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BUSINESS INDICATORS FOR MONITORING PERFORMANCE OF ENGINEERING COMPANIES FOLLOWING THE APPROACH OF CORPORATE SOCIAL RESPONSIBILITY This paper was prepared by: Veronika Kaiserova Peter Sakal Gabriela Hrdinova Apatity, December 2011

 is defined as top level of managing the companies  is responsible for success or failure of enterprise on the market  measure and evaluate the performance of enterprise as a whole, influence the efficiency of company  express the mission, vision and direction of enterprise for future success Strategic management of companies 3/21 of topic: Business indicators for monitoring performance of engineering companies following the approach of corporate social responsibility Apatity, December 2011 STRATEGIC MANAGEMENT OF COMPANIES (1/2)

 properly defined strategy provide with the competitive advantage at the market  to define best strategy of enterprise help more business tools, e.g. BCG or GE matrix and market analysis  is supporting also by the IT systems - using the BSC is implementation of strategy more effective  from recently times needs to be significantly oriented to CORPORATE SOCIAL RESPONSIBILITY and SUSTAINABLE DEVELOPMENT STRATEGIC MANAGEMENT OF COMPANIES (2/2) Strategic management of companies 4/21 of topic: Business indicators for monitoring performance of engineering companies following the approach of corporate social responsibility Apatity, December 2011

Can be characterized as:  a tool for strategic business management how to define its market position  tool for monitoring global efficiency of company  put together combination of financial and other/non financial indicators  to create BSC in high quality take a long time and requires continuously improvement  reason for implementing the BSC model within the enterprise is to achieve competitive market advantage  can be supported by IT systems – for easily creating and managing 1 Balanced Score Card 5/21 of topic: Business indicators for monitoring performance of engineering companies following the approach of corporate social responsibility Apatity, December BALANCED SCORE CARD (1/2) Principle of creating the BCS model is to define and evaluate 4 business perspectives: FINANCIAL, CUSTOMERS, INTERNAL PROCESSES AND KNOWLEDGE/GROWTH of respective enterprise.

1BALANCED SCORE CARD (2/2)  Business Process Perspective - refers to internal business processes. Metrics based on this perspective allow the managers to know how well their business is running, and whether its products and services conform to customer requirements  The Customer Perspective - recent management philosophy has shown an increasing realization of the importance of customer focus and customer satisfaction in any business  Learning & Growth Perspective - includes employee training and corporate cultural attitudes related to both individual and corporate self-improvement  Financial Perspective - monitor and measure standard financial indicators that provide with the view of the financial health of company 1 Balanced Score Card 6/21 of topic: Business indicators for monitoring performance of engineering companies following the approach of corporate social responsibility Apatity, December 2011

 was as the forerunner of complex system indicators within CSR initiative and it is a pattern of recource use, that aims to meet human needs while preserving the environment so that these needs can be met not only in the present, but also for generations to come 2SUSTAINABLE DEVELOPMENT (1/6)  sustainable development ties together concern for the carrying capacity of natural systems with the social challenges facing humanity  the field of sustainable development can be conceptually broken into three constituent parts: environmental, economic and social sustainability. 2 Sustainable development 7/21 of topic: Business indicators for monitoring performance of engineering companies following the approach of corporate social responsibility Apatity, December 2011

2SUSTAINABLE DEVELOPMENT (2/6) ENVIRONMENTAL sustainability is the process of making sure current processes of interaction with the environment are pursued with the idea of keeping the environment as pristine as naturally possible based on ideal - seeking behavior. An "unsustainable situation" occurs when natural capital (the sum total of nature's resources) is used up faster than it can be replenished. Sustainability requires that human activity only uses nature's resources at a rate at which they can be replenished naturally. 2 Sustainable development 8/21 of topic: Business indicators for monitoring performance of engineering companies following the approach of corporate social responsibility Apatity, December 2011

2SUSTAINABLE DEVELOPMENT (3/6) SOCIAL sustainability encompasses human rights, labor rights, and corporate governance. In common with environmental sustainability, social sustainability is the idea that future generations should have the same or greater access to social resources as the current generation ("inter- generational equity"), while there should also be equal access to social resources within the current generation ("intra-generational equity"). Social resources include ideas as broad as other cultures and basic human rights. Also we can speak of Sustainable Human Development that can be seen as development that promotes the capabilities of present people without compromising capabilities of future generations 2 Sustainable development 9/21 of topic: Business indicators for monitoring performance of engineering companies following the approach of corporate social responsibility Apatity, December 2011

2SUSTAINABLE DEVELOPMENT (4/6) ECONOMIC sustainability is the term used to identify various strategies that make it possible to utilize available resources to best advantage. The idea is to promote usage of those resources that is both efficient and responsible, and likely to provide long-tem benefits. In the case of a business operation, economic sustainability calls for using resources so that the business continues to function over a number of years, while consistently returning a profit. In most scenarios, the measure of economic sustainability is presented in monetary terms. The worth of assets and resources in financial figures is common, as is identifying the amount of return generated by the efficient use of those resources. 2 Sustainable development 10/21 of topic: Business indicators for monitoring performance of engineering companies following the approach of corporate social responsibility Apatity, December 2011

2SUSTAINABLE DEVELOPMENT (5/6) World Business Council for Sustainable Development - 10 messages by which to operate: 1. Business is good for sustainable development and sustainable development is good for business. 2. Business cannot succeed in societies that fail. 3. Poverty is a key enemy to stable societies. 4. Access to markets for all supports sustainable development. 5. Good governance is needed to make business a part of the solution. 6. Business has to earn its licence to operate, innovate and grow. 7. Innovation and technology development are crucial to sustainable development. 8. Eco-efficiency – doing more with less - is at the core of the business case for sustainable development. 9. Ecosystems in balance – a prerequisite for business. 10. Cooperation beats confrontation. More see at: 2 Sustainable development 11/21 of topic: Business indicators for monitoring performance of engineering companies following the approach of corporate social responsibility Apatity, December 2011

2SUSTAINABLE DEVELOPMENT (6/6) How to achieve the sustainable development in corporates environment?  TO DEFINE NEW BUSINESS STRATEGY – facing the sustainable aspects in each area (social, environment and economic)  CHANGE THE INTERNAL COMPANY CULTURE AND COMMUNICATION  RESPECT PEOPLE AND DEVELOP THEM – take into account individualities and personal interests of people  DEFINE THE ETHICAL PRINCIPLES and set the professional behaviours  SUPPORT THE INDIVIDUAL APPROACH of each employee toward their duties  KEEP FINDING OUT THE WAYS HOW TO CONTINOUSLY IMPROVE the business processes, technologies and decreasing impact to the external environment 2 Sustainable development 12/21 of topic: Business indicators for monitoring performance of engineering companies following the approach of corporate social responsibility Apatity, December 2011

Throught the CSR initiative TEXT ESTE DOPLNIM 3CORPORATE SOCIAL RESPONSIBILITY (1/3) 3 Corporate social responsibility 13/21 of topic: Business indicators for monitoring performance of engineering companies following the approach of corporate social responsibility Apatity, December 2011

CSR description + pic. TEXT ESTE DOPLNIM 3CORPORATE SOCIAL RESPONSIBILITY (2/3) 3 Corporate social responsibility 14/21 of topic: Business indicators for monitoring performance of engineering companies following the approach of corporate social responsibility Apatity, December 2011

CSR description + pic. TEXT ESTE DOPLNIM 3CORPORATE SOCIAL RESPONSIBILITY (3/3) 3 Corporate social responsibility 15/21 of topic: Business indicators for monitoring performance of engineering companies following the approach of corporate social responsibility Apatity, December 2011

the CSR 4INDICATORS FOLLOWING THE CSR (1/3) Fig: CSR indicators in the enterprise’s conditions /example (1/2) 4 Indicators following the CSR 16/21 of topic: Business indicators for monitoring performance of engineering companies following the approach of corporate social responsibility Apatity, December 2011

4INDICATORS FOLLOWING THE CSR (2/3) Fig: CSR indicators in the enterprise’s conditions /example (2/2) 4 Indicators following the CSR 17/21 of topic: Business indicators for monitoring performance of engineering companies following the approach of corporate social responsibility Apatity, December 2011

4INDICATORS FOLLOWING THE CSR (3/3) CSR aspects and indicators within implementation should be:  individually adjusted based on internal conditions of each company  exactly and limiting defined to be measurable a assessable  communicated toward all related parties  permanently maintaining and improved  time considered and changed by the external local conditions 4 Indicators following the CSR 18/21 of topic: Business indicators for monitoring performance of engineering companies following the approach of corporate social responsibility Apatity, December 2011

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This contribution was supported by the Slovak Research and Development Agency under the contract No. LPP :,,Koncept HCS modelu 3E vs. koncept Corporate Social Responsibility(CSR)’’. This paper also deals with our practices in the field of SD and describes submitted KEGA project called “Sustainable corporate social responsibility”.

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