Chapter

CSR (CORPORATE SOCIAL RESPONSIBILITY) DEVELOPMENT AND CRISIS ON EUROPEAN AND

POLISH MARKET

Joanna Oleśków-Szłapka, Anna Sobiś

1. INTRODUCTION

The global economic crisis, that consequences are still visible in polish and european economies, has influenced on strategy of companies from various industrial branches. The main emphasis was placed on increasing of action’s flexibility in order to adopt to new, more severe economic conditions. The question that arise how development of CSR is related to crisis in Poland and Europe? This paper tries to answer how economic situation affects on companies’ corporate social responsibilities.

Corporate social responsibility (CSR) is important and also helps companies to build their brands. It is of even greater importance during an economic downturn since consumers care about not only product quality but also the CSR performance of the product manufacturers during such a period. The current economic crisis brings huge challenges for companies.

In addition to huge challenges, the current financial crisis also provides great opportunities for companies. CSR is an important means to help them build their brands. A recent report from the Edelman agency shows that as many as 90% of the consumers interviewed thought that choosing products or brands with a high CSR score is quite important even during an economic recession. This proves the importance of CSR during an economic downturn.(Edelman, 2008)

Poznan University of Technology, The faculty of Management Engineering, the Department of Production Management and Logistics

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The economic crisis can be an indicator of responsible business activity. It highlights cases in which companies benefit from socially and ecologically responsible management, and others in which social engagement that has no connection to a company’s core business tends to fall victim to cost-cutting measures. Two things are very clear: CSR, as a strategic management tool, helps companies prepare for the future and equips them to deal with crisis situations. As a new mechanism for integrating companies more fully into society, CSR provides a way for private industry to join together with policymakers and civil society to work for the common good all over the world.

Often attention to CSR precipitates after a crisis. One of the most active stands against environmental mismanagement is the Coalition for Environmentally Responsible Economies (CERES) Principles13, a ten-point code of corporate environmental conduct which was publicly endorsed by CERES member companies, and resulted from the Exxon Valdez oil spill in Alaska in 1989. CSR has become a means of matching corporate operations with stakeholder values and demands. An effective CSR policy will bring together all aspects of operations within a corporation as a way of adequately considering the needs of all constituent groups. The actions corporations take today to incorporate CSR throughout their organizations represent a real point of differentiation and competitive market advantage on which future success can hinge. (Trade and investment division,2010, pp.13)

Corporate social responsibility has become an increasingly important research topic since the 1980s. Because, organizations are a set of contracts with all stakeholders or agent that they interact with, they play an essential role in society.

The global importance in CSR is on the rise. Beyond gaining economic profit, more and more organizations respect social issues related to the surroundings where they operate.

2. CSR - BACKGROUNDS

2.1. How we can define CSR

As a concept or process, CSR has different definitions. It may lead to use of corporate power and social involvement in socially responsible activities (Turker, 2008) and (Carroll, 1999) indicate that the economic component of CSR is what the business does for itself, while, the non- economic components of CSR are what

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the business does for others. Branco and Rodrigues (2008) definition includes two main factors that motivate companies to engage in CSR projects and disclosure; conducting good relations with stakeholders to gain financial returns through resources and capabilities, and conforming to stakeholder norms on operations. Wanderley et al. (2008) believes that the requirement for social projects is part of the definition of capitalism in today’s global business environment. Based on definitions in literature, based on Sunder’s (1997)

However, the definition of CSR might be different for each party, as a result of different expectations. suggests that it is a mistake for organizations to reduce their CSR projects. In order to cope with the financial and economic downturn, organizations need to focus on providing society’s needs; therefore, transparent CSR projects could provide the social support needed by organizations and society to overcome the down turn. The financial crisis has raised the question of whether supporting CSR initiatives is a good issue in financially troubled times. If organizations are purely profit maximizing units, it would be expected that they would not engage in CSR projects in times of financial crisis, however, CSR is more demanded in times of financial crisis (Air Human Right, 2008).

Sometimes organizations perceive CSR magnifycent in times of financial crisis. However, for long term sustainability and stability, CSR is required for all companies

The social responsibility of business encompasses the economic, legal, ethical, and discretionary expectations that society has of organizations at a given point in time. (Carroll, 1979, pp. 500)

CSR is about businesses and other organizations going beyond the legal obligations to manage the impact they have on the environment and society. In particular, this could include how organizations interact with their employees, suppliers, customers and the communities in which they operate, as well as the extent they attempt to protect the environment.(Lea, 2002, pp.10)

The research program proposed by the RESPONSE consortium aims to study the nature of societal demands on business organizations' decisions and actions from a business strategy perspective. Managers and stakeholders may use the same terminology – such as ‘social responsibility’ and ‘sustainable development’ – they may attribute different meanings to these terms. This gap between how companies and stakeholders view the social responsibilities of firms in turn has an impact on how a firm’s actual social performance is perceived; in cases where the gap is narrower, stakeholders are more likely to perceive the firm as doing greater social good. (Freeman, Velamuri, 2008)

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All the definitions share a common view that business should exceed certain minimum obligations required by law – an organization which abides by the law is not necessarily socially responsible – it is crucial that it does meet social expectations that are not codified by the law. Also, the definitions state that CSR is discretionary and is not forced upon business by legal sanctions.

2.2. CSR in Poland

Corporate Social Responsibility (CSR) is a relatively new concept in Poland – some organizations to support CSR was set up in 1993 but CSR as a concept/strategy arose officially around 2004. According to UNDP report CSR development can be split into five stages and describe (UNDP report, 2007, pp.22):

1997-2000: lack of interest and knowledge about CSR and benefits follow from it;

2000-2002: aversion to develop new concept; common belief about “invisible hand of the market” as a cure-all therapy;

2002-2004: increase of CSR interest; emphasizing that ethics business behavior is a firm foundation;

2004-2005: development of specific but partial projects that are involved in selected company’s area;

2006-2007: attempt to combine CSR with other strategies that are implemented in company.

Starting from 2007 CSR concept becomes the subject of discussions in academies’ and government’s community. Thanks to this managers’ minds are broaden and some efforts are made to develop new strategy:

investing in society education to increase knowledge about CSR, promoting new enterprises’ culture, offering high quality workplace.

Polish companies had only several years to get to this position while developed markets took decades to create new attitude to employee, environment and ethics.Since last years now, many polish organizations like: employers’ organizations, nongovernmental organizations, academic and governmental institutions have been joining to the process of CSR development in Poland in a variety of ways (UNDP report, 2007, pp.9-10)

CSR becomes an important part of political world in Poland. The fact that there is a lot of institutions and organizations that support CSR and help to arise it in

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business world is really motivating. However, CSR implementation is not only about getting knowledge and awareness – it requires self-discipline and creativity from managers and companies owners. There is no doubts that CSR concept helps to maintain competitiveness, nevertheless companies have to engage some resources to develop CSR as a long-term strategy. More information about CSR concept and strategy in Poland reader can find among others in the paper (Oleśków-Szłapka, 2010,pp.173-186).

2.3. CSR – initiatives, frameworks and standards

The model of social responsibility is not only the general idea in the theory of management or social sciences – it is nowadays often used by people in every-day living. With time the concept evolved and resulted in the building of concrete rules and norms. There are several standards (GRI, OECD Guidelines for MNE’s, SA 8000, AA1000, Global Compact, ISO 26000), multiple internal codes of conduct of many companies that implement CSR, national legislation on the issue (i.e. Denmark, where reporting on issues related to CSR is obligatory for the largest firms), socially responsible stock market indexes (FTSE4Good, FTSE KLD400 Social Index, Nasdaq OMX CRD Global Sustainability 50, Dow Jones SI, and even the newly-developed RESPECT Index at the Warsaw Stock Exchange). (Mielechow, Piskalski, 2009, s.18).

Initially, all major global CSR initiatives and ratings were considered a basis for establishing indicators for the index. The final selection was based on four main criteria. First, the indicator must relate to some aspect of CSR – preferably a triple bottom line approach. Second the indicator must have a global and general application. Consequently, regional and national initiatives and ratings were excluded, as well as sector and industry specific initiatives and ratings. Third the indicator must involve a minimum 100 companies. Finally reliable and comparable data must be available at country level. Nine CSR initiatives and ratings met these criteria Individual indicators are described in table 1.

Table 1. Variables in the CSR index (Gjølberg, 2009, pp.14)

Variables Description

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Dow Jones Sustainability Index The Dow Jones Sustainability Index comprises the companies with the best CSR practices in their respective industries. The evaluation is based on the cooperation of Dow Jones Indexes, STOXX Limited and SAM

FTSE4Good The FTSE4Good Index Series measures the performance of companies that meet globally recognised CSR standards; it is managed by the FTSE4Good Policy Committee, an independent body of CSR experts from academia, fund management and business.

Global 100 The Global 100 is a list of “The Global 100 Most Sustainable Corporations in the World” which announced annually at the World Economic Forum in Davos. The list is developed by the Canadian magazine “Corporate Knights” in cooperation with Innovest Strategic Value Advisors, a leading research firm specialising in triple bottom-line analysis and socially responsible investments.

UN Global Compact The UN Global Compact is a multi-stakeholder initiative seeking to advance 10 fundamental principles in the areas of human rights, labour, the environment and anti-corruption. It is direct initiative of the UN Secretary-General; the network consists of a large number of companies, as well as NGOs, academia, UN bodies and labour unions. The initiative is voluntary.

World Business Council for Sustainable Development

(WBCSD)

The WBCSD is a CEO-led coalition of 180 companies working towards sustainable development. The WBCSD is active in policy development, advocacy work and in developing best practice business leadership in CSR. Membership is by invitation only and requires extensive investments in terms of time and resources.

The Global Reporting Initiative (GRI)

GRI is a reporting standard for triple bottom line reporting. It is developed through a multi-stakeholder process, led by the GRI secretariat. It is important to note that their database is based on self-reporting; therefore the companies listed do not necessarily report in compliance with the GRI reporting standard.

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KPMG International Survey of CSR Reporting

The KPMG Survey is the most comprehensive of its kind, based on a survey of CSR reporting practices. The methodology covers triple bottom line issues, and is carried out by KPMG in each country

SustainAbility’s list of the 100 sustainability reports

SustainAbility is leading think tank which provides a biannual evaluation of best practices sustainability reports. The reports are ranked on a number of indicators, culminating in a list of the 100 best reports worldwide. The reports are submitted by the companies themselves for evaluation by SustainAbility.

ISO 14001 ISO 14001 is an environmental management certification standard created by the International Standarisation Origanization ISO. It is generic management tool, applicable to all companies.

The efforts to measure and evaluate CSR have erupted in recent scientific literature, but the discussion is just beginning. A study done by PriceWaterhouseCoopers in 2003 indicated that social responsibility is still in a state of clarification and consolidation in companies and that the incorporation of relevant indicators is still incipient. The study presented several organizations that offer guidelines for evaluating and measuring some aspects of CSR. These include EFQM Business Excellence Model (European Foundation Quality Management), Dispositions of the United Nations and the ILO, the European Community Green Book, the SAI 8000 Index, the Global Reporting Initiative Guide and the Ethos CSR Indicators in Brazil (Bestratén and Pujol, 2005).

The largest companies usually do have a special CSR section of their websites, which mostly present sponsorship and philanthropy performance. Companies almost never give a direct contact to the person in charge of CSR or ethics - if at all, it is usually a contact to the PR department, if not an outside PR agency. It limits the accessibility for the outside stakeholders. Very few Polish companies have CSR policies or strategies (though several among the largest claim they work on it), and almost never announce its principles. Interestingly, many companies announce having codes of conduct, but they almost never publish it. CSR standards are not in use in Poland – as for 2008 there were 6 SA 8000 certified facilities, 1 GRI report, 1 AA 1000 certified stakeholder dialogue process, recognition of ILO standards or OECD Guidelines among business is none. Professionalization of CSR is at very early stage of development, it should be seen rather as a tool with

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some growth potential for the future. Companies have very diversified understanding of what the CSR is, and what are their obligations under it. Sustainable development isn’t an important subject for the Polish business, though the consolidation of performance of some companies in separated domains could be possibly brought under the umbrella of SD, and then communicated as such, which is a wasted opportunity for some (Piskalski, 2009, pp.1-2).

According to UNDP report 37,5 percent of the companies have implemented ISO 14001. EMAS is definitely less popular, as only 5 companies in the group introduced it into their operations. One company adopted the SA8000 standard and only three of them have the EFQM certificate. 50% of the enterprises neither monitor the performance or the goals of CSR improvement, nor have they defined any related procedures. These companies do not find it necessary to evaluate which CSR activities bring most benefits to the company and its stakeholders. (UNDP report, 2007, pp.54)

The problem isn’t simply that companies aren’t practising CSR very well, it’s that the corporate structure is not capable of social responsibility. Responsibility suggests responsiveness, obligation, control, authority and a duty of care. Emphasizing the company’s good characteristics, such as CSR, can minimize the damage to its reputation (Benoit, 1997; Bhattacharya and Sen, 2004; Coombs, 1995). CSR communication can protect the company from the negative impact of a company-specific crisis unrelated to CSR (Klein and Dawar, 2004) CSR communication can protect the company from the negative impact of a non company-specific crisis related to CSR (Schnietz and Epstein, 2005).

The recent financial scandals and industrial bankruptcies have had consequences on the business perspective of managers and stockholders. This situation has strengthened the tendency to believe in a necessary change of business, which entails focusing on a wider concept of entrepreneurial profit with a long-term view and giving the proper importance to stakeholders, people or groups of people that affect or are affected by a firm’s activity. (Becchetti et al. (2007, 3).

The new perspective, necessary for the aforementioned turnaround, is based on the hypothesis that establishes that CSR is more than a temporary fashion(Fernández-Feijóo, 2008, 209.). It is a management tool under constant renovation which will last throughout time(Gil et al., 2007, 384). The world is still far away from the ideal situation of a global and unique framework for CSR.

3. CSR AND CRISIS ON THE MARKET - RELATIONS

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3.1. The genesis of crisis on the polish market

In order to better understand the crisis genesis in Poland one should familiarize with a few facts connected with financial crisis in United States.

Financial crisis has been triggered by a liquidity shortfall in the United States banking system. It has resulted in the collapse of large financial institutions, the bailout of banks by national governments and downturns in stock markets around the world. In many areas, the housing market has also suffered, resulting in numerous evictions, foreclosures and prolonged vacancies. The crisis rapidly developed and spread into a global economic shock, resulting in a number of European bank failures, declines in various stock indexes, and large reductions in the market value of equities and commodities (Norris, Floyd, 2008).

At the end of October 2008 a currency crisis developed, with investors transferring vast capital resources into stronger currencies such as the yen, the dollar and the Swiss franc, leading many emergent economies to seek aid from the International Monetary Fund.(Evans-Pritchard, 2007).

World political leaders, national ministers of finance and central bank directors coordinated their efforts to reduce fears, but the crisis continued. At the end of October 2008 a currency crisis developed, with investors transferring vast capital resources into stronger currencies such as the yen, the dollar and the Swiss franc, leading many emergent economies to seek aid from the International Monetary Fund (Landler, 2008).

The financial crisis, that has spread across all global markets, does not remain without an impact on Europe and also Poland.

Citing professor J. Hausner (Hausner,2007)”Individually lended credits were in the form of package and they were as object for fabricating next financial product numerous becoming very, global, big financial operations. Majority of this operation was led non-balance […]They have not been made public[..] and because there have not been created reserves […] it grew pool of toxic papers, much less valuable, which infected next elements of structures of global financial markets. Financial operations in certain moment become main mechanism of economic activity. They begin functioning for themselves.

The Crisis has been revealed in Poland later than in United States. In 2008 it has already been the theme brought up either by politicians or by polish citizens.

The situation in Poland is a function of the situation globally, particularly in Europe. This crisis did not originate in Poland; our country was in a much more sound economic situation than many economies which had earlier been regarded as very successful, and are now facing bankruptcy. Many of the present problems are

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indirectly (e.g. reductions in exports, withdrawing bank deposits) or directly (speculation on the zloty) induced from abroad. The crisis is approaching Poland as a peripheral and ‘backwarded’ country (which is now seen as Poland’s advantage) with some delay. However, we cannot rule out the possibility that overcoming the crisis will be more difficult in Poland than in more‐developed countries, especially in view of the fact that the situation likely to emerge in the wake of the crisis may not turn out to be favourable for Poland. It should also be remembered that the current crisis only postponed the resolving of problems that Poland cannot escape regardless of the crisis. Such problems include the inevitable energy crisis due to the shortage of electric power, which is bound to happen once the high dynamics of growth is back; reform of the public finance system; improving the competitiveness of the Polish economy, and many sectoral reforms. Any delays in their resolution will result in tensions and an increasing illadjustment of the Polish economy, and therefore the necessary efforts should not be postponed until‘after the crisis’; the challenges facing Poland should rather be taken on even when the crisis isapproaching, or under way. (Regional Studies Association, 2009)

In last times it could be observed in polish economy among others: the reduction of employment, limitation of credit share, cut of brand cost, smallest investment edition in different sectors. It that Poland initially better managed with crisis, resulted from its weakness, e.g. weak ( not significanty) developed interbank market. Polish enterprises are subordinated from credits in considerably smallest degree than on the West (Enterprises come into effect about smallest financial risk and they invest less). Therefore the limitation of conceding of credit has not touched them in such degree as businessmen in other countries. Majority of polish banking system is a banking system of foreign banks also, decrease of reliance is rearranged for debtors on limitation of credit on new investments from there. Additionally considerably part of companies prospering in Poland are firms with foreign capital - therefore problems on world markets translate into companies’ activity in Poland. In order to hold up development of economy an investment demand must be increased, then it would effect maintenance of greatest employment, superior consumable demand and boost production (Hausner, 2007).

The crisis on financial markets in US, A slow down in the european economy have a negative effect on the national economy. For example in the mid-2008 year, 147 companies announced the reduction of the employment about 10 thousands of persons (exactly the same quantity as in the whole 2007 year) (GUS, 2008).

The forecasts presented by the European Statistic Office (Eurostat) in the mid 2009 indicated a positive gross domestic product (GDP) in Poland at the level of 1,1 (diagram 1 ).

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In spite of, that situation in Poland comparing with other european country seems to be good, it is not possible to say, that crisis has not touched a polish businessmen. Polish economy has come out good in the face of crisis (in comparison with other european countries) as an internal demand existed. According to Krzysztof Wołowicz, economist of bank BPS, the consumption is most the most important element of polish GDP contrary to other countries (GUS, 2009).

Diagram 1. Annual GDP dynamics in EU countries in second quarter of 2009 year (%)* in case of Czech Republic, Spain, Poland and Slowenia oficial forecasts.

Source: (GUS, 2009)

It results from Main Statistics Office (GUS) report made on 28 th of January, 2010 that Poland has ended former year with a positive GDP- it has grown in 2009 about 1,7 percent. GDP has grown for comparison in 2008 year about 5 percent.

GUS has informed, that production capacity of work in industry has grown in 2009 about 2,4% at smallest about 5,5% employment and about 4,9% incrementation of average gross month reward.

GUS has announced that at the end of december 2009, 338 plants have declared layoff of 35 thousand of employees in the nearest future, including 13,7 thousand persons in public sector. One year earlier it was respectively: 361 plants, 36,9 thousands employees and 2,0 thousand persons in public sector There is a worrying

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fact, as it just a big internal demand maintained a polish economy, if joblessness will grow, society becomes poor and it will cause decrease of sale (GUS, 2010).

A big challenge stand before Poland – to keep a positive GDP, even boost it as well as to develop economy. There is no doubt that financial zone should cooperate with economic zone in order to elaborate the best solutions. In spite of forthcoming information of finishing in united states crisis, it is necessary to reckon with it, that it will not end in Poland so fast as in US- polish economy still feels the effects of world economic turbulences.

3.2. Crisis on the market and CSR strategies - relations

According to Benjamin R. Barber “ the actual crisis reveals to the capitalists that social responsibility is necessary. The corporations know that the way of acting how they were acted in the past is responsible for the disasters threatening their consumers”. He also claims that present recession on the market as each crisis is firstly a deep caution for modern civilization and also a great chance to come-back of balance between social and economic capital”(Barber, 2008).

The concept of sustainable development is visible in trends of modern economy, as well as in companies’ management strategies thanks to CSR – it just corporate social responsibility concept has been defined as “contribution of business environment into sustainable development”(Diamantopoulou, 2002).

The recession carries a corrective mechanism that cleans market from this not enough effective business and it causes, that economy leaves from recession intensified internally. (Dymowski, 2009).

Will it become with the CSR concept too? During the recession (the weak market) the managing boards reduce the expenses on operations unrelated with basic business activity. Expenditures on social programs – the most often accepted CSR- or philanthropic operations will be first limited in budgets. It will often mean the end many initiatives of this type. Finally there should appear the well thought out initiatives connected with strategic management.

On this account crisis can become an accelerator of development of CSR concept in Poland.

According to research conducted among entrepreneurs associated in Business Centre Club 51% from them think that financial crisis will weaken CSR, 14,5% hold a view that CSR will be strenghtened, and 20% that CSR will change. On the other hand firm can lead business in a responsible manner according to 67%

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managers, and 54% plan, in spite of crisis, to build and implement a CSR strategy in next year.

It is possible to set up that responsible business will survive as it concerns fundamental value. Challenges, that puts a sustainable development such as, change of climate, high level of poverty in the world or natural stocks shrinking, will not pass away, and social expectations for role of firms in solving of these problems will not diminish.

Financial crisis should cause qualitative change in CSR practice in firms and bind CSR closer with a strategy. For sure it will cause a greatest business visibility through an increase of reporting and communication among firms.

In this way reliance is built indispensable to conduct of business with progress (Anam, 2008, pp.6)

According to the Experts from Responsible Business Forum over 30 per cent of enterprises acting in Poland take up actions within the framework of Corporate Social Responsibility (CSR). The goals and reasons of their social engagement are the following: image promotion, better relationship with local communities, sense of implementation of civil duty, longstanding profitability, “requirement of heart”, better relationship with decision makers, pressure from public opinion, expanding acquisition of new markets as well as pressure from part of employees.

Corporate social responsibility is central to a business’s survival during periods of economic turbulence, rather than a nice to have in times of strong economic growth, according to Paul Adderley, an Institute Members in Scotland committee member. CSR can help generate revenue through new markets, market share and products; lower operating costs through resource efficiency; improve corporate image; recruit and retain the best staff; and reduce exposure to market volatility. (Accountancy magazine, 2008, pp.121).

Corporate social responsibility is a good way of making companies part of this tri-sector partnership. CSR allows companies to join with governments and civil society in a process of negotiation aimed at solving society’s problems, with all involved offering the benefit of their core expertise.(Peters, 2009, pp.12)

Should big and small companies change their CSR policies, resign or function in what they have created for years? Now, in the time of economic crisis that influences the whole world, are investments related to the domain of corporate social responsibility of any sense? Opinions differ from manager to manager. In contemporary economy it is impossible to earn, and thus achieve business goals without enrooting business in reality and social relations. The time for a test for CSR has come.

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According to the latest research, as much as 63% of companies’ market value is related to reputation. The crisis may last one year, two years or even more, that is why I think that in the era of recession, company’s reputation, as the most valuable company asset, is of great significance. Good reputation supports sales and raises brand consumers’ awareness. Relations between business and society have never been so important as they are now. The managerial staff who will knowingly take social needs into consideration when making strategic business decisions and who will be able to look at their own actions critically, draw conclusions from their failures and try to fix errors, will achieve long-term success In my opinion, despite raging recession, changing the CSR policy will not do companies any good, irrespective of the size of an enterprise. From the perspective of time, such a change is a loss the company will suffer. The continuation and consistent application of company’s CSR actions leads to improving and meeting the needs of the local community. The crisis should leave companies stronger in new experience and that CSR will become a company department independent of PR, and related to its strategic management, appreciatedby companies’ managerial staff.(Kowalska, 2009).

The CSR for the time being refers mainly to how the money of the company is being spent (charity), not the way how the gain has been achieved, which is the essence of CSR. It all reflects the general problem of the CSR promotion in the EU, strongly supported (also financially) by the Commission in accordance with “Green Paper”. This approach has been basically based on promotion of so called “good practices” – it is already visible that it failed, because despite all the invested resources it brought very little progress. A new approach seems to be needed to achieve significant effects, including some legally binding incentives (e.g. sustainable procurement, mandatory reporting for the largest companies etc.), but this may face a strong opposition from the business. From the other hand some reactions to the crisis may indicate that the business may be ready for some new proposals). (Piskalski, 2009)

4. CONCLUSIONS

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Crisis time is always the time for new things: new products, new strategies, new approach to market, new ideas etc.

As was mentioned before, during the crisis companies’ owners try to save money by cutting costs in a variety of areas. To survive and keep financial liquidity companies often decided to reduce administrative and offices’ expenditures. However, it is not the most painful for employees – many firms did reduction of employment, resign from overtime, bring furlough into effect and suspend investments. For some companies it was right move but it still affects profoundly employees. There are a lot of disadvantages of this crisis – mainly because it can bring Poland to inferior status as an European country and moderate polish economy. So far polish situation is fine but information that was provided by GUS is at least disturbing – in official report was said that in the end of December 09’ 338 factories declare to make 35 000 people redundant.

Crisis has one advantage – it forces companies to greater creativity and for dynamic operations. Therefore crisis time is a suitable time to do something towards developing CSR in companies. For the question “Is there any sense to develop CSR in crisis time in Poland?” is only one answer – it makes sense because firms start to think differently and they fight for being competitive on the market. If we look backwards we see stagnation and lack of new/fresh ideas in companies activities. Now there is a time to emphasize the most important virtues, strategies, products and gain profits on it. CSR can contribute to reinforcement of market position – right implemented can be strong company’s advantage.

Nonetheless, there is still the question if CSR exists in Polish companies. If we reconsider firms with foreign capital the answer is usually yes. It is caused by transferring the same culture, procedures, rights and norms into another market. But CSR in polish business culture still requires development and promotion. Polish companies generally start with some parts of CSR – they are focus on ethics or EHS rules or creating friendly workplace. Sometimes it is not named as a CSR activity but definitely awareness of CSR increased in polish companies.

There is a growing recognition in Poland that business must be responsible like any other party, and play an active and positive role in the society. This means that enterprises are obliged to focus not only on the price and quality of their products or services, but also on the social and environmental impact of all their activities( United Nations Development Programme, Warsaw 2007)

The current economic and financial structure, with global markets that, as we have seen in recent months, feel the effects of domestic financial problems all over the world, must be revised. After the evolution of the world economic systems over

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the last twenty years, capitalism has become the best of all existing economic models, all of which are imperfect. Each company has its own responsibility in this necessary task, as CSR is a management model for control, with guarantees to avoid undesired facts and to offer more market transparency.

In their CSR implementation process, organizations must redefine their essential business objectives. These objectives must be aligned with the strategy of the company and have to be coherent with the change in organizational culture that CSR represents.

The new attitude, forms and perspectives should be the result of a deep internal reflection that will increase the core value of the firm. This core value will be favoured by the innovation inherent in CSR; its positive effects on internal variables, like motivation or entrepreneurial culture; the support of stakeholders in their new role within and towards the firm; reinforcement of business strategy; strengthening of company market position; and investor confidence. With this panorama, firms will be in a better position to overcome the turbulent situation of the current economic and financial crisis, using CSR as a business opportunity.( Fernández-Feijóo Souto, 2009, pp.36-50)

CSR is increasingly crucial to maintaining success in business—by providing a corporate strategy around which the company can rally, but also by giving meaning and direction to dayto- day operations.

The crisis has made one thing unmistakably clear: The market cannot function without the help of government. It has also shown that when companies act in a way that destroys public trust in their contribution to society, they lose their legitimacy – their “license to operate” – along with the confidence of investors and consumers. To be sure, government has intervened in the economy to an unprecedented degree over the past months, rescuing banks and automobile manufacturers with the help of state funds; but the limits of government intervention are evident.

As the recession has deepened and spread, companies are making drastic decisions to improve their bottom line. Cost containment has been a nearly universal response. According to Manubens (2009), there is a high risk that “some brands will use this negative incentive to bypass social compliance and gain a comparative cost advantage, putting brands with an ethical sourcing culture, which insist on fair labor and human rights practices, at a competitive cost disadvantage”. Corporations, that are dominated by a short-term profit-and-loss goals will likely abate their CSR activities be and be reluctant to go beyond the bare minimum legal requirements. Thus commitment to CSR under economic crisis may wane. However, the decline in CSR motivation may not be a universal tendency.

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Examples of Wal-Mart or South American companies, launching CSR evaluation tool IndicaRSE, or Golder Associates statements (in press) indicate that many large companies CEOs demonstrate commitment to CSR and sustainable development even in economic crisis (Manubens, 2009).

Too many companies see the costs rather than the benefits of CSR. It needs to be judged as an invetment not a cost, with financial and non-financial returns expressed through better financial performance, not in the triple bottom line but in the bottom line. Problem relies on it, that it is contrary to appearance still very few managers understand what it is CSR (Dymowski, Szymańska, 2009, pp.66)

Corporate social responsibility is a concept where changing stakeholders’ expectations are identified and included into management strategy, which direction is to acquire mutual benefits. Recession will not decrease usefulness or utility of the CSR idea determined in this way. Quite the contrary, crisis may mean fall of public relations or philanthropic activities (considering limited budgets) but for activities closely related to business strategy (economically justified) may mean growth. Recession brings many unfavorable effects but on the other hand it clears companies from unnecessary and ineffective activities. Let’s hope that present crisis will correct wrong understanding and practice of responsible business. (Hąbek, 2009, pp.17)

There is no doubt that the next few years will be formative ones for the corporate responsibility debate. With trust in companies possibly at all time lows there is a strong need to evaluate issues such as governance, including the role of investment markets and remuneration in perpetuating a focus on short-termism. Fundamental cultural change amongst corporate leaders is required if we are to define a new business as usual; one that is more conducive to meeting the long-term challenges identified by the corporate sustainability and responsibility agenda. Many of these challenges have not abated during the current crisis.

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