S USTAINABLE CREATION OF SHARED VALUES OF ENTREPRENEURSHIP IN THE CONTEXT OF SUSTAINABLE CORPORATE SOCIAL RESPONSIBILITY Ing. Lubomir Smida Prof. Ing. Peter Sakal, CSc. 2nd ICEESD Jilin City, Jilin, China October 12 – 14, 2012

2 Established in faculties: – Faculty of Civil Engineering, – Faculty of Mechanical Engineering, – Faculty of Electrical Engineering and Information Technology, 75th anniversary 75th anniversary of the establishment of the establishment –Faculty of Chemical and Food Technology, –Faculty of Architecture, –Faculty of Materials Science and Technology, –Faculty of Informatics and Information Technology.

3 Institutes: ̶Institute of Materials Science, ̶Institute of Production Technologies, ̶Institute of Production Systems and Applied Mechanics, ̶Institute of Applied Informatics, Automation and Mathematics, ̶Institute of Safety and Environmental Engineering, ̶Institute of Industrial Engineering, Management and Quality. Information DVD about the faculty about-faculty.html?page_id=2980

4 Institute of Industrial Engineering, Management and Quality  Study programmes: ̶Industrial Management, ̶Production Quality. Doc. Dusan CAPLOVIC. Organized under the auspic of Minister of Education, Science, Research and Sport of the Slovak Republic Doc. Dusan CAPLOVIC. Research activities: –research and pedagogical projects within VEGA & KEGA grant agencies, –international programmes and projects of MVTS, –internally funded projects, –contractual research and development projects funded by business and industry. Guarantee of the study programme Industrial management. Follower of the idea of sustainable development and corporate social responsibility. Prof. Ing. Peter Sakal, CSc.

This paper was supported by the Slovak Research and Development Agency under the contract No. LPP : “Concept HCS model 3E vs. Concept Corporate Social Responsibility (CSR).” The paper is also a part of submitted KEGA project No. 037STU-4/2012 “Implementation of the subject “Sustainable Corporate Social Responsibility” into the study programme Industrial management in the second degree at MTF STU Trnava”. 5

6 Main objective of presentation: Main objective of presentation: –presentation of the basis and model of sustainable creation of shared values. Partial objectives of presentation: Partial objectives of presentation: –presentation of sustainable corporate social responsibility, –presentation of amoeba system within the project KEGA, “Implementation of the subject “Sustainable Corporate Social Responsibility” into the study programme Industrial management in the second degree at MTF STU Trnava”.

CONTENTS INTRODUCTION 1.SUSTAINABLE DEVELOPMENT 1.1. Corporate Social Responsibility 1.2. Creating Shared Values 1.3.Sustainable Corporate Social Responsibility 2.THE AMOEBA SYSTEM 2.1. Sustainable creation of shared values by the amoeba system SUMMARY 7

INTRODUCTION Sustainable society index (2010) – Criteria: Preparation for the future: 8 Post-war crisis,Financial crisis, Raw material crisis,... Food crisis, Human thinking crisis The need of a system that supports long-term development.

Beginning - mid-20th century 1968 – The Club of Rome 1987 – Brundtland report 1992 – Rio declaration 2002 – Johannesbur g summit 2005 – Millenium ecosystem assesment 2012 – Rio – „The Future We Want“ document Aimed at creating and maintaining a balance between the individual components of the Earth. "Development that meets the needs of the present without compromising the ability of future generations to meet their own needs.„ ISO 26000: "Development that meets the needs of the present without compromising the ability of future generations to meet their own needs.„ 1. SUSTAINABLE DEVELOPMENT 9 Social, economic and environmental objectives are interdependent and mutually reinforcing.

10 1. SUSTAINABLE DEVELOPMENT Growth of world population World energy consumption Sustainable society index Happy planet index

1. SUSTAINABLE DEVELOPMENT OF ENTREPRENEURSHIP 11 70% of chief executives and 49% of Boards are engaged in corporate sustainability strategy. Representatives acknowledge that the implementation of sustainable development will depend on the active engagement of both, the public and the private sector. Representatives support national regulatory and policy frameworks that enable business and industry to advance SD initiatives, taking into account the importance of corporate social responsibility. Representatives call on the private sector to engage in responsible enterprise practices, such as those promoted by the United Nations Global Compact.

1.1. Corporate Social Responsibility Gradually have exapanded from individuals to national and global level. Pioneers - Owen, Bata, Carnegie, Bowen. Europe 2020 Europe 2020 Strategy Europe smart, sustainable and inclusive economy delivering high levels of employment, productivity and social cohesion.Europe 2020 Enterprise 2020 Strategy Enterprise address the European and global challenges which are increasingly bringing into question our current patterns of living, working, learning, communicating, consuming and sharing resources.Enterprise 2020 Enterprise 2020 A renewed EU strategy for Corporate Social Responsibility A renewed EU strategy for Corporate Social Responsibility – CSR: A renewed EU strategy for Corporate Social Responsibility A renewed EU strategy for Corporate Social Responsibility “The responsibility of enterprises for their impacts on society”. 12

The age of greed The age of philantropy The age of marketing The age of management The age of responsibility 1.1. Corporate Social Responsibility 13 Wayne Visser – Corporate Sustainability and Responsibility Economic sustainability requires financial responsibility. Human sustainability requires labour responsibility. Social sustainability requires community responsibility. Environmental sustainability requires moral responsibility. content/uploads/2012/04/chapter_wvisser_age_responsibility.pdf Enterprises in spite of worldwide efforts of organizations to improve the quality of life of mankind came to CSR only as to marginal or non-economic concept that is not included in the core of entrepreneurship. SUSTAINABILITY RESPONSIBILITY

1.2. Creating Shared Values In response to the slow development of CSR. Based on previously overlooked opportunities for: – designing customer needs, products and markets, – the new definition of productivity in the value chain and – enabling the development of local clusters. 14 Michael Porter and Mark Kramer s/Harvard_Buiness_Review_Shared_Value.pdf CSRCSV Added value Financial support of socially responsible activities Economic and at the same time societal benefits from the main activities Manifestation Philanthropic activities, care for the environment, corporate citizenship Cooperation in the development of shared values Application As a voluntary autonomic response to requests from outside independent from effort to increase business performance Integral part of the implementation of enterprise strategy, in direct connection with the fulfilment of financial goals AgendaDefined by external standards and requires separate reporting, prepared by established organizational unit It is part of the specific measures contributing to the implementation of business plans by standard departments

1.3. Sustainable Corporate Social Responsiblity 15 Sustainable corporate social responsibility is based on the idea of enterprise oriented to economic development aimed at promoting social and environmental development. Social innovation means new ideas, business models, products and services resolving existing sustainable challenges, such as demographic change, human rights violations, financial crisis, environmental degradation, and poverty.

1.3. Sustainable Corporate Social Responsiblity "The system of interconnected activities performed by the entrepreneur long-term, independently and on own responsibility with participation of stakeholders, able to self-management and participating on created sustainable added value and serving to promote social and environmental development in order to create a suitable local environment for long-term development of sustainable corporate social responsibility and in line with global aspirations of mankind to maintain a balance between all elements of the global ecosystem.„ Implementation to the practice is a systematic and long-term process. Implementation to the practice is a systematic and long-term process. 16

2. THE AMOEBA SYSTEM A metaphor on comparison of independent units to individual cells. Dr. Kazuo Inamori as Kyoto Ceramic Co., Ltd. Practical organizational expression in the system of Kyocera Corporation, founded in 1959 by Dr. Kazuo Inamori as Kyoto Ceramic Co., Ltd. Each amoeba provides own strategic management, system of profit, cost accounting and personnel management. 17 Division and disintegration of amoebas is managed according to the level of production and value added on member per hour, for example: –At low production and high added value, the amoeba system is divided into smaller units. –The high production and high added value, the amoeba system maintains. –The high production and low value-added amoeba system reduces the number of members, radically reorganized and the lack of improvement is dissolved.

2. THE AMOEBA SYSTEM 18 " Management has been based on the Kyocera Philosophy, with "What is the right thing to do as a human being" as the decision-making criterion. The advantage of the amoeba system in terms of CSR lies in creating work teams, amoebas, which carry out various activities in the value chain. It is therefore the creation of internal amoebas, but also external, those participate in the enterprise development, while increasing their quality of life.

2.1. Sustainable creation of shared values 19 The elements of the system are: – Internal stock. It consists of employees of the enterprise. – External stock. It consists of stakeholders other than employees. – Production. The process of compiling amoebas from internal (1) and external stock (2). – Interconnection. Amoebas build market relations (3). – Disintegration. The break-up of amoebas, which do not create added value. Employees return to stock, or leave the enterprise (4), (5).

20 Partly applied within the project KEGA “Implementation of the subject “Sustainable Corporate Social Responsibility” at MTF STU Trnava Sustainable creation of shared values

21 Development of SCSR requires: – development of cooperation with the enterprise stakeholders, – according to CSV, involvment of external subjects in the value chain, – long-term focus, – creation of internal and external working teams, amoebas, that should increase dynamics of SCSR develpment and simultanously local community, – creation of external stock that is center of the dynamic competition, – understanding that GDP is not suitable indicator of Human Happiness. SUMMARY ision2050-FullReport_Final.pdf

REFERENCES 1.ISO 26000: 2010, Guidance on social responsibility. 2.United Nations: The future we want. Information on ny.un.org/doc/UNDOC/GEN/N12/381/64/PDF/N pdf?OpenElem enthttp://daccess-dds- ny.un.org/doc/UNDOC/GEN/N12/381/64/PDF/N pdf?OpenElem ent 3.Z. Pitra: Jak zachranit prednosti kapitalistickeho systemu? Information on E. Thomasova: Sietova struktura zlozena z ameb. Information on: M.E. Porter, M.R. Kramer: How to Fix Capitalism? Creating Shared Value. In: Hardvard Business Review, January-February 2011, p R. Adler, T. Hiromoto: AMOEBA MANAGEMENT: LESSONS FROM KYOCERA ON HOW TO PROMOTE ORGANIZATION GROWTH, PROFITABILITY, INTEGRATION, AND COORDINATED ACTION. Information on:

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REFERENCES 34. lex.europa.eu/LexUriServ/LexUriServ.do?uri=COM:2011:0681:FIN:EN:PDFhttp://eur- lex.europa.eu/LexUriServ/LexUriServ.do?uri=COM:2011:0681:FIN:EN:PDF content/uploads/2012/04/chapter_wvisser_age_responsibility.pdfhttp:// content/uploads/2012/04/chapter_wvisser_age_responsibility.pdf 38. w_Shared_Value.pdfhttp:// w_Shared_Value.pdf FullReport_Final.pdfhttp:// FullReport_Final.pdf 26

Ing. Lubomir Smida Slovak University of Technology Faculty of Materials Science and Technology Institute of Industrial Engineering, Management and Quality Paulinska Trnava SLOVAKIA Prof. Ing. Peter Sakal, CSc. Slovak University of Technology Faculty of Materials Science and Technology Institute of Industrial Engineering, Management and Quality Paulinska Trnava SLOVAKIA 27

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