Mirna Leko Šimić, Helena Čarapić Faculty of Economics Osijek, Croatia CORPORATE SOCIAL RESPONSIBILITY IN CROATIA: NONPROFIT ACTIVITIES FOR PROFITABLE GOALS Mirna Leko Šimić, Helena Čarapić Faculty of Economics Osijek, Croatia AIMPN 2009

GOALS: To identify CSR in Croatia: Local vs. foreign companies Product vs. service companies Level of CSR according to Caroll’s pyramid AIMPN 2009

CSR Company’s ethical behaviour Contribution to economic development Improvement of the quality of life in the community Measurement of CSR: standards (ISO, SRG, SA...) vs. freedom of company to define its CSR AIMPN 2009

DEMAND AND SUPPLY OF CSR Customers’ demand: Visibles: products with socially responsible atributes, signals and symbols of CSR Invisibles: reputation for quality and responsibility Other stakeholders’ demand (employees, community, stockholders..): Labour policies, safety, child care, support for local activities, donations.. Need for investment (capital, labour, services, materials..) → importance of determining optimal level and scope of CSR needed (McWilliams and Siegel 1991) AIMPN 2009

CSR AND MARKETING Both focus on interaction between company and society (social marketing, “green” marketing, quality of life concept..) CSR as part of marketing strategy (Cochran 2007; McWilliams and Siegel 1991; Wu 2006) Diversification strategy Advertising Influence on price Profitability Innovativeness AIMPN 2009

CSR IN CROATIA Rather new concept (previous role and responsibility of government) Managers’ views (MAP 2006): Better overall efficiency Easier recruitment of quality work force Motivation and loyalty of work force Competitive strength Problems with CSR in Croatia: Unfocused Inconsistency in implementation Unclear how it contributes to competitiveness AIMPN 2009

CSR IN CROATIA Influencing factors: Ownership structure Leadership capacity Company size Business sector AIMPN 2009

RESEARCH Content analysis (web pages) Sample: 25 Croatian + 25 foreign companies in Croatia from the list of 500 best (Nacional 2008) Hypothesis: H1: foreign companies will pay more attention to CSR than local H2: companies producing products will be more involved with CSR than service companies H3: CSR contents in foreign companies will be placed higher in Caroll’s pyramid of CSR AIMPN 2009

RESEARCH RESULTS Who are the best 500 in Croatia? 24% do not have web site 31% are large companies (over 250 employees) 52% in manufacturing; 48% in service sector 50% have explicitly defined CSR policy on the web site → socially responsible companies: 48% are large 35% are foreign owned 55% are in manufacturing AIMPN 2009

RESEARCH RESULTS H1: rejected; over 2/3 of sample companies defined as socially responsible are Croatian owned H2: confirmed; although no significant difference H3: rejected; 96% of sample companies declare philantropic attitudes in their CSR policies, no difference between Croatian and foreign AIMPN 2009

RESEARCH RESULTS CSR contents according to Caroll’s pyramid: Philantrophic: 96% (donations, sponsorships and activities in the environment protection) Ethical: 50% (Ethical codex); significant difference between manufacturing and sevice companies (43% vs. 67%); some difference between foreign and local (52% vs. 48%) Legal: 10% (quality standards, risk prevention); significant difference between Croatian and foreign companies (16% vs. 4%); all in manufacturing Economic: 50% (HR development, technology development, CRM); signifcant difference between Croatian and foreign companies (60% vs. $0%); 80% in service sector AIMPN 2009

CONCLUSIONS Croatian companies have made significant improvement in CSR policies from last reseach Recognition of growing need for CSR and its potential to be used as a marketing tool Philantrophic activities mostly visible to stakeholders and most efficient in public image creation Need for further research: research of consumer attitudes and expectations and CSR influence on their buying behaviour AIMPN 2009

THANK YOU FOR YOUR ATTENTION! lekom@efos.hr chelena@efos.hr