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Corporate Social Responsibility Through Organizational Cooperation

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					                      University of Latvia




               Faculty of Economics and Management Faculty of
                           Education and Psychology




                             Jānis Strautmanis

   ACQUIRING CORPORATE SOCIAL RESPONSIBILITY
       APPROACH THROUGH BUSINESS STUDY PROCESS

  summary of the promotion paper for promotion to the degree of Doctor branch -
The Science of Management, sub-branch - Educational Management




      Scientific research supervisor: Dr. habil.
      psych., Dr. oec, professor Mara Vidnere




                Riga 2007
                                           Abstract
      The goal of promotion paper Acquiring corporate social responsibility approach
through business study process is to look into acquiring corporate social responsibility
and, basing on the structural values orientations interconnections, to develop a model of
acquiring the above approach for MBA students. The research contains analyses of the
scientific literature with an aim to find out theoretical position regarding social ethics and
the essence of corporate social responsibility, values orientations typical of the
organizational culture environment and other factors underlying cultural formation as well
as the potential of the higher educational establishment in the development of the
corporate social responsibility approach; gather information about concepts on personality
studies and humanization of the development activity and moral growth basing on the
cognitive development and values change approach.
      This research investigates the relationship between organizational values and
sensitivity to corporate social responsibility among current employees and business
students in Latvia. Using a questionnaire on value orientation, survey data was collected
from a sample of 718 employees 125 first year business students, and 27 MBA students.
The results of the study show some groups of employees that are remarkably different in
relation to their social responsibility.
      A structural model of nine values orientations describing organizational culture
environment has been developed. The research has revealed conditions important for
purposefully organized manager's development process which is implemented through an
appropriate learning model. Results of the research show that the knowledge obtained at
the university and college has had a positive effect on the development and progress of
students' values orientation. MBA students - prospective managers and entrepreneurs -
focus on the values of efficiently functioning sustainable enterprise including socially
responsible approach.
      Promotion paper has bee developed at the Faculty of Education and Psychology of
the University of Latvia in 2001 - 2006. The total volume of the paper, excluding the
appendices is 142 printed pages. It contains 41 table, 26 figures, and 32 appendices. The
reference list consists of 137 sources.
                                       Introduction
      The task of the higher education is to contribute to the social development and
provide an increasing number of young people with opportunities to acquire quality first
rate higher education and to become qualified, competitive professionals in the European
and global context, whose competences meet the long term demands of the labor market.
In the industrial society, the diploma or degree used to be a crucial precondition for
permanent employment. However, nowadays the formal scope of knowledge is losing its
significance. Analyzing and problem solving skills as well as the ability to apply the
knowledge are a lot more important than the above. Consequently, higher educational
establishments are expected to provide professionals with a lot more extensive knowledge
and skills in the area of employment and human relations. Universities have to maintain
the dialogue with the labor market. However, at the same time higher educational
establishments have to be careful not to divert from their major mission - to ensure and
provide the students with an opportunity to become an all-around educated professionals.
      Study processes and methods have to address students' personal development, their
readiness to live and work in changing environment as well as their readiness and
capability to acquire new knowledge and approaches. The above conditions are vital for
management students. Nowadays, companies and organizations require a professional
manager with analyzing and ideas generating skills. Professional skills of a manager and
entrepreneur extend well beyond the economical information about the company (financial
accounting, analyses, control and forecasts). The manager has to be capable, of making
human resources related decisions, where apart from the economical and legal aspects,
psychological, pedagogical, esthetic and social aspects have to be considered. The manager
has to be good at making professional decisions that contradict neither the personal
independence of the employees nor the needs of the society; he/she has to be
psychologically and pedagogically tactful, respect the peculiarities of the organizational
culture environment and be aware of the principles of attitudes and balance.
      The new management theories are increasingly focusing on the imperative of the
corporate social responsibility. Therefore higher educational establishments have to take
on teaching corporate social responsibility to their students - prospective managers and
entrepreneurs. They are going to run organizations and enterprises, which, just like
individuals, are considered members of the society'. Consequently, enterprises have to take
on the liability and duties of a member of the society and have to contribute to the well
being of the community7. In order to preserve high level of competitiveness and maintain
good publicity and positive public image in the rapidly changing and dynamic conditions
of today, the enterprises have to integrate the principles of corporate social responsibility
into their future mission and vision, long term and short term planning, development of
functional corporate culture and human psychological climate.
      Social responsibility targeted activities, which are largely determined by
managers, is a warrant of sustainable corporate development. Therefore, higher
educational establishments have to take on the responsibility for providing appropriate
education to the prospective managers. Teaching the correct answers is not the main goal
of the study programs. Instead, they focus on inventing conditions and situations where
the students can independently practice resolving the challenges and problems, as well as
ethical dilemmas. Higher educational establishments have to teach their students best
moral conclusions and encourage discussions of the ethical problems which the students
are likely to face in their personal and professional lives. The above tasks are of major
importance, and they play an important role in educating socially responsible managers
and developing their ideals and values.
      The survey of a number of MBA programs in West European and USA
universities show a general tendency to integrate courses focusing on the ethical and
social responsibility of business. Although the courses are named differently, they all
have a common goal - to present the basic business values and activities related notions
and arguments, stakeholders' models, ethical decision making, international business
ethics and corporate social responsibility. At the end of 2006, 12 higher educational
establishments of Latvia were providing 20 accredited MBA programs. The submitted
self-evaluation reports show that a very few of them include a course on ethics (Riga
Stockholm School of Economics, Riga Technical University MBA Program) or corporate
social responsibility (Banking Institution of Higher Education).
      Nowadays, under the conditions of the global economics, an educated and socially
responsible manager is the major precondition for implementation of corporate social
responsibility imperative. The manager has to be emotionally mature and capable of
making ethically responsible decisions; he/she has to be familiar with the alternatives and
possible solutions and has to represent appropriate value orientations. Teaching social
responsibility approach of the prospective managers and employees as well as its further
development is a crucial task. Therefore the research has been given the following title
"Acquiring corporate social responsibility approach through business studies at the
university".
      The object of the research is acquiring managers' social responsibility at a higher
educational establishment in the context of values orientation.
     The aim of the research is to look into acquiring corporate social responsibility
and, basing on the structural values orientations interconnections, to develop a model of
acquiring the above approach for MBA students.

     Questions discussed in the research:
     1. What are the conditions of acquiring corporate social responsibility approach?
     2. Are there any statistically significant values orientations that determine the
organizational culture environment?
     3. What are the factors that affect the values orientation structures differences?
     4. Which are the most efficient methods of managing acquiring social
responsibility approach practiced by higher educational establishments?
     5. Does the knowledge about corporate social responsibility approach acquired
during the studies change the students' values orientations?

       The goal of the research was specified in the following research tasks:
       To analyze management, pedagogical, psychological and socially psychological
literature about the social responsibility, its development, the levels of the development and
its expressions in different organizational cultures.
       To analyze and compare the experience of different higher educational
establishments in acquiring corporate social responsibility approach and analyze the
research on social responsibility and values orientations.
       To draw up statistically grounded scales that reveal values orientation structure
typical of social responsibility and organizational culture.
       To research and observe the study management conditions that impact values
orientation differences and origination of the social responsibility.
       To develop a corporate social responsibility approach model for university students
as well as an appropriate study course and test the course of the values orientations.
1. Basic statements on the essence of corporate social responsibility, objectives and
                    principles of the acquiring

Theoretical grounds of the research consist of comparative analyses of the scientific
literature:
       Management of the university studies reflecting the change from the teacher
       oriented pedagogy to students oriented pedagogy and conclusions about the
       individual and social goals and principles of adult education expressed in the
       research by P. Jarvis, M. Knowles, R. Hughes, R. Ginnett, G. Curphy and T.
       Koke.
       Literature on the requirements of corporate social responsibility and the essence of
       values orientations typical of the culture environment. A. Coroll, M. Mclntosh, R.
       Thomas, D. Leipziger, C. Gill, R. Griffin, S. Robins, E. Utkin, theoretical works
       by A. Milts.
       Concepts on personality studies and humanization of the development activity and
       moral growth basing on the cognitive development and values change approach.
       Works by J. Piaget, J. Rest, V. Zelmenis are found to be the most significant ones
       in the particular area. L. Kohlberg's three stage/six level model of personal moral
       development and C. Giligan's care and responsibility ethics theory have been
       researched as well.
       For the purposes of this Paper, European, USA and Australian research on
       acquiring moral values, values orientations and development of the pedagogical
       grounds of social responsibility have been studied.

      Over the last decades, it has become obvious that no extensive and perspective
development of economics is possible without due consideration of moral. (Mclntosh,
Thomas, Leipziger, Gill, 2003; Robbins, 1997; Siccone, 1998; Garleja, Vidnere, 2000,
Milts, 2000) Economics is becoming more productive if maximum attention is focused on
the principles of ethics. Moral factors are the causes of both - ecological and economical
recession, and it is difficult to find a moral non-related economical issue. Employment
and unemployment, labor division, salary, property, budget distribution, proficiency,
relationship between a seller and a customer, etc. are closely linked with the issues of
justice, duty, personal development, freedom, rights, responsibility, conscience, respect
and admiration, sense of life. It is important to note that the origin of moral is closely
linked with economics. The term gain is a general sociological and economical category
that brings forward the term the good as ethical category that is facilitated by upbringing
in childhood.
      Social responsibility of the company provides for long term economical benefit of
enterprises. Therefore, instead of ensuring maximum profit to the company, social
responsibility ensures optimum profit. {Post, Frederick, Lawrence, 1996). Social
responsibility of the company is a tool that is used to reach the goal - the company
becomes a good and valuable member of the society and evidences partiality. (Mclntosh,
Thomas, Leipziger, Gill, 2003).
      The working document of the European Commission Green Paper ("Promoting a
European framework for corporate social responsibility - Green Paper") says that
implementation of the declared continuous European development strategy is impossible
without facilitation of the social responsibility of the company. {Green Paper, 2001)
      A number of researchers have pointed out that activities of people with strong
values tend to be more ethical than they are usually expected. Nonetheless, unethical
situations are common anyway. {Hughes. Ginnett, Curphy, 1999) Unethical behavior is
encouraged by the lack of understanding about ethics in the society as well as the fact that
unethical activities lead to success.
      Behavior of leaders and managers is determined by their attitude and also - by the
organizational strategy, culture and relationship with the staff. These personnel values
explain the choice and taste, and they are extremely difficult to change. A healthy ethics
system and moral code ensures grounded decision making and efficient operation of the
company.
      The issue of values is important in pedagogic. In the world, value education is
gaining increasing significance. Opinions are present (Milts, 1999), that in the future,
value education in schools will become as important as the native language or
mathematics. Values enable us to look deeper into our lives. On the factual level, people
might be rational objectivists. On the general level, conformities and concepts are sought
and facts are selected.
      On the level of values, facts, concepts, laws and norms are related to the personal
attitude to phenomena. This attitude also includes emotional experience, interests,
personal internal world with motives and confidence, with the choice of subject - what to
prefer and what to give up. Values enable us to fight alienation from the external world, to
reform the requirements of the external world and its norms and facts into the form of
selection and processing in the internal world and in the emotional link with the world. In
the sense of entrepreneurship ethics, this means that the organizational system of values
determines its strategy, structure and decision making. (Velasqez, 2002)
      Under the current economical and globalization conditions, companies in Latvia
have to be aware of the importance of the enterprises' social responsibility in the
formation of a successful long term development, efficient working environment and
company's publicity. It is crucial for enterprises in Latvia to incorporate the principles of
social responsibility in company mottos, in their values, organizational culture and
planning.
       Master's study process in common with informal education that is provided by
employers is an important way and efficient means how to make the ideas of social
responsibility understandable and acceptable among the employees. However, given the
objective differences among the employees, usage of the same study methods and forms
in all organizations is impossible. Therefore, in order to ensure the quality and efficiency
of studies, it is necessary to learn the individual qualities and differences of the
employees.
       Mastering the social responsibility approach by the prospective managers and
employees and further development of the above skills is a crucial task, therefore the
studies and teaching methods have to focus on the progress of the students, readiness to
live and work in a changing environment, willingness and capability of learning new
things and approaches.
                  2. An outline of the results of the research
2.1. Methodical foundations of the research
       The research on acquiring the corporate social responsibility approach is based on
the following theoretically grounded assumption - the expression, activity, methods and
strategy of corporate social responsibility of a particular company is determined by the
particular company's corporate organizational culture environment. Responsibility to the
staff, consumers, investors, government, associations and different interest groups, care
for the well being of the community and entire society as well as environment protection
are the main areas of corporate social responsibility.
       Organizational culture environment is the total of the social, tangible and
intangible conditions of the organizational existence and activities as well as the mutual
objective and individual attitudes and interchange determining the character of their
existence and development. External organizational environment, social conditions,
particular personalities and their values orientations determine the development and
character of the organizational culture environment development. On its part,
organizational values system determines its strategy, structure and decision making. The
manager, his/her personality, intellectual and emotional qualities as well as his/her will
and values orientations have a crucial role in determining the character of the
organizational culture environment.
       Therefore, promotion of the corporate social responsibility, which is one of the
sustainable development components crucial for managing acquiring of the corporate
social responsibility approach, requires studies into the values orientations determining
the organizational culture environment.
       The corporate social responsibility interaction model in Figure 1 shows the
structural approach of the research.




         Figure 1 Model of interaction of corporate social responsibility
      The research required the analyses of the corporate social responsibility approach,
identification of the values orientations typical of the organizational culture environment
and determining the management conditions of the prospective manager's professional
and social competences formation in the higher educational establishment.

2.2. Research on value orientation of employees
      The research is based on the employees of small and medium size enterprises of
Latvia. They represent the following fields of activity: finance mediation, wholesale and
retail sale, hotels and restaurants, real estate transactions, rent and other kinds of
commercial activity. The size of population in 2004 in Latvia was n=235,3 thousand
people.
      Respondents to the research (n=618) are managers, experts, public servants,
service and trade providers of different levels. However, the research does not cover
workers - both unskilled and those representing simple professions.
      In order to obtain the data for comparison, the following additional respondents
were questioned: 100 employees from state budget institutions (state and municipality
administration, State Revenue Service, the Bank of Latvia and educational institutions)
and 125 first year students of entrepreneur management - the prospective employees.
      The second stage of the poll included 27 MBA students. The values orientation
poll contains information provided by 870 respondents.

       Description-of the method: to obtain data basis through survey over a definite
period of time so that the data basis can be processed by statistic data processing and
analyses software Statistic 6.
       Survey contained:
       1. Value orientation survey, elaborated within the European partner states grant
       cooperation project WACRA, in English, adjusted in Latvian. (Garleja, Vidnere,
       2001);
       2.Business ethics development test (Уткин, 1998), adjusted in Latvian.
       The task of the respondent was, by using Likert scale method, to evaluate 91
statements -indicators given in the value orientation questionnaire that describe
organizational phenomena, tendencies, principles and other criteria. Levels: 7
extremely important; 6 -very important; 5, 4, 3 - important (by growing significance); 2 -
of little importance; 1 - of very little importance.
       In order to better explain the results, additional variables were invented:
           gender (1 - male; 2 - female); age (1 - under 30; 2-30-44 years of age; 3
           - 45+years of age );
     -    type of the company (1 - enterprise; 2 - bank; 3 - state institution, 4 -
         business school student);
      -education (1 - secondary; 2 - unaccomplished higher; 3 - higher);
      region (1 - capital city Riga,; 2 - elsewhere in Latvia).
      By the means of cluster analyses, the 91 statements on the questionnaire were
grouped into nine groups/scales, each of them representing different value orientations
typical of the organizational culture environment. The number of questions in each values
orientation group varied from six to thirteen. Kronbah's a test was used to check the
mutual conformity of the questions and their compliance to the respective group. For the
purposes of the research, nine values orientation scales were developed.
      The first values orientation scale includes statements that describe employees as
organizational success oriented. This type of orientation is characterized by a row of
external features - facilitated buildings and premises, presence of international contacts
and export. Due to precise work and responsibility division as well as career possibilities,
the employees are proud of their success, they possess sense of commonality, feel
involved and secure. The management views employees as a significant factor of
organizational development, and they try to demonstrate a positive example. The first
values orientation scale can be conventionally referred to as orientation to the visible
success and development of the organization.
      The second values orientation scale includes statements that describe employees'
orientation to efficient functional organizational culture: precisely defined decisions,
delegating, performance, control, communication, incentive and loyalty. This means focus
on providing employees with the sense of security. The second values orientation scale
can be conventionally referred to as orientation to internal communication or functional
organizational culture.
      The third values orientation scale includes statements that describe employees'
orientation to availability of information, explanation of goals and assignments, their
purposeful fulfillment as well as individual respect and admiration. The third scale of
values orientation can be conventionally referred to as orientation to employees'
involvement and participation.
      The fourth values orientation scale includes statements that describe employees'
orientation to the necessity of improving knowledge as a condition for the development of
professional competence and personal improvement. The fourth values orientation scale
can be referred to as orientation to the importance of continuing education or personal
development.
      The fifth values orientation scale includes statements that describe employees'
orientation to reducing personal integrity as opposed to collectivism, orientation to
common free time activities, and importance of the religious or national belonging. The
fifth values orientation scale can be conventionally referred to as orientation to group
values and reducing personal integrity in favor of work collective.
      The sixth values orientation scale includes the statements describing employees'
orientation to professional qualities - knowledge, experience, incentive, purposefulness,
discretion and work quality. The sixth values orientation scale can be conventionally
referred to as orientation to professionalism.
      The seventh values orientation scale includes statements that describe employees'
orientation to competitive products and services, which is possible to reach by extensive
knowledge in market economy, sufficient resources, highly motivated staff and
demanding management. The seventh values orientation scale can be conventionally
referred to as orientation to quality.
      The eight values orientation scale includes statements that describe employees'
orientation to positive, respectable-, friendly management and appropriate qualities of the
manager. On the whole, this creates free, democratic and mutually beneficial
environment and comfortable conditions in the organization. The eighth values orientation
scale can be conventionally referred to as orientation to democratic, friendly and
beneficial management.
      The ninth values orientation' scale includes statements that describe employees'
orientation to mutual assistance, which is determined by human and friendly interpersonal
relations between the manager and the subordinates as well as among the employees. The
ninth values orientation scale can be conventionally referred to as orientation to human
relations.
      A structural model of nine values orientations describing organizational culture
environment has been developed (Figure 2).
      Figure 2 Structural model of nine values orientation describing organizational
                          culture environment
      Basing on the results of the research, the disperse analyses was used to identify the
significant factors that have impact on values orientation differences arising from the
organizational culture environment: these are the gender and the type of the place of
employment. Feature 'gender' is of the biggest importance (F=5,8, p <0,00). (Table 1)

                                                              Table 1

Results of disperse analyses




      Impact of feature 'gender' has statistical significance in 7 out of 9 values
orientation scales. Exception - orientation to reducing personal integrity in favor of group
values and orientation to quality.
      Tabe 2 Importance of a factorial feature GENDER in
      values orientation scales




      The importance of gender differences is a proverbial feature that has been granted
one more empirical proof by this research. According to Carol Gilligan's 'Morality of
Care and Responsibility', women are more care, assistance, social relations, responsibility
oriented while honesty and abstract principles based ethics is more typical of men.
(Gilligan, 1993). The fourth and third scales present the biggest difference between the
assessment of values orientation importance by men and women — orientation to personal
development, including availability of education and orientation to employees'
involvement, horizontal organizational structure respectively. The same tendency shows
in the question about assessment of the importance of honesty as ethical category: the
research proved the statistical significance of the gender specifics in different
assessments: assessment of honesty as esthetically higher category by female respondents
outweighed that of male respondents by 9%.
      The factorial feature 'type of the place of employment — company type' (F=2,209,
p=0,00) has a lesser role in determining value orientation differences in the research,
nevertheless, it is of statistical importance. Namely, the above feature determines
differences in value orientations of the respondents belonging to any of the analytical
groups: enterprises, banks, state institutions, students. Type of the place of employment,
important differences were found in orientation to friendly management and human
mutual relations (scales 8 and 9).
                                                          Table 3
    Importance of a factorial feature COMPANY TYPE in values orientation scales




       According to the comparison of the values orientations' averages, (Table 3)
friendly management has been ranked the highest. This points to the tendency of
appreciating psychological comfort, a manager with low demands and enjoyable working
conditions. (Average evaluation=6,26 points out of 7).
       The aforementioned style of management may be effective providing high
employees' involvement in decision making and precise delegating of obligations, rights
and responsibility practiced by the organization.
       In this respect, results of the research show a contradiction — low assessment of the
orientation to organizational functional culture and orientation to employees' involvement
and participation. (Respectively 3,4 and 3,24 points out of 7.)
       Features that facilitate pride in organizational belonging and loyalty of employees —
orientation to organizational success including a row of external features — facilitated
buildings and premises, international contacts and export - have been assessed highly. In
this type of organization, employees take pride in their success; due to precise division of
work duties and career possibilities, they feel united and secure.
       Orientation to quality enjoys equally high assessment as well as orientation to
competitive products and services. The above is possible to achieve if the company
possesses extensive knowledge about the market, sufficient resources, highly motivated
employees and demanding management.
       At the same time, orientation to quality means employees' responsibility for their
clients, therefore it has to be viewed as one of the corporate social responsibility
facilitating values orientations.
       It has to be concluded that participants have ranked the role of education in the
context of personal development pretty low: orientation to the necessity of improving
knowledge as a condition for the development of professional competence and personal
improvement has scored 3,71 points out of 7.
      In order to find out different analytical groups, 3 factorial features were compared -
GENDER, COMPANY TYPE and REGIONS. As shown by the results of the triple
interfactorial interaction test (between categoral effects variance) in Table 4, the biggest
number of differences appears in the group males who work in enterprises outside the
capital city. This group shows differences in nearly two thirds of the scales.
                                                                Table 4
             Analytical groups ranged by number of different scales




     During the course of comparing characteristics of the group males who work in
enterprises outside the capital city with the other groups, it has to be concluded that the
aforementioned group has insignificant age differences; however it differs greatly in terms
of the level of education. 39% of the respondents have secondary education (including
125 first year students; apart from these - among the employees - 30% have secondary
education). This indicator is significantly higher for the group males who work in
enterprises outside the capital city — 68%.
      Consequently, although disperse analysis evaluated the factorial feature
EDUCATION as statistically insignificant - F=l,15, p=0,3 (See. Table L), the
determinator of the severe value orientation differences in the group males who work in
enterprises outside the capital city is the lowest level of education.
      The main cause of the great number in the differences is the comparatively low
level of education in this group. The above circumstances are a potential threat to the
personal development, social equality and integration into the society of the analytical
group males employed in enterprises outside the capital city. The growing differences
might facilitate the social nihilism of the people in the above group. Consequently, the
organization, its management and the society as a whole might face increasing difficulties
to motivate these people about the usefulness and necessity of higher esthetical standards
and social responsibility principles of the company. The aforementioned group should
enjoy enhanced attention of the organizers of adult life long education, and employers
among them. Life long learning is an important condition for the facilitation of the entire
concept of corporate social responsibility. It includes the course of business ethics, moral
reasoning at universities and company organized training.

      3. Evaluation of honesty as ethical value and results of test on business ethics
       Participants to the value orientation test had to evaluate honesty as ethical value in
the context of organizational and management activities. The range of evaluation 7 —
extremely important, 6 - very important, 5, 4, 3 - important (by growing significance), 2
- of little importance, 1 - of very little importance.
       In E. Utkins business ethics test, respondents had four options - Agree Completely,
Agree Partly, Disagree Partly, Disagree Completely - to evaluate 10 company ethics
sensitive situations.
       The importance of honesty enjoys higher average evaluation by female
respondents - 170 or 29,7% females chose the answer 'extremely important', while the
same evaluation was chosen only by 20,6% male respondents. We can observe essential
differences in the evaluation of honesty, if we single out students. 18-19 year old first
year students gave the category of honesty significantly lower evaluation. The average
evaluation of the above category by the total of respondents (n=840) was 5,6 points.
Among them males (n=42) evaluated honesty with 5,1, but female students (n=83) - even
4,82 points.
       Evaluation of honesty by age groups demonstrated ascending trend: each next age
group gave higher evaluation. Honesty evaluation data were subjected to disperse
analyses in order find out the impact of the factorial features interaction. The analyses
resulted in confirmation of the statistical significance.
      E. Utkins has provided interpretation of the test results: up to 5 points - excellent
score! from 6 to 10 - highly developed level of ethics; from 11 to 15 - level of ethics high
enough; from 16 to 26 - medium developed ethics; from 27 to 35 - perfection of moral is
needed: 36 and above - danger! Respondents scored from 3 to 24 points. Results of E.
Utkins business test for students of entrepreneur management program (n=45): average
12,98 with standard deviation 3,8.
                                                              Table 5
                  Average results of test on business ethics




      The average business ethics test results fell into the section that is defined by E.
Utkin as 'level of ethics high enough'. The differences-in business ethics test results
confirm the importance of the gender factor which was found out in the course of disperse
analyses. Average evaluation by male respondents is close to high level of ethics whose
border is 10 points. However, on the average, female respondents are closer to the next
lower business ethics level with medium developed ethics whose border is 16 points. The
difference in the average score is 20%.
      The relatively lower business ethics level among female students clearly proves the
tendency that showed in value orientation inquiry, where honesty was evaluated as ethical
category. Likewise, evaluation by first year male students was by 5% higher than by
female students.
      The survey organized to find out how respondents evaluate importance of honesty as
ethical category, identified statistically different analytical groups and helped to
confirm an important theoretical statement which says that life experience is an important
factor for personal ethical development, and therefore mastering moral values is a life
long process.
      Results of the research showed the trend similar to the one present in the research
carried out in 2002 by Lozano International Management University which questioned
entrepreneurship students and university graduates - currently managers of different
levels. Similar to the practical results of the promotion work, the Swiss research
            corporate responsibility enjoyed higher evaluation among the managers than
evidenced that
among the students.
      Evaluation of honesty as ethical category increased with every age group of the
respondents to the value orientation inquiry; evaluation in every age group among female
respondents was slightly higher than that by males of the respective age group.
      Out of all analytical groups, first year entrepreneurship students- both males and
females - showed the most different evaluation of the category of honesty. Furthermore,
opposite to the general tendency among females to give honesty a higher evaluation,
female students were more modest in their conclusions: the average of the evaluation of
honesty by males was 90% of the total of the respondents, by females - only 86%.
      Business ethics development level test shows exactly the same gender difference
with the same tendency - lower evaluation of honesty by female students.
      The results show that the development of the first year students correspond to the
respective age from 16 to 21 years for boys and from 15 to 20 for girls. The above age
frame is extremely important in personal development.
      This makes us conclude, that, in general, moral development of first year students
corresponds to the conventional stage defined by L. Kohlberg. Apart from that, their
social responsibility is in progress.
      Low evaluation of honesty as ethical category by students can be explained by lack
of life experience. Hopefully, over the years when the young people will have to face and
resolve moral dilemmas in their practical lives, they will experience ethical maturity, and
this will help them develop into socially responsible people who will be able to
implement the principles of socially responsible entrepreneurship.
      However, the process of the ethical development of youth should not be left
without supervision. Personal experience might create one sided opinion about life,
therefore, personal experience is not enough. It should be supplemented by the positive
experience of history and society taught in general and higher education study courses and
organizational staff trainings.
       Honesty is the key provision for entrepreneurial success. Honesty ensures long
term success. It is the sole way to make the company trustworthy. Trust is the capital that
has to be sought.
      The necessity to facilitate the role of social responsibility in the society and
entrepreneurship environment has to be placed at the top of the list of the tasks for higher
educational institutions. The above assignment is closely related with two other tasks: 1)
to develop understanding of the issues of ethics among students; 2) to facilitate
development of moral obligations and attitude to personal responsibility.
      Teaching the correct answers is not the main task of the courses of ethics offered
by higher educational institutions. Universities and colleges have to prepare students for
practical situations when they will have to resolve ethical dilemmas; they have to
introduce the best moral acknowledgements, teach students how to lead successful
discussions on ethical problems that they will face in their personal and professional lives.
These tasks are very important, and they have to educate socially responsible managers
impersonating high ideals and values.

 4. Value orientations of MBA students at the end of the study course Corporate social
                                         responsibility
      The urgency of the MBA program is determined by the modern tendencies in the
economics and political integration, changes in the global business environment,
necessity to include theoretical knowledge in the resolution of the practical problems of
the international business. The study program is vitally important because of the necessity
to promote the economic growth of Latvia, develop a stable economical system as well as
to achieve the strategic goal of Latvia and other Baltic countries - competitiveness in the
European Union and Northern and Eastern Europe. Consequently, Latvia badly needs
study programs that would improve education of the business management professionals
and provide extended knowledge of the global economics and business management.
      The practical implementation of the program focuses on group work and
development of different independent projects that would be subjected to group
discussion, involvement of MBA students in the university research projects, seminars by
foreign guest lecturers. Study courses would interpret the general theoretical ideas with
the help of particular professional activity and practice related case studies. The course
includes lectures, seminars, practical tests, consultations, independent research and
context related tests. The studies largely integrate techniques and methods that facilitate
the development of the analytical, critical, problematic, systemic and creative thinking,
promote team work skills, business communication, including cross cultural
communication, presentation and other skills. The program focuses on independent
individual or group research work (different sources of information), reports, annual
papers, projects, including international, business research and master's thesis.
      The main goal of the MBA study programs is to offer the students a possibility to
become managers - owners or managers of different levels, whose task would be people
management within their competence - and help the students to carry out this possibility
in life. In order to enable the prospective managers to initiate and implement the strategy
of sustainable development, the higher educational establishment has to provide
conditions for acquiring the necessary knowledge and developing positive attitudes. One
of the means is inclusion of the subject 'corporate social responsibility' into the study
program. According to the research by professors Marten and Moon, 2004, European
universities fail to have a common approach to choosing the name of the course.
Consequently, there are different names to a particular course, which are all synonyms:
Corporate social responsibility, Business ethics, Corporate Citizenship, Sustainability,
Business and society, Business and globalization, Corporate environmental management,
Stakeholder management.

      The study course "Corporate social responsibility" teaches MBA students
theoretical approaches, corporate social responsibility practices, its analyses and the best
practices and methods. The course focuses on the role of the corporate social
responsibility approach in the organizational development and improving competitiveness
in the context of the global business environment.
      At the end of the course, the students have acquired knowledge about the role of the
corporate social responsibility in providing a successful, sustainable and efficient
operational environment and developing the company publicity. 'MBA students have
acquired the methods and strategies necessary for implementation of the corporate social
responsibility practices, they can apply the principles of the social responsibility in the
definition of corporate missions, values, organizational culture and planning.
     Figure 3 Model of acquiring corporate social responsibility at university

      The model of corporate social responsibility in Figure 3 reveals the essence of the
study management: the students acquire new knowledge about the corporate social
responsibility basing on their experience during bachelor studies, internships and practical
work in their jobs. Classroom work encourages students to test and compare their
knowledge about the corporate social responsibility in running an enterprise, prospective
shapes of work and benefits.
      The aim of the research was to find out if MBA students show differences in the
levels of values orientation and business ethics compared to the results obtained by the
research into the level of values orientations and business ethics by employees. Almost all
MBA students work in enterprises that comply with the employees' values orientation
research basis. This enables us to conclude that the results of the research are comparable.
In order to obtain a more complete idea about the MBA students' values orientation
differences, the research compared the averages. MBA students evaluated the importance
of the given statements against a growing scale from 1 (minor) to 7 (extremely important).
      On the whole, compared to employees' poll, MBA students' assessment was
higher by points with the average index of 5,267, while the employees' was 4,339 on
Likert's 7 point scale.
      This difference can be explained by the relatively more positive outlook on the
organizational activities by the young educated people. Apart from that, MBA students
showed uniformity of answers: there were no distinct values orientation scales assessment
favorites and tail offs, with a single exception of Scale 5 which describes reducing
personal integrity in favor of the work collective. Likewise, employees' assessment was
low too. Table 6 shows that Scale 6 has been rated highest by MBA students - orientation
to professionalism: orientation to professional qualities - knowledge, experience,
incentive, purposefulness, discretion and work quality. Scale 6 is closely followed by
another social responsibility facilitating values orientation - orientation to efficient
organizational functional culture: precisely defined decisions, delegating, performance,
control, communication, incentive, loyalty. It is likely that the knowledge obtained by the
students during the course of studies has contributed to the high assessment of this scale.
     Likewise, orientation to quality - care for output, product and services - was
ranked highly. This feature was assessed as 'very important'.




         Figure 4 Comparison of average assessment of values orientation poll
      Comparison of the analyses of the average describing the MBA students',
employees' and other organizational staffs poll shown in Figure 4, reveal significant
differences in assessment of several scales. Scale 8 - orientation to professionalism which
was ranked highest by MBA students, scored nearly 2 points less by employees and was
ranked fifth. Moreover, values orientation to positive and friendly management and
appropriate character features of the manager, which ensures free, democratic and
mutually favorable environment in the organization as well as comfortable conditions,
was ranked highest by employees, but was marked 8th by MBA students and overtook
only Scale 5 - orientation to reducing personal integrity in favor of the staff. Differences
in values orientation importance between MBA students' and employees' polls are best
described by comparing the tables in Table 6.

                                                             Table 6

             Comparison of the values orientation assessment ranks
                  Employees                      MBA students




      It has to be concluded that the knowledge obtained in universities and colleges .has
impact on the formation and progress of the students' values orientation. The prospective
managers focus on efficiently functioning sustainable enterprise values including socially
responsible approach. This is evidenced by the fact that along with orientation to
managers' professionalism, organizational functionality and care for quality (barely over
half a point higher), MBA prioritized orientation to human mutual relations (exceeding
employees' assessment by one point), employees' involvement (by 2.24 higher), personal
development, including availability of education (by 1,68 points higher). Comparative
graphic analyses of values orientation is given in Figure 5 "Comparison of the average
assessment of values orientation poll by MBA students and employees".
      Figure 5 Comparison of the average assessment of values orientation poll by
                      MBA students and employees
      Values orientation to friendly, democratic, comfort providing management as well as
orientation to- the visible external organizational success were ranked higher by
employees and staff of other organizations, however the above features enjoyed relatively
less popularity by MBA students and in the poll were ranked respectively eighth and
seventh out of nine.
                                Conclusion
      The research has lead to several conclusions:
       1. Corporate social responsibility develops under the conditions of adequate
personal and society benefiting values orientation. Results of the values orientation
research emphasize focus on quality, professionalism, personal development, employees'
involvement and participation. The distinctive values orientations that form organizational
culture environment have to merge towards human mutual relations: tolerance, sympathy,
empathy.
       The research proves the presence of statistically significant connection between the
category of honesty and social responsibility. Social responsibility is part of
organizational culture and a value in the organizational culture environment. Condition
for the development of social maturity is intelligence, unity of professionalism and social
competence, and human relations.
       Development of social responsibility is a change in values orientation, whose task is
shaping the attitudes, transformation of the personal position so that it matches
individual and public interests. Values orientation takes place in the course of
accumulating experience. Therefore, studies at a higher educational establishment
(university, college, professionalism development courses) are of great importance as they
facilitate accumulating experience and the principles of social responsibility.
       2. Results of the research show that the knowledge obtained at the university and
college has had a positive effect on the development and progress of students' values
orientation. MBA students - prospective managers and entrepreneurs - focus on the
values of efficiently functioning sustainable enterprise including socially responsible
approach. This is evidenced by the fact that along with the orientation to manager's
professionalism, organizational functionality and care for quality, MBA students have
assigned high priority to human mutual relations, employees' involvement, personal
development, including availability of education. Orientation to friendly, democratic and
comfort providing management (Scale 8) as well as orientation to the visible external
organizational success (Scale 1) were ranked highly by employees and staff of other
organizations, however these enjoyed relatively less popularity among the MBA students
and were ranked eighth and seventh respectively in the MBA values orientation poll.
       A similar tendency was confirmed by the business ethics' level assessment test,
where MBA students assessed 10 workplace ethics wise sensitive cases and in the average
scored 8,926 points (standard deviation 0,917). This result is by one ethics development
level higher than in the test by employees and staff of other organizations.
      3. The choice of appropriate study methods is a condition for efficient pedagogical
activity. Priority should be given to methods that facilitate implementation of the
students' knowledge, encouragement of independent thought, search for causes and
interconnections, defining generalizations as well as methods focusing on learning ability
that lies at the bases of life long education. Balancing academic and professional
knowledge, procedural structural approach to each separate course of studies and the
entire study program on the whole facilitates the academic discourse. Dialogical approach
enhances interaction between the reader and the student, and a dialogue encourages
cooperation and innovative studies at a university or college.
      4.The interconnections that were discovered during the research proved to be
significant pedagogical conditions for the development of social responsibility:

       - Condition for encouraging social responsibility attitude with an aim to develop
prospective managers' and employees' social skills. This is a versatile process: it includes
the unconscious, cognitive, voluntary, emotional, esthetic, social, behavioral, forming,
rational and moral dimension - the aggregate of these form a human. Moreover, shaping of
attitudes refers to both - the contents and form of the education. Universities and colleges
should offer enterprises interests oriented post graduate education for personal
development and social experience. Employer's initiative is of great importance here, and it
can materialize through courses and seminars for employees hence facilitating the social
responsibility principles declared by the management of the enterprise.
       - Condition for cognitive moral development which is crucial during adolescence
and student's age. Knowledge of the cognitive and social moral development theories and
related research is important in both - formal and informal education. This knowledge
should be included in the study programs and used in the contents and course of the
education. High school, university and college shape the system of values and ideals of the
prospective specialists and managers. Cognitive approach to the development of ethical
opinions facilitates human self-cognition and mastering of social skills.
       - Procedural condition for changing values. Development of social responsibility
attitude has to be goal oriented and precise; it should take into account the particular needs
and objective differences as well as base on the positive in a person, their experience and
facilitate critical self-reflection.
       Interconnections discovered by the research being presented as thesis for
defense:
       Thesis No. 1
       Development of the social responsibility is determined by the following motivated
criteria:
          adequate, personality and society contributing values orientations,
          ability to analyze, evaluate and make choices,
          appropriate knowledge and ability to understand the regularities of the social
          and global economic relations.

      Thesis No. 2
      Interconnections in the system "corporate needs - public needs - needs of the
future generations" form the grounds for the students - prospective managers and
entrepreneurs - to comprehend the role of the social responsibility in facilitating corporate
efficiency, which contributes to the development of positive attitude by students.

      Thesis No. 3
      The concept of sustainable development and responsible personality, facilitating of
independent thinking, search of causal relationship and wording of generalization lie at
the foundation of the optimum model for acquisition of the corporate social responsibility
approach. Dialogical approach facilitates the interchange between the teacher and the
student. The dialogue is the tool that promotes cooperation and innovative studies at the
university.
                         Importance and novelty of the research
1. The research resulted in the development of a model for mastering corporate
   social responsibility for university and college students. This model has been
   implemented and its efficiency tested. Purposeful and skillfully implemented
   studies that are based on the knowledge of the differences and needs of students
   and which meets the public interests and long term demands of the labor market,
   is a crucial precondition of training the prospective managers. The research
   focuses on the quality problem of the studies and their compliance with the
   requirements to Latvian and global economics and working environment.
2. Results of the research point out the necessity of social responsibility facilitating
   ethics studies in entrepreneur training programs in universities and colleges.
   Universities and colleges have important tasks in preparing the prospective
   managers. The time that has been spent studying is an important stage in the
   personal development in the early adult age. This age is typical for developing
   permanent attitudes and system of values through intense socializing and
   acquiring knowledge and experience.
3. The research has revealed conditions important for purposefully organized
   manager's development process which is implemented through an appropriate
   learning model.
4. A structural model of nine values orientations describing organizational culture
   environment has been developed.
5. Results of the research identified significant factors determining differences in
   values orientation: the gender and the type of the place of employment.
6. Results of the research lead to identifying and defining analytical groups with
   significant differences in the assessment of honesty as an ethical category and
   within the context of values orientation.
7. The research has contributed to the development of assessment instrument for
   organizational culture environment values orientation - nine scales representing
   values orientation typical of organizational culture. These scales were updated,
   analyzed by context and tested by application of statistical methods.
             Methodical foundations and the timescale of research

Methods used in the research:
1. Analyses of the scientific literature with an aim to find out theoretical position
regarding social ethics and the essence of corporate social responsibility, values
orientations typical of the organizational culture environment and other factors underlying
cultural formation as well as the potential of the higher educational establishment in the
development of the corporate social responsibility approach.

2. Empirical methods: values orientations poll, questionnaires, business ethics level
evaluation tests, data processing and analyses using software Statistical 6.

The research commenced in October 2001 with selecting appropriate scientific literature
and was finalized in August 2006 when the conclusions of the research were summarized
and prepared for presentation. Stages of the research:
     October 2001 through July 2002 - the stage of theoretical analyses, recognition
     and wording of the main problem of the research, preparation of the goals and
     tasks of the research.
     August 2002 through August 2003 - the stage of continuing theoretical analyses,
     finding the appropriate research methods, preparation and testing the research
     tools.
     September 2003 through December 2003 - the stage of the research procedure:
     work with questionnaires and data collection.
     January 2004 through December - the stage of data entering, processing, testing
     and analyzing.
     January 2005 through September 2005 - the stage of summarizing and processing
     the conclusions, developing the study course "Corporate social responsibility".
     September 2005 through May 2006 - the stage of implementation of the MBA
     study course "Corporate social responsibility" and organizing the students' poll.
     From June 2006 - the stage of summarizing, processing, interpreting the
     conclusions and preparing the research for presentation.
     Author's academic publications related to the theme of promotion paper
    Development of sustainable economy: some tasks for business schools. Proceedings
    of the conference "Development of economy: theory and practice" -Kaunas: Vilnus
    University Kaunas Faculty of Humanities, 2004 ISBN 9955-634-9 p. 147-149
    Vērtībizglītības loma nākamo vadītāju sociālās atbildības veidošanas procesā. Rakstu
    krājumā “Uzņēmējdarbības iespējas, problēmas un to risinājumi globalizācijas "
    apstākļos, 5. starptautiskā zinātniskā konference. - Rīga: SIA ,,Biznesa augstskola
    Turība", 2004 ISBN 9984-766-05-5 390.-395. lpp.
    Korporatīvās sociālās atbildības veidošana biznesa studiju procesā. - Izglītības vadība.
    LU Raksti, 697. sējums - Rīga: Latvijas Universitātes Akadēmiskais apgāds, 2006
    ISSN 1407-2157 115.-122. lpp.
    Formation conditions of corporate social responsibility in organizational culture -
    Europe '$ Journal of Psychology Vol. 2, Nr. 6, May 2006 ISSN 1841 -0413 Available
    http://www.ejop.org/archives/2006/05/formation_condi. html
    Komercuzņēmumu darbinieku vērtību orientāciju pētījums korporatīvās sociālās
    atbildības pieejas aspektā. - In print Latvijas Zinātņu Akadēmijas Vēstis, (co-author
    M. Vidnere)
    A comparison of MBA students' and employees' values orientation related to
    corporate social responsibility. - In print Management Economics and Business
    Development in the New European Conditions, Brno University of Technology
    Faculty of Business and Management.
    Latvijas komercuzņēmumu darbinieku vērtību orientācijas korporatīvās sociālās
    atbildības pieejas aspektā. Referēts 29.04.2006. - In print Sabiedrība un kultūra,
    Liepājas Pedagoģijas akadēmijas 9. starptautiskās zinātniskās konference
    Korporatīvo sociālo atbildību determinējošās vērtību orientācijas Latvijas
    uzņēmumos. - In print Izglītība sociālo pārmaiņu apstākļos. Daugavpils
    Universitātes Sociālo zinātņu fakultātes Sociālo pētījumu institūts, (co-authors M.
    Vidnere, D. Igoņins)


Author's speeches at conferences related to the theme of the promotion paper
    Development of sustainable economy: some tasks for business schools. Proceedings
    of the conference "Development of economy: theory and practice” -Kaunas: Vilnus
    University Kaunas Faculty of Humanities, 2004 ISBN 9955-634-9 p. 147-149
    Vērtībizglītības loma nākamo vadītāju sociālās atbildības veidošanas procesā. Rakstu
    krājumā “Uzņēmējdarbības iespējas, problēmas un to risinājumi globalizācijas "
    apstākļos, 5. starptautiskā zinātniskā konference. - Rīga: SIA ,.Biznesa augstskola
    Turība", 2004 ISBN 9984-766-05-5 390.-395. lpp.
    Latvijas komercuzņēmumu darbinieku vērtību orientācijas korporatīvās sociālās
    atbildības pieejas aspektā. Reported 29.04.2006. "Sabiedrība un kultūra", Liepājas
    Pedagoģijas akadēmijas 9. starptautiskās zinātniskās konference

				
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