© EBBF – European Bahá’í Business Forum CSR CORPORATE SOCIAL RESPONSABILITY CSR CORPORATE SOCIAL RESPONSABILITY

© EBBF – European Bahá’í Business Forum Until recently two economic models existed and were the source of inspiration in the business world: marxism and capitalism. The former disintegrated with the fall of Berlin wall, the latter, the only one still standing, continues to dominate the whole planet, even those countries which had grown and developed in the shade of communist ideology.

© EBBF – European Bahá’í Business Forum According to the classical model of capitalism, a corporation is defined as an enterprise whose main goal is profit

© EBBF – European Bahá’í Business Forum The goal of an enterprise is profit and the market is the means by which profit is generated.

© EBBF – European Bahá’í Business Forum The past two centuries have seen many enterprises and entrepreneurs who have adhered to this very definition and have used the market and their entrepreneurial and managerial skills to increase profit at any cost and by any means. Anyone who has studied economics knows this definition and is aware of the fact it has no exceptions. There aren’t secondary conditions which pose limits to its application. Many advantages in terms of creating wealth have come out of its use, but much damage has been done when employing it inappropriately

© EBBF – European Bahá’í Business Forum. Over the past few years, however, businessmen have opened a dialogue, which started a process of higher awareness when talking about business goals, influenced by new world phenomena such as:

© EBBF – European Bahá’í Business Forum Globalization Ever-increasing competition Extreme rapidity/speed of technological changes The change from an industry-based to a knowledge and information-based economy Demographic changes and migrations Environmental challenges Change of values Extreme gap between rich and poor

© EBBF – European Bahá’í Business Forum Acceleration of consumption of available resources Migration of millions of people Increase of poverty due also to the quick rise of the cost of living Damage to the ecosystem The inability of governments to make long term growth plans People’s unhappiness, especially among the wealthy Terrorism Lack of rules on basic human rights

© EBBF – European Bahá’í Business Forum This “broader connotation“ implies an innovative redefinition of business enterprise, which is no longer exclusively orientated toward the pursuit of profit at any cost, but encompasses the necessity of responding in a different way to the traditional market logic, such as:

© EBBF – European Bahá’í Business Forum the happiness of employees the quality of the environment the quality of products the betterment of the standard of living in the local community, revolving around the enterprise customers’ and suppliers’ satisfaction and collaboration with educational institutions improvement in applying values, etc..

© EBBF – European Bahá’í Business Forum SO WE HAVE TO REDIFINE THE ROLE AND THE PURPOSE OF A CORPORATION

© EBBF – European Bahá’í Business Forum CSR Just over the past twenty years, the business world has attempted to change its economic activities in efforts to answer a question the most conscientious businessmen often ask themselves: “What is the role of corporations in the social field? Can corporations help social development in their context?” “What contribution can corporations give to the development of the world?”

© EBBF – European Bahá’í Business Forum The most important role that economic efforts must play in development lies, therefore, in equipping people and institutions with the means through which they can achieve the real purpose of development: that is, laying foundations for a new social order that can cultivate the limitless potentialities latent in human consciousness The most important role that economic efforts must play in development lies, therefore, in equipping people and institutions with the means through which they can achieve the real purpose of development: that is, laying foundations for a new social order that can cultivate the limitless potentialities latent in human consciousness THE ROLE

© EBBF – European Bahá’í Business Forum csr Reflecting upon the meaning of the above quotation, we can see how, in the world, cross-disciplinary consultations are happening among economists, philosophers and social commentators who attempt to give an answer as to the possible contribution of businesses to development.

© EBBF – European Bahá’í Business Forum Therefore, a new movement of thought was born and has brought a great cultural innovation to corporations. Known as CSR (Corporate Social Responsibility), it refers to the social responsibility of business enterprises. This movement is influencing governments’ social policies, corporate financial policies, economics text books in all universities of the world and the operational world of business

© EBBF – European Bahá’í Business Forum Therefore they have understood that the only guarantee for consistent economic growth lies in the capacity of creating “wellness” in society in a broader connotation.

© EBBF – European Bahá’í Business Forum the happiness of employees the quality of the environment the quality of products the betterment of the standard of living in the local community, revolving around the enterprise customers’ and suppliers’ satisfaction and collaboration with educational institutions improvement in applying values, etc..

© EBBF – European Bahá’í Business Forum These objectives are summarized in six “key dimensions” which apply to any corporation, regardless of its nature or the field in which it operates and produces, and where it is located. These key dimensions are called “stakeholders” in an economy and are the ones for which enterprises are held responsible.

© EBBF – European Bahá’í Business Forum The following diagram synthesizes these six dimensions generally connected to the corporation.