results obtained by the consulting fi rm PwC it seems that it would be too optimistic and too rash to believe that corporate social responsibility is already a standard in Polish enterprises.It is proven by the fact that less than 40 percent respondents replied to the questionnaire on CSR, and only the 100 biggest companies created a management structure, implemented ethical codes and informed the environment of their activities in the fi eld of CSR in a conscious and strategic manner.
ese enterprises may therefore be described as guides defi ning the future directions of CSR (Polityka, 2012, p.97).Naturally, the presented results of the study conducted by PwC are characterized by a high degree of generalization and therefore are primarily a basis for further discussion and inquiry.It is worth considering why despite a lively debate on CSR in Poland as well as on the European, international and global level, in Poland the concept is underestimated or even ignored.It is worth mentioning that what is at stake is not a theoretical fi nesse, but a fundamental question about the reasons for such a matter of facts.e reasons are many, the crucial ones being the assumption that: enterprises should focus solely on creating profi ts; every company should focus solely on creating profi ts; social involvement of business is not able to really change the world for the better, companies do not have experience in managing social programs; business should not be concerned with the public institutions responsible for motivating, implementation, observation and monitoring of social and environmental standards.
It also appears that an important cause of a poor interest in this concept, in addition to the reasons mentioned above, it lack of understanding of its principles among the majority of Polish entrepreneurs and, above all, the belief that compliance with CSR does not pay off .As a result, despite the fact that CSR in Poland is ever more broadly discussed, in the economic reality only a few companies decide to implement complex CSR strategies.A vast majority of them perceives CSR as a part of social engagement, all too often narrowed down to one-time social or philanthropy acts or employee voluntary work. is approach of Polish companies to corporate social responsibility is far from the modern understanding of CSR promoted by the EU, which expects corporations to conscious and continuous comply with human rights and to prevent their violation, as well as to maintain the standards of fair trade, environmental protection, business reliability and social care.EU stresses the fact that the CSR ideas, according not only to various studies, but also to everyday practice, has a real impact on the economic effi ciency and the innovativeness of enterprises.
erefore implementing CSR ought to be an investment and a source of innovative ideas and not only as yet another cost attributed to a company's business plan.
At the end of this section is also worth adding that in Poland many institutions and organizations involved in promoting corporate social responsibility and providing consultation in this area have been created.ese include, amongst others, Institute for Responsible Business, Business Ethics Centre -CEBI, Centre CSR.pl, UNDP -Global Compact Responsible Business Forum, the Academy for Development of Philanthropy in Poland.ere is however no subject able to coordinate, issue certifi cates and prepare expertise on the relations between the international CSR standards and CSR in Polish business.

DYSFUNCTION AND TRENDS RELATED TO THE IMPLEMENTATION OF CRS
Practical use of the idea of a social market economy in Poland will show in the future.As often mentioned before in this article, in Poland the implementation of the idea is still in progress.However Nordic countries can serve as a positive example.It is a region where CSR is advanced and based mostly on the idea of sustainable development as well as the following points: the concept of the economy serving the society, inculcating environmental awareness at the individual and enterprise level, state policy supporting the idea of CSR, construction of infrastructure serving to create awareness promotion of CSR, honesty and competence of the government offi cials, effi ciently functioning non-governmental organizations, ----------responsible and reliable media promoting and supporting ethically acting companies.Practice shows that the Nordic countries which have long been acting based on the social model of the economy did not suff er as much as those of the neo-liberal stance.But according to E. Mączyńska today this model requires adapting to modern global economy.Ordoliberalism has been established before World War II, and at thet time the globalization has not yet achieved the level known today; additionally the model of national economies was dominant and unburdened by the hypertrophy of the fi nancial sector (Mączyńska, 2011, p.62).
erefore the main issue now is to consider the determinant of an optimized engagement of the Polish state in the concept of CSR.Even more so since the requirement for a critical refl ection of the politicians concerning the economy nowadays is necessary and obvious. is requirement derives not only from the need to create the conditions for developing the concept of corporate social responsibility and the applicable standards and regulations in this area, but from something much more substantial, namely the need to refl ect upon the meaning of the axiological domain in the course of building awareness, market order, and fi nally a competitive advantage of the state.Besides, it is also about monitoring and presentation of the relationship between an economic and legal system, the culture and ethics and economic policy in the sphere of economic and management at the level of the enterprise.
In addition to the issues mentioned above, there is also a very important problem which can be described as central, namely the social costs associated with the equitable allocation of factors of production.
is problem also applies to the justifi cation of these costs.Introducing analysis involving institutional sphere along the narrowly conceived professional one seems to be another necessary measure aiming to present costs and benefi ts resulting from compliance with CSR in Poland.Overall the general costs of a specifi c operation should be compared to its cumulated benefi ts in order to asses CSR as eff ective and whether the cumulated benefi ts are greater than the costs.e main problem is the estimation of the benefi ts in monetary terms.Calculation of benefi ts and costs associated with ethical or unethical behavior of individual companies, although diffi cult, is however possible in the form of assessment of losses related to insurance frauds, tax evasion or frauds, malversations, improperly conducted tenders or extortions.In the case of nonfi nancial costs which could not be quantifi ed the situation looks diff erent.Costs such as consequences of the lack of responsibility, moral damages of employees, omissions done by representatives of state institutions, growing polarization of income, consequences of the lack of control and ecological degradation.Fixing these costs is not at all easy and one is usually forced to settle for very imperfect estimates.e considerations presented above clearly indicate the need for a paradigm shift in the economy towards the social economy and changes in the state institutions' approach to these issues.e need for this has been forced most of all by the global crisis, which resulted in the fact that the reputation of transnational corporations, and especially the fi nancial sector as well as of the public institutions has suff ered.As a result, both companies as well as state institutions are quite commonly seen as thriving at the expense of the wider community.

Table 1
Percentage indicator of businesses participating in the survey concerning CSR engagement in 2011

Table 2
Solutions used by companies as part of CSR principles Source: author's analysis based on a questionnaire conducted by PwC consulting fi rm in 2012.