• A
  • A
  • A
  • ABC
  • ABC
  • ABC
  • А
  • А
  • А
  • А
  • А
Regular version of the site
  • HSE University
  • Research projects
  • Sustainable company development in transitional economy: the problem of balancing economic and social components of business management

Sustainable company development in transitional economy: the problem of balancing economic and social components of business management

2008
Department: Institute for Social Development Studies

The concept of sustainable development is complex, and is part of the area of corporate behavior, which is itself closely related to responsible business. The notion of corporate social responsibility (CSR) has been gaining importance in relations between business, state and society in Russia. The issues of corporate responsibility and corporate citizenship joined under the umbrella of sustainable development form one of the top-priorities in modern management research around the world. However the conceptual framework has still not been fully worked out, possibly due to the fact that the concept is relatively new, which substantially undermines the efforts of researchers attempting to study specific corporate management methods within the area of sustainable development. 

This research is one of the pioneering works in analyzing the application of sustainable development principles in management within modern Russian corporations.

The target of the research is a set of principles, criteria and methods, ensuring a sustainable development environment for major Russian corporations, operating in the transitional period.

The aim of the research is to reveal problem areas in understanding the issues of sustainable development in modern Russian companies and to determine the development of an interaction mechanism between sustainable development theory and practice in the Russian business environment.

The work is unique since it involves analyzing the relationship between the conceptual origins of corporate social responsibility and global tasks set in the context of this field and the practice of actually carrying out corporate programs in this area within Russian companies. The analysis of this interaction revealed the key characteristics of building CSR-focused companies at this stage of sustainable development in Russia.

The empirical part of the research includes:

  • In-depth interviews with experts, representing the parties introducing sustainable development principles into the management of modern Russian companies,
  • Semi-structured interview with Russian large, medium and small business (FMCG, financial sector, industrial sector, logistics, HR, IT, medicine, PR, retail trade) that are not directly involved in CSR or social accounting.

The use of the information from the control group (managers not involved in CSR) as a foundation for comparing and obtaining objective CSR provides an opportunity to take a more objective view of the existing situation. This approach drastically differs from most studies on CSR problems conducted in Russia. The latter are usually characterized by focusing on companies that practice CSR or show best practice in this area, which obviously skews the evaluation of the situation. 

Our analysis of the conceptual foundations of sustainable company development revealed that despite development of this topic in academic circles over many years, there is no clear definition of the concept of sustainable development. Numerous studies devoted to the relationship between the financial success of a business and its responsibility haven’t provided decisive results about the nature of the relationship between these indicators, which makes entrepreneurs even more skeptical. However, with economic globalization, large enterprises are forced to take into consideration the interests of their stakeholders, which provokes discussions about the advantages of corporate behavior aimed at accumulating strategic power of corporations as a bringer of economic and social development to different regions of the world. In general, introduction of this practice amid a transitional economy improves the quality of corporate management. However, the study shows that sometimes the best practice may be adopted by force, without dramatically changing the value orientation of business owners and, thus, as soon as the external influence subsides, they lose their importance. The existing situation in Russia can be seen in this light, where a social world has emerged after property redistribution, and the corporate sector has started to adopt global practices of corporate governance, complying with the requirements of external markets and other parties.

As applied to Russian practice, the project focused on issues of the institutionalization of the notion of corporate social responsibility in business and political environments, as well as singling out the most important factors of the decision-making context in the area of corporate responsibility in the corporate sector. 

Based on the results of the research, we have described some ways for Russian companies to assimilate the most advanced modern practices in the area of CSR policy formation and their interaction with influential groups (stakeholders). In this case, corporate social responsibility, understood as a rational response of a company to the system of contradictory expectations of the concerned parties, aimed at sustainable corporate development, may be interpreted as an element of a company’s competition strategy. The research highlights possible directions and potential areas of CSR development in Russia in terms of designing a set of advisory services as well as in terms of the potential focus of corporate management activity on CSR. In particular, we mean those tasks involved in overcoming the gap in CSR perception by top and line management and the need for CSR integration into business-processes by means of a wider application of project management.