African Journal of
Political Science and International Relations

  • Abbreviation: Afr. J. Pol. Sci. Int. Relat.
  • Language: English
  • ISSN: 1996-0832
  • DOI: 10.5897/AJPSIR
  • Start Year: 2007
  • Published Articles: 382

Full Length Research Paper

Does the social relationship matter? The corporate social responsibility

Gediminas Mačys1* and Juozas Vijeikis2
1Department of Economics, Faculty of Economics and Financial Management, Mykolas Romeris University, Vilnius, Lithuania. 2Department of Business Economics, Faculty of Economics and Financial Management, Mykolas Romeris University, Vilnius, Lithuania.
Email: [email protected]

  •  Accepted: 12 October 2010
  •  Published: 30 November 2010

Abstract

A research into the impact of social capital (SC) on economic growth was focused mainly on civil society’s social capital (SC). The SC related to the enterprises has still received little attention. On the other hand, the design, implementation and evaluation of large-scale development projects have traditionally been efficiency-driven and dominated by engineering approaches that emphasize physical outputs and costs. These approaches externalized the unmeasured economic-welfare decline and environmental damage in affected communities. As a result, many funding agencies had to withdraw their funding of major dam projects in the last decade. Consequently, major donors have made fundamental shifts away from the engineering approach to the SC approach focusing on the welfare of affected individuals and communities. The next point of this discussion is that the prevailing hostility and self-assurance of modern entrepreneurial culture can be observed. The commercial actions of the dynamically fragmented business on the global competitive edge in the broad virtual networks under the constant strong pressure of fast changing market conditions determine modern business, that is, the actions in networks and the governance of changes span beyond effective governance a strong potential of the SC. The recent crisis has clearly shown a clear lack of this factor in the modern western business, by contraries to the Asian business and economic growth, lets say in China or India, has exceeded all expectations before and during the crisis the Asian business is overwhelmingly small in corporate size and family-based, that is, a strong potential of the SC is inherent. The last point of the discussion is that the EU grant-in-aid for the spread of innovations under the clusterisation of business is ineffective. A business, especially in Eastern Europe, is really small and fragmented but overwhelmingly adverse to the partners, that is, we observe the same striking feature; a lack of social capital. These few points of discussion unquestionably denote that a strong lack of social capital really determines an unsuccessful business on the microeconomic level and a poor economic growth on the macroeconomic level. A set of four articles under common title “Does the social relationship matter?” will approach the various factors and processes shaping up the SC at enterprise and regional level and consequently altering appreciably the local business growth. The first paper aims at developing a method to break down the business investments in the form of the corporate social responsibility (CSR) investments and determining the effectiveness of these investments. According to research data the planned place of socially responsible business in Lithuania helps companies to attract and retain better employees, agree with partners, to meet high standards of CSR raised by foreign customers. At the same time it reduces the risk of environmental problems and violation of worker's rights and leads to the further rising of competitive ability and further opportunities for business development in the future that is, leading to rise of value added. The CSR investments in small companies differ from those in large companies, but some of the features for small companies become even more pressing. Companies that fail to fulfil their CSR activities may eventually be doomed to disappear from the market. The conclusions of the present analysis are quite important to Lithuania, as well as to Africa where a small family-based business predominates and is very sensible to the changes in internal and external social relationships.

 

Key words: Social capital and business governance, value added and competitiveness, perception of social responsible investments.