«RUSSIA`S INTEGRATION INTO THE WORLD ECONOMY: THE NEW PARADIGMS OF THE ECONOMIC CULTURE ИНТЕГРАЦИЯ РОССИИ В МИРОВУЮ ЭКОНОМИКУ: НОВЫЕ ПАРАДИГМЫ ЭКОНОМИЧЕСКОЙ КУЛЬТУРЫ ...»
Federal State Autonomous Educational Institution of
Higher Professional Education
«Ural Federal University
named after the first President of Russia B.N.Yeltsin»
INTO THE WORLD ECONOMY:
THE NEW PARADIGMS OF THE ECONOMIC CULTURE
ИНТЕГРАЦИЯ РОССИИ В МИРОВУЮ ЭКОНОМИКУ:
ЭКОНОМИЧЕСКОЙ КУЛЬТУРЫProceedings of V International Scientific Conference Part 3 December 1-3, 2011 Yekaterinburg UrFU УДК 339.9(470) ББК 65.9(2Рос) И И 73 Russia`s integration into the world economy: the new paradigms of the economic culture: Proceedings of the V International Scientific Conference. Yekaterinburg: UrFU, 2011. P. 3. 216p.
The book contains the proceedings of the fifth international scientific conference, organized by the International Business Department, UrFU. The subject of the conference is connected with actual world economic problems and prospects, also with formation of new integration groups and the evolution of leaders of the world economy, new paradigms of corporate values and social responsibility of actors of the world economy. The proceedings are devoted to the memory of the founder of the department professor Leonid E. Strovsky.
The proceedings of the international scientific conference are intended for academics, managers in the field of International Management and Economics, students of economic specialization, and for other specialists.
Professor Dmitry L. Strovsky Dr. (Political Science) Associate Professor Zhanna S. Belyaeva, PhD (editor-in-chief) Engineer Maria V. Shirokshina © UrFU, © Authors,
THE PRIVATIZATION OF TURKISH ELECTRONIC MEDIA:HISTORY AND ‘TODAY’S STORY’
RUSSIA ON THE WORLD MAP OF CORPORATE SOCIALRESPONSIBILITY
Zhanna S. Belyaeva, Alberto G. Canen
HOW SOCIALLY RESPONSIBLE IS BUSINESS IN
GLOBAL MANAGER AND MODERN CHALLENGES:WHAT WEAPON TO CHOOSE?
THE ADVANTAGE OF SMALL SIZE AND COMMON SENSE:SLOVENIA’S TRANSITION
CULTURE-BOUND MODELS OF CORPORATE SOCIALRESPONSIBILITY
Hubert Drouvot, Cludia Magalhes Drouvot, Preston Martin Perluss
A COHERENT AGRO-ENERGY POLICY TO FOSTER SOCIAL
INCLUSION FOR PEASANT FAMILIES: THE ROLE OF
PETROBRAS ON THE JOO CMARA AND CEAR-MIRIM SITES(STATE OF RIO GRANDE DO NORTE, BRASIL)
Hubert Drouvot, Cludia Magalhes Drouvot, Preston Martin Perluss
A SOCIAL INCLUSION POLICY FOR SMALLHOLDER FAMILY
FARMERS: A CASE STUDY IN BRAZIL’S SUSTAINABLE
PRODUCTION OF PALM OIL WITHIN THE FRAMEWORK OFREFORESTATION ON DEGRADED LANDS IN AMAZONIA................. Talia Einhorn
ECONOMIC INTEGRATION IN THE GLOBAL ARENA –
THE SIGNIFICANCE AND CONTENTS OFTHE NECESSARY RULE OF LAW
Alexander P. Frech CSR AND THE PURSUE OF SELF INTEREST
FROM CRISIS MANAGEMENT TO CORPORATE SOCIALRESPONSIBILITY: THE CASE STUDY OF EHI
George Isaias, Ruediger Kaufmann
SOCIAL ENTREPRENEURSHIP: A NEW PARADIGM THAT CANHELP CYPRUS TO ADDRESS ITS CHALLENGES
RUSSIA ACCESSION TO WTO AND ITS INFLUENCE ONTRANSITION OF RUSSIAN LEGAL SYSTEM
Cecilia Mark-Herbert, Julia Rotter, Ashkan Pakseresht CORPORATE RESPONSIBILITY – CREATING SHARED VALUES........ Matjaz Mulej, Simona arotar iek, Anita Hrast, Zdenka enko, Vojko Potoan
ISO 26000 ON SOCIAL RESPONSIBILITY AGAINST NEOLIBERALECONOMICS
Israel D. Nebenzahl
THE ROLE OF NATIONAL IMAGE IN THE GLOBAL ECONOMY:THE CASE OF RUSSIA
Marina V. Pusanova, Alexander N. Nepp
USING THE PORTFOLIO MODELS IN A MARK OF EFFICIENCYOF BANK’S INVESTMENT STRATEGY
COMMUNICATING AND MESSAGING ABOUT RUSSIA ABROAD..Polina Zalikhovskaya, Alexander Nepp
THE APPLICATION OF SCORE SYSTEM AS AN INSTRUMENT OFOPTIMISATION THE BANK’S LOAN PORTFOLIO
Nikiforova Daria, Elena D. Frolova
FACTORS OF TRANSFORMING BRIC INTO THE WORLDDOMINATING ECONOMIC SYSTEM…………………………………….
RUSSIA IN THE GLOBAL ECONOMY: NEWan ordinary event in the largest university of our region the Ural Federal University. The conference itself different branches of modern domestic economy, financial business and private entrepreneurship. This is evidenced by the increasing number of participants of the fifth conference, by a variety of professional interests, realized in the presented scientific articles.
It is pleasant to realize that conference is international not for the first time.
This time it has got together representatives of 25 countries. In my opinion, this is a remarkable result of scientific and human cooperation. I think both of these points are particularly important for the implementation of a stable, durable foundation for further cooperation.
Ministry of International and External Economic Relations of Sverdlovsk region has taken an active part in arrangement of the previous conferences. I am convinced that such a meeting, a full exchange of views on issues of economic culture increases not only the scientific potential but also make university specialists more qualified. It is also important that representatives of business take part in this as in all previous conferences held by the Department. It is a merger of interests of education system and business that is essential for building the prospects of development of our economy.
I am sure that the interest to the issues discussed during this conference, will only increase.I hope that the tradition of holding these conferences will be continued in the walls of the Ural Federal University. There are all opportunities for this.
I wish the participants of the conference interesting and fruitful discussion.
Minister of International and Foreign Economic Relations In 2011 the conference is held in memory of L.E. Strovsky. I’m pleased to see that this scientific school is continuing to develop. This conference is one of practical steps to internationalization of education in Ural Federal University and to increasing information transparency in world economy. It is through the dialogue we can increase the level of social responsibility and outline general perspectives that await us in the future.
I wish the conference productive cooperation and new scientific projects, aimed at improving the economic culture of Russia.
Wishes for productive discussions!
INSTEAD OF PREFACEThe conferences organized in Ural Federal University in 2007-2010 by the founder of the International Business department – professor, Dr. Leonid Strovsky, helped to define some key trends of the economic culture evolution in Russia and its place in the world economy.
At present time 10 volumes of proceedings are already published. It allows us to get a feedback on actuality and prospects of chosen topic in national and foreign science. The participants of the developed scientific network have highlighted key players of the world economic culture: governments, corporations, scientific and educational subjects and, accordingly, stakeholders: representatives of different cultures, scientific schools and business in the world economy.
Under the supervision of Professor Leonid Strovsky the conference became interdisciplinary, comprising a wide range of experts in international business and cross-cultural expertise.
Since economic culture of the world economy players is being transformed according to overall sustainable development strategy, cross-cultural background and socio-economic conditions, then there is a growing search for the integrated system of co-development of the international community to balance global interests of all stakeholders.
In 2011 several important aspects of Russia’s integration into the world economy appeared, thus we have invited scientists to discuss the change of global leaders in terms of economic culture. The challenges of the XXI century create conditions for the evolution of paradigms of the economic culture.
The main objective of the conference was always a development of cooperation between Russian and foreign companies, universities and municipalities on the basis of defining their needs and finding ways of solving the problems in economic and business environment. It is assumed that social role of a University can be realized also in this way. Thus representatives of diplomatic missions and consulates of France, Germany, Czech Republic, Denmark, Sweden, Ireland and other countries of the EU, Brazil, China and India, that participated in our conferences in 2007-2010, pointed positive influence of such communication not only for local scientific communities but for partnerships on the international level.
In general the guests of the conference comprise a number of science, business and state representatives from 38 countries. The students of the department usually take the most active part in preparation of the conference. We are certain that organizational and methodical work of students and post-graduates of the International business department is a serious training for the whole range of subjects which are taught theoretically in University.
Today’s conference is devoted to the memory of the founder of the department professor Leonid E. Strovsky. The conference is not the only project, the professor was up to, which continuous its active development. We are aware that other research projects on the topic mentioned higher will be realised, in particular creation of scientific networks of corporate responsibility and cross-cultural management.
I wish the participants of the conference not only a productive discussion but also success in formation of economic culture in Russia with mobile and socially active citizens.
RIWEC Coordinator, Head of the OC
THE PRIVATIZATION OF TURKISH ELECTRONIC MEDIA:
HISTORY AND ‘TODAY’S STORY’
ПРИВАТИЗАЦИЯ ТУРЕЦКИХ ЭЛЕКТРОННЫХ СРЕДСТВ МАССОВОЙ
ИСТОРИЯ И СОВРЕМЕННОЕ СОСТОЯНИЕIntroduction The Turkish Media has its roots in the last decades of the Ottoman times. The first Turkish newspaper was published in 1831, Takvim-i Vakayi, by the Ottoman Government to promote the Westernization thoughts of the Ottomans, domestically and internationally. As Kocabaolu (1997, p. 36) argued that, “the first press in Turkey has not emerged as a consequence of civil economic and social needs. On the contrary, it was established as a government voice and its initial emergence has set the way for the Turkish media, until the end of the 20th century, as the media in Turkey has always been related to the Government, whatever the critical content it might have against the Government.” Television in Turkey: A General Overview Television is the primary source of entertainment for the majority of Turkish families. Turkey topped the list for the world viewing rate of 298 minutes (almost five hours) average daily. Research has shown that for 97% of Turkish citizens, television is also their main source for news. This is the result of the television revolution experienced in Turkey after the early 1990s, when the state monopoly of television broadcasting ended and private broadcasters began to emerge. Within just a few years, 70 million Turkish viewers were able to select from among the five government-sponsored channels as well as 14 nationwide, 15 regional and 202 local privately owned television channels. Within the last decade cable channel distribution networks have become available in 20 major cities with 44 to 60 channels, while the satellite platform offers nearly 100 channels. With the formation in April 1994 of RTUK (Higher Council of Radio and Television), administrative, financial and technical minimum standards and broadcast areas were established, along with new arrangements regarding hours and content. ATV, Show TV and Star along with Kanal D are the nation’s most popular television channels. These four television channels captivate 60% of the national audience every night and enjoy 72% of TV advertising income. In spite of certain restrictions under current law with respect to Veysel Batmaz Prof. Dr. Faculty of Communications, Istanbul University, Turkey foreign investment and partnership, in October 1999 DYH and AOL Time Warner launched CNN-Turk, the first joint venture in the Turkish broadcasting industry.
Last year Dream TV, a 24-hour music channel, was launched and quickly proved itself popular with younger audiences, an important step in a country such as Turkey where nearly 50% of the population is below 25 years of age. Turkey currently has 365 national radio stations as well as hundreds of local radio stations.
1964 was a turning point for Turkish radio and television broadcasting. The Turkish Radio and Television Corporation (TRT), which was established on this date, brought a public and institutional identity to radio broadcasting, which had a long history, and television which had started test broadcasting. The transfer by the state of broadcasting to an authorized and responsible unit made it possible to follow the developments closely in this field. In the 1990s, the conditions were created for private radio and television broadcasting, both in an objective and subjective sense.
In this period, besides TRT, many private radio stations and television channels actually started broadcasting. The obstacles for private enterprise were removed with an amendment made in Article 133 of the Constitution on 10 July 1993. With the regulations made after the amendment to the Constitution, many national, regional and local radio stations and television channels applied to the Supreme Board of Radio and Television which was established with the law. Turkey acquired between 1990-1998 a diversity and richness rarely encountered with the great advances displayed in this field. Hence, on the 1998 report of OECD on communications, it is announced that Turkey is the record-holder on development in radio and TV broadcasts. While the average of increase in radio-TV sector in OECD was 3. percent in the 1995-1997 period, in Turkey the development of this sector in this twoyear period was 24.3 percent.
A dual structure appeared in Turkey with the entrance into the broadcasting world of the private radio and television organizations in the 1990s: TRT, which was established in 1964, and the private television channels, which started to broadcast later. TRT remained in a separate position in this field, both from the aspect of its perception of broadcasting and from its legal structure. TRT Law No. 2954, is a document that clarifies the different position of TRT. TRT is a broadcasting institution providing public service and has constitutional autonomy.
TRT which acts with a perception of public service, runs several television channels. Main TRT Channels are: TRT1, which addresses the general public and has a perception of diverse broadcasting; TRT2, which makes broadcasts of culture and art; and TRT3, which has a "youth" channel identity with different types of music programs and sports programs. Furthermore, TRT3 is a bridge between the members of Parliament and citizens, with its live broadcasts from the Turkish Grand National Assembly at specific hours of the day. TRT4 is an educational channel which includes the open university and open high school lessons and its broadcasts support the national education policy. TRT-INT and TRT-AVRASYA with its broadcasts abroad has the function of a bridge between Europe and Asia. Furthermore, the GAPTV broadcasts in the provinces included in scope of the development project in the Southeastern Anatolia Region. (Up to date list is below.) TRT, through radio channels, also applies its perception of "thematic channels" on television to its radio stations. Radio 1, broadcasting at MW 1017, provides services with a perception of general and diverse broadcasts. Radio 3 is primarily a classical music station but also broadcasts polyphonic music, jazz, and western pop.
It also presents news service to the foreigners in the country with its regular news broadcasts in English, French and German.
TRT FM, which emphasizes Turkish classical music, Turkish folk music and popular music addresses its audience at FM 91.4. Besides these channels, there are also regional radio stations within the structure of TRT, such as Voice of Turkey Radio, which broadcasts in 26 languages with the aim of forming a positive public opinion in the world about Turkey, Tourism Radio, which broadcasts in 5 languages aimed at foreign tourists in the country and GAP-Diyarbakr Radio, aimed at provinces included in the Southeast Anatolia Project (GAP).
Private Radio Stations and Television Channels. There are 16 private television channels broadcasting nationally. ATV, Kanal D, Show TV, Star TV, NTV and TGRT are among the most popular of the private television channels. Star1, the first private television channel in Turkey, started broadcasting from abroad in 1990 and later, after a change in management, it continued its broadcasts with the name of Interstar. Show TV started broadcasting in 1992 and initially attracted interest with its short news programs. ATV which is the television channel of the Sabah Newspaper Group, started broadcasting in 1993. Kanal D of the Doan Group and TGRT of the Ihlas Group also started broadcasting in the same year. Furthermore, the music channels "Kral TV", "Number One TV" and "Best TV", the economy channel "Kanal E" and the news channels "NTV" and "CNN-Turk" are among the leading private television channels with a perception of thematic broadcasting.
A total of 244 private TV networks, of which 15 are regional and 229 local, have applied to the Supreme Council of Radio and Television (RTUK) for licenses in the country.
Studies made on the subject of the ratios of private radio station listeners, show that Best FM, Sper FM, Show Radio, Radio D, Alem FM, Power FM and Number One FM are among the most important national radio stations. A significant portion of the private radio stations emphasize pop music in their broadcasts. There are also radio stations among these which broadcast only foreign pop music. A total of 1, radio stations, of which 36 broadcasting at national, 108 at regional and 1,036 at local scales, are active in the country. Private radio stations and television channels finance themselves. Their only income sources are advertisements.
The Supreme Council of Radio and Television was established by Article 8 of the "Law on the Establishment and Broadcasting of Radio Stations and Television Channels" No. 3984, which went into effect on 20 April 1994, defines the functions of the Supreme Council of Radio and Television (RTUK), which has legal autonomy. According to this definition, RTUK has been given the important authority to make national and regional frequency planning and to give permission and licenses to entrepreneurs who apply to them. Furthermore, it has the authority to supervise the broadcasting of radio stations and television channels within the framework of the broadcasting principles stated in the law. To conduct activities and applications observing the principles of the European Cross-border Television Agreement is also among the functions of RTUK. According to the law, RTUK evaluates the impressions of public opinion on the subject of broadcasts and provides the necessary relations on these subjects with the related organizations.
The policy of supervision of RTUK is shaped by the decrees envisaged by Law No. 3984. RTUK warns private radio stations and television channels which do not fulfill their obligations, exceed the conditions of the permission and which make broadcasts in violation of the broadcasting principles and fundamentals. If the violation is repeated, then RTUK has the authority to close the broadcasting temporarily or cancel the permission, depending on the seriousness of the violation.
The shared opinion of all the sectors in media is the need for making radical changes in Law No. 3984.
The Laws Organizing the Radio and Television Institutions. The most important document organizing radio and television institutions is the Constitution.
Audio-visual broadcasting in Turkey, organized by this basic document, is regulated by the "Law on the Establishment and Broad- casting of Radio Stations and Television Channels" No. 3984, TRT Law No. 2954, and the European Cross-border Television Agreement.
Furthermore, the Advertising Regulations which specify the activities of the RTUK are among important regulations. In these regulations, the related articles of the Constitution and Article 133 have been considered within a hierarchical structuring. In particular, the European Cross-border Television Agreement was taken into consideration when Law No. 3984 was prepared.
Law No. 3984 has certain restrictions on the subject of providing a balanced distribution in broadcasts. According to these, the private radio stations and television channels have to include education and culture programs in certain proportions in their broadcasts.
Excluding the regulations, besides the productions of foreign origin, domestic productions on television also hold an important place. Especially in recent years, news, competitions, discussions, panel discussion programs and Turkish serials attract great interest. It is observed that television channels display a tendency in this direction. Entertainment and sports programs also have an important place in broadcasting. A significant portion of radio stations emphasize the broadcasting of popular music. However, radio stations following a thematic perception shape their broadcasts depending on their themes.
Turkish Media’s paternalist attitudes at the emergence became more manipulative after many years when private television entered in 1990. But in the meanwhile, the Turkish media has always been seen by the owners and the managers as an enterprise not to run media business but an agent to run other businesses.
The manipulative tones became more vocal and apparent when Ahmet Ozal, with the capital help of Uzan Family established the first private (and pirate) Turkish television, Magic Box, in 1990. Ironically, the media entrepreneur Ahmet Ozal’s father, Turgut Ozal was the President of the Turkish Republic, then. With this direct backing from the top of the Turkish State, Uzan-Ozal TV started to support ANAP, the party in power led by Turgut Ozal in the 1991 election. Surprisingly enough for the media and the public but not for the writer of this paper, the rival party won the power and Suleyman Demirel, the ex-prime minister who had severe political fights with Turgut zal, became the new Prime Minister.
When we come to 1999, the media world of Turkey is one in a kind, very different from all other countries of the World, even different than Italian media environment. There were (and still there are) 16 private nationally broadcasting television station; 50 satellite foreign channels, 1200 national, local radio stations;
250 independent local television stations. There might be nothing wrong to have so many TV channels in a liberal market economy where the old scarce and natural resource peculiarity of air frequencies have long been abandoned via new digital and satellite technologies, but the main problem of the electronic media in Turkey is legislation. Without any inclination leaving the historical paternalist attitude, the RTUK (Radio Television Higher Council) has not allocated frequencies to non-of the stations as to this date (April 2005). They were all constitutionally lawful but legislatively unlawful. 3 national TV stations (Kanal 7; Meltem; STV) have Islamic inclinations; one has pro-fascist ideology (Kanal A); the rest (12) have center right or left but all secular in content. In the press, there were 16 nationally distributed newspapers. The local newspapers are around 800 circulated in 1200 provinces.
These numbers show how anomic, heterogeneous and widespread the Turkish media was in 1999.
When we see the other side of the coin; this widespread electronic media in terms of geographic coverage is a hallucination in terms of effective penetration.
There were only three media holdings who own the mainstream media: Uzan Group (Star-TV—secular, center right), Dogan Group (Hurriyet-Milliyet-Kanal D—secular, allegedly social democrat and center left), Bilgin Group (Sabah-ATV—secular, center right). These three groups hold 70 % of the whole media in Turkey. Ihlas Group (TGRT TV and Trkiye Newspaper—pro Islamic and nationalist) and Aksoy (Show TV--secular) groups add another 10 % of the media which sums up in holdings, 80 % of the Turkish media is owned. The others are smaller in size in terms of coverage and accessibility. Although these media groups are non-partisans at face;
they would support one or two political parties in every election and between the elections very bluntly.
Three Historical Episodes of the Private TV Enterprises in TURKEY 1. Beginners- Istanbul Technical University had pioneered the first closed circuit TV broadcasting in 1956. State Channel TRT-Turkish Radio and Television had been established in 1964. In 1966, German Hamburg Studios helped TRT to launch the first on-the-air broadcasting in Istanbul. In 1989-90, private pirate channels started broadcasting from outside of the Turkish boundaries.
In 1989, the son of the neo-liberalist Prime Minister of Turkey, Mr.Ahmet Ozal and an entrepreneur Mr. Cem Uzan had invested to establish a pirate TV Channel and the followers streamed into the market without any legislature and legal right. Then, in the Constitution of Turkey, there had been a ban on private TV-RD channels, having only the State Channel TRT, had the right to broadcast.
2. Constitutional revision: Legal private broadcasting- After a very short period of time, in 1993, an amendment of Constitution took place and paved the way to privet broadcasting. In 1994, RTUK- Radio and Television Higher Council had been decreed and all private pirates broadcasting had been legalized.
The ownership of the broadcasting companies had been limited to 20 % share.
In 2002 these restrictions had been abandoned. In 2003, The Constitutional Court had cancelled out the lift of restrictions. In 2005, another amendment on the restriction on foreign ownership of the broadcasting had been lifted and now 25% of the shares of a broadcasting company can belong to a foreign investor. This is also before the Constitutional Court and no final decision had been made so far.
3. Foreign Investment- After ten years, now, Turkey is at the beginning of the foreign investment period in broadcasting. Some of the main broadcaster companies had been sold to German companies and Murdoch; Dogan Media had been sold to AxelSpringer Germany. TGRT to Murdoch’s FOX TV. (Colakoglu, 2006) Terrestrial Broadcasting TRT, the State Broadcasting Company has 5 different national channels 16 national private TV channels, Four of them share the 70% of the total ratings Kanal-D, ATV, Star, Show TV 2 national channels had abandoned their broadcasting because of bankruptcy – BRT and HBB 15 regional channels, 220 local channels Two Cable Channels are local 12 foreign channels are Cable Channels Satellite TV-Digital Platforms 90 Channels are broadcasting from Turk-Sat satellite: DigiTurk has channels; most of them are duplicates of terrestrial broadcasting; D-Smart has channels.
15 State Channels on-the-air and Cable: TRT 1 TRT HABER TRT 3 TRT 4 TRT TRK TRT Gap TRT Avaz TRT ocuk TRT 6 TRT Anadolu TRT OKUL TRT Belgesel TRT HD TRT Mzik TRT Arapa Uydu Frekanslar 16 National Private Channels on-the-air and Cable: Kanal D, ATV, Show TV, Star, TGRT, Cine 5, Kanal 6, Kanal 7, NTV, CNN Turk, Flash TV, STV, Kral TV, Mesaj TV, (HBB, BRT), (The data belongs 2009) 3 Regional on Cable: CNBCe, Olay TV, EyTV 7 TV Channels broadcasting all national on Cable: TV8, Number One TV, FBTV(Bravo), Haber Turk, DreamTV, Power Turk, Fashion TV, KanalTurk, 12 Foreign Channels:
International: CNN, Eurosport; American: History, National Geographic, MTV, Discovery British: BBC Prime, BBC World French: TV5 Italian: Raiuno Spanish: TVE Azerbaijan: AZTV, Russian: Channel 1 TV The Future of Broadcasting in Turkey on the Path of Privatization:
Technological innovations make access to media easier; MMDS, Digital Terrestrial, Broadband Cable have been launched. Podcasting, Internet TV and Video streaming sites, like Daily Motion and You Tube created online and real time media available to most of the Internet users. On the other hand, traditional electronic media market penetration is being harder. The only way to overcome this is to have cartels and capital concentration which is a little bit limited by law. Editorial and management are getting separated. When media are seen as a market tool rather than public service, this separation is inevitable.
Before explaining what happened in the media (i.e. broadcasting and telecommunications) on the path of privatization, a brief outline of the history of general privatization calls for attention.
The history of privatization goes to the beginnings of the neo-liberal economy politics of global capitalism back to 1980’s. As professor E.Yeldan succinctly explores:
“Turkey launched its comprehensive structural adjustment reform program in January, 1980 under the guidance and proviso of the IMF and the IBRD. The major elements of the programme included the standard policy package often hailed as the “Washington consensus”: commodity trade liberalization, financial deregulation, and fiscal and monetary restraint. It also entailed a detailed programme of structural transformations addressing privatization of public assets; new labor laws mainly seeking to create a “flexible” labor market where labor’s right to organize in labor unions and to engage in collective bargaining are effectively curtailed. As for the rural economy, it further entailed elimination of producer price subsidies in agriculture, and replacing them with a targeted direct income transfer programme.
All these shifts, needless to mention, created major repercussions in the commodity and labor markets, leading to significant sources of new surplus transfer mechanisms with the state playing an active role. Privatization of public assets is regarded as one of the key mechanisms of such surplus transfer. Privatization programme was invigorated in Turkey starting 1986. Originally the privatization ideology was based on “economic efficiency” arguments based on the myth that private sector decisions are based on optimization calculus, whereas the public sector is inherently corrupt and its policies lead to waste. It was announced that initially some of the major public enterprises would be restructured to improve their financial performance, and then they would be on the sale list at “attractive” prices. Over the course of time, however, the main objective of privatization had shifted towards mainly revenue generation and financing of the public debt. Thus, a clear shift of focus has occurred away from efficiency arguments of the so-called technologically backward state enterprises, towards revenue generation from sale of the most technologically advanced and profitable enterprises.” In the media, the process of globalization is a path paver so that general consumerism for selling goods and financial commodities throughout the world would be enabled. According to Aidan White, the General Secretary of International Federation of Journalists (IFJ):
The industry observer and writer Ben Bagdikian there were, in 1983, some media corporations that dominated most of every mass medium and the biggest media merger in history was, at that time, a mere $340 million transaction. Five years later this list of 50 companies had reduced to 29, and by 1990 the list had further shrunk to 23. By 1997, the biggest rms numbered just 10, all of them with global reach and all of them bringing together a range of text, lm, music and television resources. Some, such as Rupert Murdoch’s News Corporation, were pioneers in driving forward the global media market, but others have been catching up fast. The scale of change is far greater than ever imagined. The 2000 corporation created by the fusion of AOL and Time Warner, creating the biggest global media player was worth $350 billion dollars – more than 1,000 times larger than the biggest deal of 1983.”
MAJOR MULTINATIONALS HAVING INVESTMENT IN TURKEY
3M CARREFOUR GILETTE MCKINSEY PROCTER & GAMBLE
ABB HOLDING CHEVRON GLAXOSMITHKLINE MERCEDES – BENZ RENAULT
ABN AMRO CITIBANK GOODYEAR MERCK SHARP DOHME REUTERS
AC NIELSEN ZET CNN HENKEL MERLONI ROCHE
ACCENTURE COCA COLA HEWLETT PACKARD METRO AG SERVIER
AEG COLGATE PALMOLIVE HSBC MICROSOFT SIEMENS
ALCATEL CREDIT LYONNAIS HYUNDAI COPRORATION MOBIL OIL SOCIETE GENERALE
ALLIANZ CREDIT AGRICOLE IBM NESTLE SODEXHO
AMERICAN EXPRESS CROWN CORK INTERGEN NIKE SONY EURASIA
ARIA (TIM) DANONE ITOCHU CORP. NISSHO IWAI TETRA PAK
AVENTIS PHARMA DEUTSCHE BANK JOHNSON & JOHNSON NORTEL NETWORKS THAMES WATER
AXA DHL JP MORGAN CHASE NOVARTIS THE BANK OF TOKYOMITSUBISHI
BANCA DI ROMA DUPONT JTI ORACLE THE SHELL COMPANY
BARCLAYS BANK ERICSSON LAFARGE PARS MCCANN TNT
BASF FIAT LEVIS PEPSI COLA TOTAL
BAT FMC LILLY PERFETTI TOYOTA
BOSCH FORD LOCKHEED – MARTIN PFIZER UNILEVER
BP FOSTER WHEELER MAN PHILIP MORRIS VOLKSWAGEN
BRIDGESTONE FOUR SEASONS MARSA KRAFT JACOBS PHILIPS XEROX
BRISTOL MYERS FRITO LAY MCDONALDS PIRELLI YAZAKI
CARGILL GENERAL ELECTRICThis was the beginning. Turkey did not lose much time to accommodate her legislation to adopt the global settings. As prominent media analyst professor E.
“Turkey, as a country in the heart of Eastern Europe, and as a developing candidate of the EU, has long been an attractive market for the foreign investors.
Seemingly, the Turkish media market is also one of the most important sectors having great potential for growth. First, US media companies have shown their interest in the market, and some of them are already directly or indirectly operating in Turkey. It is an expectation that the numbers of the foreign companies and their investment will increase in the near future.
After the 1980s, media ownership structure in Turkey changed radically.
Traditional ownership structure was replaced by one of new ownership. Among them, Aydin Dogan (Head of Dogan Media Group), who is the most powerful media baron in today’s Turkey, controls a big portion of the media sector in the country.
Until April 2001, two media giants – The Sabah Group and the Dogan Group – dominated 80% of the whole sector.
Consequently, it comes as no surprise that global media and entertainment companies see a lot of value in Turkey.... Groups like Burda, Rizzoli, and Hearst have come to Turkey as partners of major magazine groups such as 1 Numara Yayincilik and the Dogan Group years ago. Despite the fact that none of the terrestrial broadcasters have legal licenses, global players have started investing in Turkey during the last decade. Time Warner was in Turkey as partner of CNN Turk from the beginning. NBC had licensed CNBC to Dogus Group for the creation of CNBC-e, News Corp. of the USA last year bought the controlling shares of TGRT TV and launched it as Fox TV. “CanWest” of Canada has bought three important radio stations from the privatization authority, and finally, Axel Springer of Germany has bought 25% of DTV (Dogan TV) which controls Kanal D, Star TV and CNN Turk....
Today, global development in media is still on its way in Turkey. Technology is changing. Main TV broadcasters are going to come under the same company to complete the digital transformation. A new company with the name of Anten AS is being incorporated to build and operate digital terrestrial transmitters. Anten AS aims to build transmitters in the 13 largest cities with an investment of 30 million Euros within the next year to carry 30 digital channels that will reach nearly 50% of Turkey’s population. By the end of 2010, Anten AS plans to reach all the towns with a population over 10,000.” Telecommunications and Electronic Media Privatization Traditional telephone The PTT was split in May 1995 into two independent entities, namely Turk Telekom and the postal service. The privatization of Turk Telekom, the incumbent telecommunications operator of Turkey, has been a major focus not only of the liberalization of the Turkish telecommunications sector but also of the overall economic reform in the country. Turk Telekom is providing a variety of telecommunications services from basic voice telephony (PSTN) to several value added services like mobile telephony, Cable TV, satellite services, Internet, data and payphone services.
The Council of Ministers Decree issued in April 2003 stipulates that preparations for the privatization and public offering should be undertaken simultaneously for the minimum 51% (where foreign ownership is limited to 45%) of the company through block sale. The valuation and privatization strategy of the company will be announced by the Council of Ministers by the end of October 2003.
Cellular telephone The GSM cellular telephone appeared in Turkey at the end of 1993. It was born private, but is highly regulated.
Cable television The cable networks in Turkey were developed the Turkish PTT, and are today fully owned by Turk Telekom.
Radio and television Until 1989, TRT, the Turkish Radio and Television commission, enjoyed monopoly over Radio and TV. A private network by the name of Star 1 took advantage of a gap in the law to start broadcasting via satellite in an absolutely legal manner. Slowly, with the complicity of some local municipalities, and in order to reach the citizens who had no satellite dish, Star 1 started broadcasting through land transmitter stations. It is worth noting that the network was owned by politically powerful people. Other TV networks and Radio stations followed. The studios were often located abroad, and transmitted through satellite to relay stations stations in Turkey. The networks were absolutely unregulated, and thus could broadcast their free political opinions as well as late-night erotic programs without being subject to any censorship.
Realizing that the TRT was on the downhill, the government issued a decree prohibiting all non-TRT broadcasts. Many argued that the private Radio and TV stations were more legal than the decree itself, and the state's act was treated as a "democracy shame". A few months later, a new government was formed which allowed private Radio and TV stations to resume their operation. Tremendous losses had been incurred by the firms owning the networks, and so only the strong ones could start anew. The new government pressured the parliament to vote a law that eliminated state monopoly over Radio and TV, and set the ground for a regulation process.
Media Companies Market Share on the Basis of Company for National Channels (%) (Source: RTUK, TRT) The emerging telecommunications services market The Turkish Ministry of Communications is planning to give licenses for value added services such as intelligent networks, cable-TV, pay phones, paging systems, data networks, etc. GSM cellular-type revenue sharing agreements previously signed with two foreign consortia will be converted into licensing agreements.
(Source: http://www.armory.com/~turkiye/it/telepage.html) Commercial Media Marketplace and Media Imperialism Under the Disguise of Globalism Reinvented The end results of this commercializing and privatization of the electronic media have resulted in cultural and ideological consequences. Nation state as the antagonistic target of globalization have been at sate by the global and American media coglamaretes resulting crises in domestic and local identity crises. The country have been portioned as East (rural, backwards and feudal) and West (urban, developed and capitalist). So it created cultural identity problems: As H. Sahin and A.
Aksoy have summarized it comprehensively:
Besides playing a crucial role in fragmenting the unitary national identity of Turkey, global media technologies have also been instrumental in making Turkey one of the biggest transnational broadcasters in the world.
The satellite-based broadcasting ventures were all commercial, thus introducing a whole new set of issues and parameters. The advertising market nearly doubled in size between 1991 and 1992, responding to the increasing competition in the broadcasting market. The prices of foreign broadcast materials doubled and broadcasting “stars” changed jobs frequently, lured to new channels by astronomical fees and salaries. However, the fate of the newly born commercial broadcasting marketplace remained uncertain. In November 1992, there were six commercial and six state channels on the air, competing vigorously for advertising revenue. If we take into account that the total advertising revenue received by television stations was on the order of $400 million in 1992, then the sustainability of commercial television in Turkey becomes rather questionable. The highest earning station, Show TV, was expected to reach a $120 million mark in annual revenues in 1992. In many cases, the financial pressures resulted in cost-reduction schemes that, just as everywhere else, led to importing of cheaper American and Latin American series. Foreign series accounted for more than half the program slots in a week, and all the top 10 mostwatched programs were quiz shows and comedies, with the exception of two news magazine programs. Predictably, the logic of the market began to lead to a new kind of homogenization in programming.
The role of the global media in the recasting of Turkish national identity was not confined to foreign programming and iconoclastic domestic programs. The global media were also instrumental in reshaping the format of programs produced in Turkey. The national media channels, whether private or public, in their attempt to embrace difference and to give voice to the particular, increasingly imitated global media channels. This resemblance went all the way—down to small details like the way women presenters dressed or the way cameras zoomed in. The global media exercised a hegemonic power by being accepted as the norm.
On the whole, global media channels have had both a homogenizing and a particularizing effect on the Turkish audiences. Global media have played a key role, on the one hand, in breaking up the unitary national culture by feeding the so-called “small words” of real Turkey into the larger world of “imagined” Turkey. On the other hand, global media have homogenized difference and particularity by connecting the “small worlds” across frontiers and creating what B. Anderson (1983) calls “imagined communities”. Turkish workers in Germany can tune into the TRT programs and become part of Turkish culture, or the sports lovers can share their passion over the Eurosport channel. It has been suggested that the Turkish guest workers were the pioneering users of satellite dishes in Germany. As small worlds connect, they become master narratives, different from one another only in terms of their focus. In this new cultural landscape a new type of identity—what Schlesinger (1992) calls “identity by choice” —is fashioned, where each particular identity establish global links that transcend territorial boundaries to form new types of communities based around shared values, such as consumption, ethnicity, religion, or gender. In this new landscape, individuals choose their own identities and the communities to which they want to belong. Karagul (1992) argues that with greater transnational communication the identities of individuals will not be determined by the nations of which they are citizens but by economic, political, or cultural communities. Appadurai (1990) points out that these communities are able to contest and sometimes even subvert the “imagined worlds” (p. 297) of the official mind.
Choosing identities through the global media, however, is not a simple matter.
Once the taboo bashing is over, the audience may find that there are after all very few choices left to be made. This is especially true in the case of Turkey where the fast commercialization of the broadcasting industry is happening in the totally delegalized environment of cutthroat competition. In the meantime, however, the walls come tumbling down.”
ConclusionTurkey has experienced and survived out of heavy pressures from the outside world after the neo-liberal economy politics of globalization after the 1980’s. As a country, dated back to the early 18th century, she has a long history of Westernization. The concentration of capital and annexation with the West in the Cold War, have brought about Turkey’s fate indulged in capitalism in the wake of globalization. She had no choice what so ever as being a periphery of the capitalist centers.
This process has been initiated first by media privatization and carried out telecommunications commercialization and ended up with industrial and service sector privatization.
But, besides its some advantages, the national identity, national state and local cultures are withering away because of the burdens of global privatization and public service media is disappearing.
Today, the economy seems strong, thanks to the financial backups by the central powers of capitalism such as USA and EU, but political system is very fragile and can be attributed to the content of Turkish media as pumped ideological and cultural messages of the same central powers.
Bibliography Esra Arsan, http://www.bridgemag.com/ magazine/index.php?option=com 2. content&task=view&id= 3. Erinc Yeldan, “Assessing the Privatization Experience In Turkey:
Implementation, Politics and Performance Results” Report Submitted to Economic Policy Institute, Washington DC, June, 4. Haluk Sahin and Asu Aksoy, “Global Media and Cultural Identity in Turkey,” Journal of Communication, Spring 5. Hifzi Topuz, Turk Basin Tarihi, 6. Orhan Kololu, Osmanl’dan Gunumuze Turkiyede Basin, 7. Nazli Ilicak, Yazarlar ve Kavgalari, 8. Nuri Colakoglu, Turk Medyasi, PPS Presentation, 9. Tulay Keskin, The First Years of the Ottoman Revolutionary Press, 10. Uygur Kocabasoglu, Turk Basini, (NOTE: Date of Revision: 09.11.2011. First Draft. Not for citation. Some of the materials used in this article are taken verbatim from various sources in the public domain Internet. Since they have no specified authors, the names had not been cited.)
RUSSIA ON THE WORLD MAP OF CORPORATE SOCIAL
РОССИЯ НА МИРОВОЙ КАРТЕ КОРПОРАТИВНОЙ
СОЦИАЛЬНОЙ ОТВЕТСТВЕННОСТИФинансовый и экономический кризис сделал видимой степень готовности к изменениям в различных типах организаций во всем мире и России. Наблюдается трансформация социально-экономических программ, осуществляемых государственным и корпоративным сектором; не все они работают на благо населению, особенно в странах с быстроразвивающимися рынками. В то же время, за двадцать лет рыночной экономики в России, например, определенно построили новую социально-экономическую систему, но изменились ли управленческие методы кардинальным образом? В исследовании обобщены тенденции корпоративного развития России в контексте социальной ответственности бизнеса и социально-экономической трансформации. Предпринята попытка определения места России на мировой карте социальной ответственности бизнеса.
Key words: corporate development, corporate social responsibility, managerial leadership The financial and economic crisis made visible the level of readiness to changes in the different types of organizations throughout the world and Russia. The variation of social and economic programmes implemented by governmental and corporate sectors is widely seen; not all of them work positive for population, especially in the emerging markets countries. In the same time twenty years of the market economics in Russia, for instance, have definitely built a new social and economic system, but whether we have changed fundamentally in the management techniques? The research generalizes some trends of the corporate development in Russia in the context of social responsibility and socio-economic transformation. The authour attempts to define the Russia’s place on the world map of corporate social responsibility.
Under conditions of world economy transformation, globalisation and gradual creation of a new model of global management the old values and the ideals based on the profit approach give way to priority socially important projects, and, hence, only socially-responsible companies can be successful participants of the world economy.
Increase of the importance of non-material factors of economic growth forces the companies to improve innovations and to introduce new technological achievements which put together the human, intellectual, social capital. All mentioned above sets the economic imperatives of socialisation of business.
The specifics of the capitalist development of western countries had been always a continuous and ongoing process that ended up with a difficult but balanced system of a regulation of mutual relations of the business and the society power in the sphere of social and economic development of the countries. Nowadays in different countries participation of business in the social problem-solving is strictly regulated in frames of the commercial, tax, labour, ecological legislation or carried out independently under the influence of specially established stimulus and privileges.
This process in Russia stands at the initial stages of the development and occurs in the conditions of state dominant positions, extremely poor development of institutions of the civil society and oligarchic development of business. And rules of institutional cooperation, a role of different parties and a level of their participation in the social development only start to be formed.
The term «corporate development» itself has appeared in the Russian academic sources in the middle 90s`, questions of efficiency of the given approach and corresponding tools are still under deep discussion in the local business environment.
Social responsibility of the Russian business takes sources in aimless philanthropy of 90s`, and in the western understanding has started its development only in 2001According to some sources cultures, structures, and routines operating at multiple levels of jurisdiction become the carriers through which institutions impact firms. Institutional theorists thus argue that corporate governance system will be determined largely by prevailing institutionalized norms in the organizational field and society.
The other theoretical perspective on corporate governance is a sociological perspective that builds on resource dependence theory — specifically, the influence of social networks on board formation and composition. Fundamental to this perspective is the notion that a firm's actions are embedded in social networks, where embeddedness refers to the extent that actions are informed, influenced, and enabled by the network of accumulated stable and preferential social relations. The final stakeholder theory of corporate governance system adopts a pluralistic approach to organisations. Stakeholders have much more than just a passing interest in an organisation’s outcomes. They also actively attempt to affect an organisation’s behaviours in order to influence its direction so that it consistently meets the needs and priorities.
Comparative analysis of some approaches regarding maintenance, borders, display the forms of social responsibility of business allows to allocate five basic approaches: liberal, traditional, social, strategic and integrated (see tab. 1).
In sense of the freedom of economic culture of stakeholders the situation has cyclic character. For example, position in corporate governance area in Russia up to 2004 correlates with a situation in America in the fifties. Thus, general meeting of the shareholders was purposely discharged from the company’s activity, board of directors played passive role and the governance was duty of the head of the company.
Approaches to the essence of the corporate social responsibility Liberal T.Levitt (1958) The denial of economic benefits of CSR, Traditional Business-environment Non-systematic support Strategic K.Davis (1960) CSR – is an element of strategy, economic R.W.Ackerman (1973) impact, which serves to solve social, Integrated R.E.Freeman (1984) Orientation to the external and internal T.Donaldson, L.Preston environment of the corporation, counts on Considering level of social and economic transformations in Russia 2000- was the correct moment to begin an institutionalization of corporate development and social responsibility in Russia. Now the leading part in working out the standards of corporate governance system is played by regulating authorities that have begun an extensive educational campaign - introduction of economic culture of corporate governance system by means of specially developed principles of appropriate practice in Russia. After the last economic crisis in 2009-2010 the government power shared a big pie of the corporate regulations and management. So to say the Russian companies have again invisible, but tough hand.
Still in Russia the central player in general and corporate governance is a manager, who is inside of the business and builds a determined control system of business . His commitments and overall objectives are to realize the potential of the enterprise. The main criterion of the efficiency is ROI. At the same time the manager builds relationships with the owner, proceeding from his interests, where the major motive is the growth of the business market value and return on the invested capital. The ROI is the basic criterion of an overall performance of business for the owner. The classic agency conflict of interests is the important element of the national business environment.
The organizational culture of a corporation of the technocratic type and the dominating style of management were based on decision-making control. A traditional approach considers an economic organization the "closed" system, its purposes and commitment are considered agreed and stable, as well as other conditions of activity, stable enough for a long time, and the sense of duty and an effective control have crucial importance in management techniques.
One of lines of the social and economic transformation in frames of corporate development in Russia is socially-responsible approach of business to corporate relations without dependence from obligatory and voluntary motives. Thus, the properly chosen factors concerning the dimension of the strategic choice lead to defining portfolio of categories shared by the members of corporate governance process. Moreover, we can find out which of the actual and potential interests we should fulfill, care about and protect. Strategies also reflect corporate values. An enterprise's core values, whether clearly announced or not, influence upon the selection of strategic goals and decisions on how the enterprise will negotiate and carry out its explicit and implicit contracts with stakeholders. Finally, the strategy identifies which stakeholders are important to the enterprise’s success and why.
Stakeholders may be important because they contribute to profitability, because corporate management and the board feel a sense of social responsibility to the stakeholder group, because the corporation is legally obliged to participate in that stakeholder group. The final major element also refers to the research of social relations - cultural context, which introduces to the model of corporate governance a process concerning shared values and possibility of their adoption into the whole enterprise. Some features of corporate development of a business environment of the Russian companies are systematised in table 2.
Stages of corporate development in the context of corporate governance (CG) and social responsibility trends (CSR) Players of development corporations and a and acquisitions conti corporate governance starts to role. A lot of shadow significant influence the Anglo-American, German or Shareholders The Board of Directors Internal Stakeholders External Stakeholders One of the basic problems of sharing CSR principles at the moment is the brevity of orientation of strategy of development of the companies, their dependence on stock market. W.Buffett marks possibility of negative consequences ориентированности on short-term investors for long-term development of the company .
The basic element of social and economic transformations is an embedding of the Russian economic culture in processes of world corporate development by integration of general values into the business environment of the company. Social responsibility is shown at different levels of social and economic systems. As it is already noted above, many researchers mark necessity of stronger contribution of Board of directors to development of corporate responsibility and building the corresponding corporate culture.
The corporate culture is helpful in understanding different symbols and activities; therefore it enables the stakeholders to find the most suitable solution.
Moreover, using corporate structures, as a dimension in the description of corporate governance process can be useful in exploring values, which are required but may not exist at the time of research. Ethics control enables determining how the decisions are taken in respect with an increase of long-term value in an enterprise, and how they correspond to justice requirements regarding resource distribution.
Communication between leadership and socially responsible development of the company is the characteristic of the Russian model of social responsibility of business. High value of leadership in a control system routes in the Soviet understanding of "leader" as "the head", accordingly, leadership in realisation of corporate social responsibility can be considered as the technique of efficiency increase of the company. The strategy based on leadership demands a wide use of resources and the coordinated work of followers, which is the western characteristic of leadership.
The Corporations with leadership management type in Russia most successfully form the internal business processes, and also relations with an external business environment; for this reason they can be considered as socially responsible.
The phenomenon of leadership in a corporation and in frames of the corporate relations system is the mechanism that uses innovative approaches through potential of the "higher" degree in inventing the organizational, social and economic superiority over competitors. It is the main result of transformation of corporate social development.
Russia has a possibility to take lessons from foreign experience. So achievement of the new social contract between the state, business community and a civil society, the problem fixed in the European social model, is actual for us as well.
Certainly, each country has the features of unique development, tradition, national interests. But in the context of globalisation all members of world economy need to solve similar problems related to the interests of an individual, protection of his advantage, living conditions and work, social protection. World models of social responsibility of business form vectors of social architecture of the Russian business and the variants of its development that match to the calls of the XXIst century.
The analysis of world practice allows allocating some types of corporate social responsibility that vary depending on orientation vector of programs and state participation. In our opinion, all these features have made essential impact on formation of the Russian model of corporate responsibility. Although as well as concerning national model of corporate governance, there are still many academic disputes.
The institutional contour of built Russian model of social responsibility should consider essential types of ideological, economic, political and the public work, directed on harmonisation of balance of interests of all stakeholders. The borrowed and unique lines of the Russian model start to take a steady form. Some aspects of features of world models of social responsibility are reflected in table 3.
Comparative Characteristics of the Common Models of Social Responsibility The grouped models of corporate social responsibility in the world economy Active participation State intervenes in s The state role consists of The state is actively regulating social and relations, but the corresponding legislative sometimes leads CSR, labor relations, as well employers and trade and statutory acts, and business provides happening at the retain autonomous. requirements. Regulation family dynasties, industry, individual inclusion of social the level of an enterprise the expense of The integrated tripple approach (economic, Economic Vector Social Vector of
THE RUSSIAN MODELActive participation of the state in Compulsory character of social responsibility of the advancement of social responsibility, large companies regulation of sociolabor relations. The Essence of the social responsibility of business The private-public partnership in CSR at each group of companies it is original and The enterprises with the state participation different (both with external, and with internal provide all social infrastructures. social policy of the company).
The dynamics of the current stage of corporate development in a context of increase of corporate social responsibility gives a good possibility to the Russian business community to raise the level of economic culture and to integrate national corporations into the world map of social responsibility. It will allow generating a positive investment and corporate climate in the Russian business environment in frames of world corporate development model.
Bibliography Баффет У.Эссе об инвестициях, корпоративных финансах и управлении компаниями.М.: Альпина Бизнес Букс, Альпина Паблишерз, 2009. 272 с.
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Pfeffer J. New Directions for Organizational Theory. N. Y.: Oxford University Press, 1997.264 p.
Scott, W. R. Institutions and organizations: Foundations for organizational science. Sage Publications, Inc, 2nd ed., 2000. 277p.
HOW SOCIALLY RESPONSIBLE IS BUSINESS IN THE BRICS
К ВОПРОСУ О СОЦИАЛЬНОЙ ОТВЕТСТВЕННОСТИ БИЗНЕСА В
СТРАНАХ БРИКВ статье рассматривается теория и практика корпоративной социальной ответственности (КСО) в странах БРИКС (Бразилия, Россия, Индия, Китай, Северная Африка). В работе аргументированы проблематика повышения эффективности социальной ответственности в связи с национальными различиями. Предпринята попытка систематизации проблем КСО БРИКС. В отличие от существующих подходов к экономическому успеху стран БРИКС в исследовании предложены необходимые шаги по корректировке социальной ответственности в странах БРИКС на мировой карте КСО.
This contribution concerns the corporate social responsibility (CSR) in the ‘BRICS’ countries (Brazil, Russia, India, China, South Africa) giving a general background of them. It discusses the problems that interfere with raising the effectiveness of social responsibility in these countries with reference to their economies. It also attempts to describe their structures, arguing for the need to increase their social responsibilities. In contrast to the existent approaches to BRICS’s economic success, the research outlines the needed activities to overcome their problems, and it tries to forecast possible results of the application of the concept of CSR, suggesting the BRICS’ place in the world map of CSR.
Keywords: BRICS, CSR, International Business, World Economy 1. Introduction A socially responsible model of business is widely considered as а competitive market instrument, as a managerial tool that increases economic gains for a company operating on a given market. Large companies consider corporate social responsibility (henceforth - CSR) beyond the limits of philanthropy, sponsorship and patronage. In the advanced countries corporations use CSR as a method of overcoming the hostile relationship between business and society. This approach is widely covered in literature [1; 2; 3; 4; 5; 6]. International regulatory documents, the Zhanna S. BELYAEVA, PhD, Associate professor, Ural Federal University Alberto G. CANEN, Dr.,Professor, COPPE/Federal University of Rio de Janeiro, Department of Production Engineering set of CSR standards, requires more and more active implementation of social reporting, statistical data, drawing up ratings of sustainable development and, at last, calculation of financial and social companies` indexes. All these facts directly testify that CSR is capable of solving a wide range of problems and has the potential to become a reliable method of rising company efficiency. That is why there are quite a few research data devoted to the approach of the egoistic corporations’ usage of CSR power [7; 8]. In connection with the aforesaid, mechanisms of enhancement of the socially responsible business development model become more and more crucial.
The present research focuses on the BRICs. The BRIC Countries, Brazil, Russia, India, and China are the largest countries in the world and are already responsible for 25 % of the World GDP and 40% of the world population. A general overview of multicultural, economic and legal aspects relating to the countries that form the BRIC is provided . Allocation of the given countries in a separate group is stipulated by the fact that emerging markets face constantly growing external pressure from foreign investors, trade unions, public authorities, and nonprofit institutions. An overview is given of the CSR models  in the world economy and outlines BRIC, South Africa and also South Korea as the most developing new socially responsible business traditions. The BRIC grouping of major emerging economies - Brazil, Russia, India and China - is turning itself into the BRICS in 2011. And the new "S" - South Africa - clearly sees it as a significant foreign policy success that recognizes its economic strength and potential. South Africa's economy can be shortly described as follows: it is the only African member of the G20; GDP in 2010 was estimated at US$ 355bn; it is one of the world's largest platinum, gold and chromium producers; and her stock exchange is the 18th largest in the world .
Perhaps the biggest reason for the coining of the term was at how large these markets are, and how much of an impact they could represent in the international economy once they will be developed. Though, the crisis of 2008 made the gaps in economic development visible and Russia is falling out of BRICS according to the economic data (Table 1).
Russia is falling behind other BRIC economies in global competitiveness and growth, according to The Russia Competitiveness Report 2011, released by the World Economic Forum. The country ranked 66th out of 142 countries based on the report’s 12 pillars of competitiveness. The report noted that Russia can improve its poor ranking by reforming its institutions, improving the quality of education, stabilizing financial markets, and moving away from its focus on natural resources.
The main outcomes to be highlighted from the 2010-2011 edition are the following up two positions to 27th place, China has reinforced its position within the top 30. It is the only BRIC country to improve in the rankings this year, thus increasing the gap with the other three. China’s performance remains stable in most areas measured with the Index compared with last year, its main strengths being its large and growing market size, macroeconomic stability, and relatively sophisticated and innovative businesses.
Table 1. The Main Economic Data of the BRICS countries South Africa has moved up in the key global competitiveness index for 2011overtaking India and becoming the second-highest ranked among the BRICS group of developing countries, which includes China, Brazil, India and Russia. The index, compiled by the World Economic Forum (WEF) and released in September 2011, moved SA up four places to 50 — after a fall of nine places last year .
SA’s ranking was supported by an outstanding performance in its financial market development, strength in the accountability of private institutions and the effectiveness of its anti-monopoly policy, according to the report. Among the BRICS countries, China outperformed SA with a rating of 26. Brazil ranked 53, India 56, and Russia 66.
Although BRICS countries are geographically and ideologically apart, there are new mechanisms to integrate into the world economic culture. The desire of the BRIC companies to enter in the international market and to become worthy participants in the world economy make them search for effective mechanisms of managing CSR as a strategic part of business.
Section 2 presents an overview of the corporate development trends in BRICS, Section 3 describes the CSR model in the BRIC countries, section 4 discusses the concept of increasing social responsibilities, and section 5 outlines the main conclusions.
2. The corporate development trends It is no secret that Brazil, Russia, India, China and South Africa (BRICS) are the most attractive countries for investments, and the global attitude to these countries has been improving. According to the PricewaterhouseCoopers research, 71% of the world largest companies tops plan to do business in these countries, and The World Bank, Data Statistics (retrieved on August 21st, 2011) consider them not as cheap factories, but as new commodity markets. Still the managers admit they are cautious and warned by the instability of the markets .
The growing markets of Brazil, Russia, India and China (unlike the settled economic systems) offer big-scaled, interesting, and challenging projects. The western managers would need to be trained to get some new skills, experience and abilities to take part in those projects. Moreover, economic recession makes the emerging markets much more attractive, especially considering the possible size of corporate returns and directors` compensations . For this reason the corporate governance issues in BRICS countries raise its value and demand a special attention.
It is interesting to notice that, despite different history of institutes of corporate governance, the countries — Brazil, Russia, India and China — have much in common both in advantages, and in the infrastructure of principles of the regulation, in many respect providing their appeal to investors. But on the other hand one of deterrents of investment appeal of the corporate BRICS world would be their corporate governance risks, especially in respect to long-term investment in a share capital.
Thus, it is possible to carry out the comparative analysis of the corporate organization in the companies on the countries BRIC (Table 2).
Table 2. Corporate governance elements in BRICs countries Audit Revision committee Revision committee Audit Committee, Body (Consejo Fiscal). At (voted). Can’t incl. selected by Board.
The CSR model of the BRIC countries is now under development, but even at this stage, companies start both applying international regulatory documents and more actively introducing social reporting. Moreover, this stage is supported by the experiences of the world largest transnational corporations. Based on the fact that the CSR model of the BRIC countries is still in its early stages, detailed assessment of drawbacks and problems arising from its implementation in these countries has become critical.
Although the concepts «sustainable development» or «corporate social responsibility» are still to be included into the lexicon of many companies working in these markets, it doesn't mean that they ignore such questions as climate change, struggle against poverty or standards of labor relations.
Brazil shows most widely spread corporate social responsibility practice. For instance, 1300 companies of Brazil have formed a network «Instituto Ethos», aimed at the development of CSR in the country. The network’s overall objective is to influence social policy and corporate behavior so as to further a socially responsible market. The most known businesses in the field of CSR are cosmetic company «Natura» and the pulp-and-paper manufacturer «Aracruz».
India is distinguished by old traditions of paternalistic philanthropy. The large companies are family business, such as «Tata», and especially active in maintenance of the basic services for local communities, such as school training and public health services, to a wide circulation of CSR expert. The Indian companies with the foreign capital adhere to business traditions of the parent companies or partners. The state corporations consider CSR as the obligation to their society and an integral part of the activity of the company. Now, a weakness of business in India is the absence of a culture of comprehensible working conditions maintenance. The other trend lies in the fast business development. Thus, a rapid growth of the Indian economy over the last years promoted dizzy growth of the companies while social responsibility has been still presented by non-system philanthropy. In the meantime the society showed negative reactions to such demonstration of the business prosperity, because in fact the philanthropy did not serve the interests of stakeholders at all.
The «McKinsey» research in September 2007 testifies to a difference of priorities in development strategy realization between the western countries and emerging markets BRICS . Respondents were offered to allocate the three most important priorities of CSR for the next five years. In Table 3 ratings of priorities of five countries are shown, and also a total international estimation of each priority is presented.
Unlike the companies working in the developed markets, the companies in the BRICS countries consider CSR as a business dealing part, the tool to increase of competitiveness of the company, a possibility to enter new commodity markets, and also to strengthen mutual relations with suppliers, investors, and buyers.
A comparative analysis of the social effects and advantages of the CSR model for business in the BRIC countries was undertaken . It could be illustrated as follows on Figure 4.
Such approach reflects several factors. First of all, in Europe and the USA initiatives in the field of sustainable development often are carried out as a reply to attacks on businesses from groups of activists, but for the companies working in emerging markets the issues of their brand protection are no emergency. According to Jodie Thorpe, heading the program of emerging markets of the British consulting organization «SustainAbility», the emerging markets company does not react actively to the threats related with risk-management, but consider some of these threats more likely as possibilities. Authors of the «SustainAbility» research that they carried out together with the International financial corporation, entering into the World bank, found out that at the heart of activity of the companies in the field of a sustainable development lies creation of the added cost, instead of brand protection.
Table 3 – Comparison of CSR priorities in advanced and emerging economies working standards privacy of information developing economy Figure 4. Interrelation of Social Effects and Business Advantages sorted by For comparison of level of social responsibility in Brazil, India and China the following parameters have been chosen: 1) historical preconditions of introduction and development of social responsibility; 2) features of corporate governance; 3) risks for foreign investors; 4) the purpose of CSR; 5) the basic CSR directions; 6) the initiator of CSR development; 7) major stakeholders; 8) obstacles against following the CSR principles; 9) economic stimulus; 10) transparency maintenance; 11) the contribution to development of local communities; 12) environment protection; 13) conformity to the international CSR standards; 14) social effect; 15) influence on primary activity of the companies (benefit for business).
“The lack of a common understanding and terminology in the area of CSR has made it difficult for organizations to develop consistent strategies.”  According to the statistical data research we can clearly see that social and ecological issues are highly considered in the business flow. Social responsibility of businesses is mostly presented by philanthropy and patronage of arts that is the initial stage of CSR, which is not giving high economic benefit. While the social investment brings benefit for businesses, in many respect it also causes mistrust in a kind of absence of the wide domestic practice.
Despite the big similarity, Brazil, India, and China stand at different steps of CSR implementation. At present Brazil seems to be the leader in introduction of CSR principles. It can be caused by the thought-over policy of the government aimed at a sustainable development, and by active work of public organizations, networks «Instituto Ethos», introduction of the national standard of reporting NBR 16001, carrying out of social audit, and application of social share index ISE. At the same time the Chinese CSR institutes are more and more active.
In the BRICS countries along with «the advanced» socially responsible group of companies there is a negatively minded group of businessmen and local residents.
On the one hand, many companies in India and China consider CSR as the unnecessary western concept, on the other hand – as a trading barrier.
CSR is not only the tool of the social problems management in the region. The companies in the BRICS countries consider CSR as a businesses’ dealing’s part, the tool to increase of competitiveness of the company, possibility to enter new markets, and also to strengthen mutual relations with suppliers, investors, and buyers. The pragmatism and economic benefit expectation force the companies to put huge investments into social and ecological spheres.
The aforesaid outlines the system’s gaps in its way to sustainable future. We have grouped some problems to manage the way of CSR development in the region.
Ten groups of problems, as shown in Figure 5, refer to:
• The historical preconditions [18; 19; 20; 21; 22; 23] of the formation and of the development of the CSR model in the analyzed countries;
• The analysis of the stakeholders` core concerns and their perceptions of Generalization of problems that interfere with raising the effectiveness of socially responsible enterprises in these countries unveils the internal interrelation between them. This demonstrated interconnection determines the necessity of their complex solving.
Absence of complete perception of corporate social responsibility Figure 5 – The system of problems that interfere with raising the effectiveness Looking at Figure 5, it is noteworthy that the institutionalization problem is predetermined by the absence of national and public institutes whose core objectives should be: realization and coordination of CSR policy of businesses’ control over performance of corporations within the limits of CSR; and consultation services for enterprises concerning the creation and the introduction of CSR in practice. The spotlight of institutional problems includes also the wide circulation of shadoweconomic relations and a weak observance of legal rules . As a result everyone loses: the government receives fewer taxes, employees experience the nonobservance of the labor legislation, and they also suffer from social vulnerability and low guarantee of stability in the workplace, organizations suffer from poor activation of employees and other partners, perhaps also strikes, riots, loss of good employees, other business partners, customers, good image etc. [25; 26].
Legal problems are caused by the underdevelopment of the national commerce, taxes, labor and ecological legislation that should establish frameworks and bases for the CSR regulation. It is exceedingly important to work out the standards in the form of laws, decisions, recommendations, codes, etc. The state should establish “an interaction corridor” for business and society in which government together with public structures create the necessary conditions for participation of businesses in the life of the society. In certain cases, the legislation is inconsistent with such a view inasmuch as it allows enterprises to find loopholes and use regulatory norms at their own discretion.
First of all, the underdevelopment of partner relations between businesses, government, and nongovernmental/noncommercial organizations results from the absence of effective interaction practices, as well as the planning of joint actions and development of joint projects. The absences of trust relative to noncommercial organizations and funds, as well as low transparency of the latter don’t allow the increase of cooperation in social and ecological spheres. There upon, Brazil is sharply different from other BRICs. Its business associations and non-governmental organizations play an active role in the advancement of the CSR, not only within the country, but also outside, participating in social and ecological programs in Latin America, in the United Nations Global Compact, in the Equator Principles, and even heading together with Sweden in the working out of ISO 26000 [27; 28].
Image problems result from negative attitudes of a society to businesses and of mistrust relative to their achievements. Image problems also trigger business ethics violation. Rapid economic growth of the BRICs during the last years ensured meteoric growth of the companies, while social and economic problems became aggravated and indeed have increased in various strata of its societies. Thus, the implementation of wide social programs can provoke growth of dissatisfaction among the poor, strain social pressure, and cause social conflicts. In India, for example, companies face additional pressure from negatively minded nongovernmental organizations, which are aimed at carrying out large-scale protest campaigns against large corporations.
The low capitalization of the majority of the companies, and the absence of resources for large-scale social programs, are considered as the first financial problems. A second problem refers to the shortage of social investments from the state funds. In order to popularize socially responsible behavior the latter should be stimulated by the state in the form of tax privileges and projects of challenge funding of socially significant programs. Otherwise, proclamation of high volumes of social investments activates heightened interest of the tax authorities resulting in the requirement of more thorough inspection of companies` performance . Besides, promulgation of social programs is frequently perceived by the state and the public as an indirect evidence of a company gaining super-profits that can cause increase in tax loading, toughening of tax discipline, and intensification of control over company’s operations.
It is possible to call social problems the general condition of a civil society, mistrust of a society to business, and public inactivity. In India, China and Russia, paternalistic relations of employers and employees prevail over the partnering ones.
Social problems first of all result from underdevelopment of a civil society, and also originate in both the unwillingness and the inability of a society to participate in managerial processes .
A group of the so called “Organizational problems” include the lack of a proper management system for social activities, a low degree of integration of CSR in developing a long-term strategy for the company and the absence of the uniform coordinated policy. In many respects it is the result of an absence of simple, clear and accessible methodological approaches to the organization and realization of social activities in the companies based on certain rules and requirements. CSR should be considered as a tool allowing the company to manage risks. Organizational problems, first of all, are a reason for the low degree of introduction of corporate governance principles. As a rule, in many companies the statement of the mission and values, carrying out socially responsible policies not always find an embodiment in changes in the organizational structure, strategic targets and in real actions. As a result there seems to be no structural divisions and employees responsible for the CSR policy realization.
Concerning methodological problems of the research, they are linked to the existence of “double standards” in estimation methods of social responsibility.