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Corporate Social Responsibility in Russia. Its Specific Characteristics

and Future Prospective
Talantova Nadezhda

Talantova Nadezhda
The the!e of !y study is corporate social responsibility. I have chosen this the!e because it is
one of the !ain issues of !odern business "hich is developin# fast and is "idely discussed. $ue
to the historical past of our country CSR is a rather ne" pheno!enon for Russian business% but
!ost co!panies have already started to run social pro#ra!s. Still Russian business has a lon#
"ay to #o to beco!e really socially responsible and the econo!ic situation in the "orld can no"
ruin all previous atte!pts. That&s "hy% in !y opinion% "e should pay #reat attention to CSR% its
proble!s and future prospective. I a! #oin# to divide !y study into several !ain parts' short
history of CSR% ar#u!ents for and a#ainst it and !a(e a research on Russian CSR special traits%
crisis situation% CSR and advertisin# !ar(et. )lso I "ould try to !a(e so!e hypothesis about
future prospective and !easures that can be ta(en to develop CSR. I "ill use !aterial fro!
business ne"s% articles% official docu!ents% statistics and surveys to !a(e a clear picture of the
situation.
To be#in "ith'
Fro! the early days business "as closely related "ith society. It could e*ist only "hen there
"ere people% for "ho! it produced products and services% if there "ere producers of ra"
!aterials and people "ho "or(ed for this business. These basic thin#s haven&t chan#ed
no"adays and business still depends on the society and at the sa!e ti!e influences it #reatly.
The history of CSR co!es bac( to the be#innin# of the ++ century and is connected !ostly "ith
the ,S)% "hen so!e business!en decided that their enterprises should use resources in the "ay
that "ould brin# benefits both to the o"ner and to society. This idea had to be for#otten soon
because of the -reat $epression in the ./0s% "hen all the enterprises had only one #oal 1 to
survive and the )!ericans "anted nothin# but salaries and e!ploy!ent. )c2ordin# to 3ee
Preston it "as a#ain brou#ht up in 4/0s 5so!e scientist are sure that it "as a result of #lobal
cooperation durin# and after the 66II7 and appro*i!ately at the sa!e ti!e 8.R.9oyen
published his boo( 5the first study on CSR7 :Social Responsibility of a 9usiness!an; "here he
sho"ed that social responsibility can add to the profits of the co!pany if it is correctly
introduced. In </0s and =/0s the idea of CSR "as separated fro! econo!ic profit and fro! that
!o!ent business "as e*pected to follo" not only >uridical le#islation but nonofficial rules of
business ethics as "ell.
)fter the collapse of the Soviet ,nion forei#n co!panies started to enter our !ar(et and brou#ht
alon# ideas of CSR. Thus it is really rather ne" for our country% but if "e "ant to develop and to
reach the level of international business "e need to for! socially responsible business.
For and against CSR
There are t"o !ain points of vie"% "hether business should be socially responsible or not.
. 9usiness has an only tas( to !a*i!ize profits? it shouldn&t do anythin# that doesn&t suit
this principle. It shouldn&t interfere in social proble!s as it is a field of #overn!ent
re#ulation. The only "ay for business to help the society is to pay ta*es and to provide
people "ith "or( places.
@. 9usiness is !ore than >ust econo!ic unit% it is a part of co!ple* surroundin# consistin#
of various inter!ediaries li(e consu!ers% suppliers% !ass0!edia% unions% e!ployees and
shareholders and it should definitely help the society% carryin# out various social
pro#ra!s% cooperatin# "ith #overn!ent. Social e*pectations concernin# #ood corporate
activities have already for!ed and there is nothin# left for corporations but to follo"
the! in order to be successful. )s Ait $avice !entioned :in lon# run those "ho don&t
use po"er in the direction% the society consider to be responsible% "ill lose it;
So each co!pany has to decide To be or not to be socially responsible.
)r#u!ents for'
Favorable prospective in lon# run
Chan#in# consu!ers& e*pectances and closer relationship "ith the society
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Follo"in# !oral standards and responsibilities
Creation of e*cellent reputation
)r#u!ents a#ainst'
Biolation of profit !a*i!ization principle
The e*penses on social pro#ra!s !ean costs for the co!pany and these costs "ill be
included into e*tra cost and thus "ill be indirectly paid by the consu!ers.
9usiness e!ployees are not specialized in solvin# social proble!s and "on&t "or(
effective enou#h
Actually nowadays there is no choice. In spite of all disadvantages most companies have started
to develop social responsibility and CSR is necessary to be successful in the market and avoid
contradictions with government, consumers and mass media.

There are two main types of CRS American and European
American way of CSR is characterized as the one with most authorized enterprises. If the
government tries to make some decisions for the enterprises it will be considered illegally
interfered. Corporate aims are profitability and responsibilities in front of shareholders. Charity
is one of the most wide-spread activity, highly appreciated by the society. Great part of all social
programs are financed through corporate funds and all the expenses on solving social problems
reduce the amount of taxes paid by the corporation.
European way is to pay higher taxes and thus give money to the government to carry out various
social programs. From this point of view government is a special institution that follows concrete
norms to solve social problems with the help of business investments. Sponsorship and Charity
is less popular because of tax pressure. Today European corporations are mostly focused on 3
main types of CSR: economy, employment and protection of the environment.
Russian business hasnt decided yet which way to chose. In the beginning of 90-s American type
of CSR was brought, but now our companies start to take interest in the European approach and
consider social matters to be a very important part of their activity. So, Russian CSR is still
forming and later we will talk about its main characteristics, changes during the crisis and ways
of future development. Referring back to the subject of CSR to make things clear we should
understand how different sides understand the meaning CSR.
We should mention that corporations spend more then a half of all their investments on the
inner-development and much less on the development of external environment.
According to the survey among managers and common population held by Association of
Russian Managers we have following results:
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Type of social responsibility mentioned Managers Common
people
Quality of products 47,50% 46%
Law compliance 35% 35,50%
Discharge of taxes 29,50% 30,40%
Environmental protection 31,50% 30%
Improvement of working conditions 33,50% 22,50%
High salaries 11,50% 19,10%
Investments into manufacture 19% 14,80%
Help to poor people 2,50% 10,50%
Help for the regions in solving social problems 10,50% 10,40%
Education support 3% 9,30%
Transperency of accountancy 13,30% 8,70%
To sum up, we have two main directions of realizing CSR: external high quality goods,charity,
sponsorship, environmental protection, education, transparency of accountancy, help for the
regions etc. and internal staff development, high salaries, medical insurance for employees,
help in solving social problems for employee families (for example to find a place to live or a
kindergarten for children)
Situation in the World
In the developed countries CSR is already an essential part of !odern business. Cany co!panies
have ad!itted this "ay not only because of their o"n position in this !atter% but because of
social pressure. I&ll #ive several e*a!ples' food producers "ere bla!ed for obesity and had to
chan#e their production nor!s and !ar(etin# strate#y 5Araft Foods had to cut do"n fat and
su#ar in its food% li!it portion sizes and stop !ar(etin# in schools7. 6orld&s bi##est foot"ear and
clothin# brands includin# 3evi Strauss% Ni(e and Reebo( had faced a lot of proble!s because of
their plants in developin# countries and no" they have special independent audits of their
supplier factories to increase the transparency of their supply chain and "or( hard to i!prove
terrible labour standards. 9ritish oil and !inin# #roups ca!e under stron# pressure fro! a
coalition of investors and #overn!ent to !a(e public their pay!ents for developin# countries to
fi#ht possible corruption. Dven financial sector "as forced to avoid #ivin# loans for socially or
environ!ental Euestioned pro>ects. Practically all this concessions "ere !ade in order to (eep
#ood reputation and not to lose !ar(et share. No"adays consu!ers are !ore concerned not
only "ith the brand % but "ith the social behaviour of the co!pany. So!e of the! are even ready
to chan#e their preferences% if the co!pany&s policy doesn&t suit the!.
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-overn!ent and social associations are also concerned "ith the develop!ent of CSR. No" a
special International Standard on CSR ISG @</// is bein# "or(ed out. F@< e*perts fro! HF
countries ta(e part its preparation. It "on&t be obli#atory for all the co!panies% the principle of
CSR is still voluntary but is stron#ly reco!!ended and hi#hly appreciated. The publication is
e*pected in @//.
CSR. Situation in Russia
)s I&ve already !entioned the !ain the!e of !y study is CSR in Russia. I "ould li(e to na!e
the !ain points "hich I "ill analyze in !y co!plete study.
The contribution to the society depends #reatly on the business size 5lar#e corporations
can contribute !ore% s!all and !ediu!0sized businesses can&t activate. 6hat are the
reasonsI )re they only econo!ic or have so!ethin# to deal "ith >uridical le#islationI
6hat are the !ain directions of CSR in RussiaI 6hich directions have #reater response
fro! the consu!ersI Isn&t it stran#e to help )frican children% "hen you have ho!eless
children runnin# outside your officeI
6hich co!panies are !ore socially responsible in RussiaI 5for e*a!ple% Russian
industrial co!panies pay #reater attention to social responsibility to for! the positive
business i!a#e on the !ar(et% to attract invest!ents% to #ain #overn!ent support and
so on% because they don&t have direct contact "ith consu!ers and they should (eep
close partnership "ith #overn!ent7
6hether no"adays CSR in Russia is a si#n of hi#hly developed business or is a sort of
dutyI
) lot of conferences and !eetin#s on CSR are held% !ass0!edia is representin# CSR as
a si#n of international civilized business% the President has been constantly !entionin#
the i!portance of CSR since @//. 9,T !any people still believe that bein# socially
responsible !eans only !oney launderin# or prayin# for for#iveness of corporate sins.
) creation of Russian CSR charterI 6hat "ill it possibly declareI
Find e*a!ples of SR pro#ra!s and co!panies
Life is changing. We have crisis. What will happen to CSR?
The "orld is facin# one of the #reatest financial crises in history% !any co!panies have already
#one ban(rupt and !any others are on the "ay. Is it a ri#ht ti!e to thin( about social
responsibilities or it is better to concentrate all the recourses to surviveI I "ould li(e to study the
!ain tendencies of CSR develop!ent in Russia% especially such aspects as'
Stoppin# of various social pro#ra!s% the reasons and validity
Raisin# level of e!ployee layoff% the reasons and validity
Strate#ies of CSR that co!panies chose in difficult ti!es and ho" it depends on the type
of the co!pany
$ishonest !ethods of #ainin# profits 5 so!e co!panies !a(e e!ployees "or( overti!e
or pay less under the threat of redundancy7
$irect violation of la"s and CSR principles 5so!e interestin# facts about Russian food
!ar(et% a scandal concernin# )shan7
For so!e co!panies the crisis
CSR in Advertising
I "as very interested in advertisin# !ar(et. Just i!a#ine% if "e "ant to create a nice i!a#e for
our co!pany to #ain co!petitive advanta#es "hat can be easier that to contact directly "ith each
custo!erI Cass0!edia #ives us such opportunity. It for!s our consciousness slo"ly% it&s an ideal
tool for persuasion% so the "ay co!panies behave on the advertisin# !ar(et is also an i!portant
indicator of its CSR0level. That&s "hy I&ve decided that it "ill be interestin# and useful to study
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this !ar(et. So!e ne" tendencies ca!e into bein# "ith the start of the crisis and should be
studied'
The a!ount of advertisin# 5"e have a decrease in advertisin#% especially on radio7
So!e co!panies have stopped their advertisin# ca!pai#n and so!e have increased 5it is
interestin# to find out reasons7
6hat types of advertisin# is opti!al no"I
The #ro"th of Internet advertise!ent 5 increase in spa!!in# fro! s!all co!panies and
fast developin# virus advertisin# usin# blo#s7
Ne" anti0crisis the!atic of slo#ans% lo#os% TB and Internet co!!ercials% discounts etc.
Increasin# nu!ber of advertisin# "ith the ai! to encoura#e people durin# crisis.
5e*a!ples of bi# corporations as Coca0Cola% CTS% 9eeline% ,ralsib etc.7
Cass0!edia. )re there any "hite"ashin# articlesI
Social advertisin#
Future Prospect of CSR
There are no doubts that this crisis "ill have a #reat i!pact on CSR throu#h out the "orld. Dven
Duropean countries and the ,S) "ill feel the difference% but our country "ill be in a difficult
situation. CSR in Russia is still for!in# and the crisis "ill put !any co!panies in front of a
reasonable Euestion $o "e really need to be socially responsibleI% !oreover those "ho "ill
ans"er Kes have a very bi# chance to face co!!ercial proble!s and !ay be "on&t be able to
carry out social supportin# pro#ra!s. )s you (no"% it is very easy to stop% but hard to start a#ain.
So the co!panies "ill have . possible opportunities' to stop all social pro#ra!s% to stop only
several social proble!s and to carry on the !ain ones or to (eep on "ith all the pro#ra!s if they
can afford the!. In !y study I hope to analyze all the infor!ation I "ill #et and to find out
possible opportunities of CSR develop!ent in Russia because I&! sure that it is very i!portant.
The process of for!in# CSR "ill ta(e a lot of ti!e and effort% but the results "orth thisL
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