Challenges and Approaches for the Corporate Social Responsibility and Human Resource Management in the Financial Sector

By Andrei, Jean Vasile; Panait, Mirela et al. | Economics, Management and Financial Markets, September 2018 | Go to article overview

Challenges and Approaches for the Corporate Social Responsibility and Human Resource Management in the Financial Sector


Andrei, Jean Vasile, Panait, Mirela, Voica, Cătălin, Economics, Management and Financial Markets


1.Introduction

Issues generated by some companies with major implications on the environment, employees and business partners led to the need for the emergence of new concepts such as corporate social responsibility and corporate governance. Crystallization of these concepts has been achieved simultaneously with the development of principles that must guide the corporate activity given that their financial difficulties or even their bankruptcy has repercussions on many categories of stakeholders such as employees, customers, suppliers, the environment or public authorities. Financial scandals that rocked major transnational corporations like Enron, WorldCom, Parmalat and Goldman Sachs have shown the necessity to obey the principles of CSR and corporate governance (Asif et al., 2013; Volosevici, 2013).

Despite conflicting views about social responsibility of corporations belonging to valued economists such as Milton Friedman, the concept of CSR has been consolidated, principles of CSR have been developed worldwide under the auspices of the United Nations - Principles of the Global Compact (Matthew, 2012) and the European Union is making considerable efforts to promote socially responsible behavior among European companies (Iamandi & Constantin, 2012; Matthew, 2013; Volosevici, 2013). Milton believes that the sole responsibility of managers is to maximize company profits so that shareholders' interests are met and social issues are the responsibility of public authorities that know best the needs of society, they are empowered to do so by law. This opinion is shared by other economists who have addressed this issue after 2000, when the interest of companies for social responsibility programs is increasing (Manne, 2006; Henderson, 2002).

There are opinions, especially from NGOs, consumers or journalists, who believe that the actions of CSR undertaken are determined by economic, social, political and environmental pressures (the triggering of the financial crisis, global warming, promoting sustainable development) of vulnerabilities posed by undertaken activities (companies that pollute the environment, pharmaceutical companies have great prices on certain products and develops unethical marketing campaigns) or to enroll in the internationally manifested trend (Kim & Scullion, 2013; Crifo, Diaye, & Pekovic, 2016). Major companies in developed countries publish the Activity Report which shows the CSR activity or CSR reporting. As a result of legal regulations or stock exchange regulations, companies publish reports on exposure to environmental, social and governance risks and how to manage these risks. In this way, companies respond to the needs of portfolio investors which, in recent years have increased considerably the integration of non-fınancial information in investment decisions. Portfolio investors - individual and institutional take into account not only profitability of financial products but also the so-called ESG factors (Matei and Andrei, 2011; Matei, 2013; Panait, Voica, & Radulescu, 2014)

CSR is increasingly more a marketing strategy because CSR programs promoted by corporations lead to generating purchase intent, increased customer loyalty, improved attitude of the various parties involved in the company or reducing skepticism consumers (Sima & George, 2007; Purcărea & Purcărea, 2008). CSR has a communicating function, because undertaken these measures, the company becomes known by the business environment and consumers and potentially employees know better the values that the company promotes. Furthermore, studies demonstrate the positive impact of CSR on company's performance (Johan de Jong, 2011).

Moreover, CSR is an integral part of corporations' operational and business strategy. Companies do not have to pursue short-term profit maximization, but sustainable development is based on compliance with ESG principles in their work and in relationships with stakeholders. …

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