11.16.2005 ET

(CSRwire) The World Bank surveyed in 2005 business leaders in Hungary, Poland, and Slovakia to identify private sector views of corporate social responsibility (CSR) and the ways in which these views are put into practice.

The survey findings indicate that all three countries have similar attitudes concerning the role of the company in society and the concept of socially responsible behavior.

Respondents generally understand the term "CSR" to mean compliance with existing regulations, behaving ethically, and assuring environmental protection, but do not think that CSR involves correcting social inequalities or engaging in public relations.

The survey indicates that for company executives the most significant barriers to adopting socially responsible practices are "perceived overall cost" and "lack of appropriate regulations". Cultural differences and the resistance of managers and employees to behaving in a more socially responsible manner are not considered significant barriers. Similarly, adopting CSR is not seen as risk to maintaining quality and productivity among workers.

The results of the survey, combined with an understanding of the socio-economic context of the respondents, indicate that while companies see themselves as predisposed to act in a socially responsible manner, they consider the corporate culture to be primarily market-oriented and competitive, and therefore often lacking the economic incentives and regulations to develop socially responsible practices further.

Respondents consider that decisions to engage in CSR activities are voluntary, but feel that a more conducive environment could be created by government and other stakeholders to stimulate further engagement.

The adoption of CSR practices in Hungary, Poland, and Slovakia to date has been mostly spearheaded by private companies, often multinationals that are expanding their operations consistent with their own best strategic interests. Many companies that have been sensitive to their employees', customers' and communities' desires and perceptions have found a compelling business case for accommodating these desires and perceptions, beyond strictly legal and regulatory requirements.

In most cases, governments have generally seen that CSR can serve society's interests, and have been satisfied that lead companies are aligning themselves with business practices under the pressure of the "market". Governments appear to have been satisfied with an implicit policy of remaining aware and sometimes endorsing private-led initiatives while monitoring and enforcing compliance with regulations, without an explicit policy to broaden or promote CSR. This has been a relatively passive or disengaged policy stance, and has served countries with vibrant formal business sectors relatively well to date.

However, it is clear from the survey results that firms in Hungary, Poland and Slovakia would welcome clarity of government policy regarding the promotion of CSR. The survey found a widely held belief that there is a lack of sufficiently clear policies covering CSR, however firms from Hungary, Poland, and Slovakia do not agree on the most important actions required for broader adoption of CSR activities. Hungarian companies prefer incentives and relations with local jurisdictions to influence their behavior, and pressure from consumers rather that regulation, central government participation and/or management, and believes that under these circumstances it would embrace new business models and modes of behavior. Slovak companies share these views to some extent, strongly believing in dialogue with the government. In contrast, Polish firms stress macro and national-level factor (regulatory reform, national dialogue with government, banking measures). However, there is agreement that governments should not become heavily or directly involved in micro-managing business issues.

The challenge facing governments in the Hungary, Poland and Slovakia is to acknowledge, to the maximum degree possible, the perceptions and values of the business sector and voluntary nature of CSR and build on these, while recognizing that the countries' obligations to meet European environmental and social standards, and often dependency on exports as the "economic driver" requires actions that may be contrary to these perceptions. To encourage such actions may involve educating and negotiating for a stronger role for the governmental initiatives, enforcing national policies to conform to EU standards, and assisting firms in meeting them.

Affecting change in attitudes and perceptions, as well as following through to define and agree on actual measures to promote acceptance of CSR would require a new consultative process between businesses, other stakeholders who they have identified as consumers/communities, and the national governments--although business representatives in Hungary were not in favor of such a dialogue.

Various modalities can be envisaged to organize and conduct such tripartite consultations, but all would require common features including: a neutral forum and sponsorship, a commitment to follow- through to actions, and agreement on institutional arrangements that sustain monitoring and verification that agreed measures are being followed.

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