The Impact of Corporate Culture on Social Responsibility

Today, pioneering enterprises integrate social entrepreneurship into their core activities by actively channeling their research-and-development capabilities in the direction of socially innovative products and services. The research indicates that social capital is an essential asset in a contemporary business world where timely information, proactive adjustment to the market changes and flexibility are the main competitiveness factors. Here we find that the attitudes to the significance of equal rights principle characterize the society and its culture. A significant consideration is the orientation of these attitudes to democratic and humanistic values.

Most organization scholars and observers recognize that organizational culture has a powerful effect on the performance and long-term effectiveness of organizations. Empirical research has produced an impressive array of findings demonstrating the importance of culture to enhancing organizational performance.

Based upon reaserch, it is generally accepted that culture defines the core values, assumptions, interpretations and approaches that characterise an organization. Competing Values Framework is extremely useful in helping to organize and interpret a wide variety of organizational phenomena. The four dominant culture types:  

1. Hierarchy

2. Market 

3. Clan 

4. Adhocracy

emerge from the framework. Most organizations develop a dominant cultural style. Those that do not have a dominant culture type either tend to be unclear about their culture, or they emphasize nearly equally the four different cultural types.

The Hierarchy Culture

Sociologist Max Weber, proposed seven characteristics that have become known as the classical attributes of bureaucracy (rules, specialization, meritocracy, hierarchy, separate ownership, impersonality, accountability). The organizational culture compatible with this form is characterized by a formalized and structured place to work. The long-term concerns of the organization are stability, predictability and efficiency. Formal rules and policies hold the organization together. Key values center on maintaining efficient, reliable, fast, smooth-flowing production.

The Market Culture

The market culture is focused on transactions with external constituencies including suppliers, customers, contractors, licensees, unions, regulators and so forth. The core values are competitiveness and productivity. Competitiveness and productivity in market organizations are achieved through a strong emphasis on external positioning and control. The basic assumptions in a market culture are that the external environment is not benign but hostile, consumers are choosy and interested in value, the organization is in the business of increasing its competitive position.

The Clan Culture

Typical characteristics of clan type firms were teamwork, employee involvement programs and corporate commitment to employee. Some basic assumptions in a clan culture are that the environment can best be managed through teamwork and employee development, customers are best thought as partners, the organization is in the business of developing a humane work environment. The clan culture type organization is held together by loyalty and tradition. The organization emphasizes the long-term benefit of individual development with high cohesion and morale being important.

The Adhocracy Culture

A major goal of an adhocracy is to foster adaptability, flexibility and creativity where uncertainty, ambiguity and/or information over-load are typical. An important challenge of these organizations is to produce innovative products and services and to adapt quickly to new opportunities. A high emphasis on individuality, risk taking and anticipating the future exists as almost everyone in an adhocracy becomes research and development and so forth.

Culture and Corporate Social Responsibility

According to some of the latest research, "social responsibility" is part of organizational culture and a value in the organizational culture environment. Development of social responsibility is a change in values orientation, whose task is shaping the attitudes, transformation of the personal position so that it matches individual and public interests.

Different organizations have framed different definitions about Corporate Social Responsibility - although there is considerable common ground between them. Today corporate leaders face a dynamic and challenging task in attempting to apply societal ethical standards to responsible business Practice. Nowadays Corporate Social Responsibility is an integral part of the business vocabulary and is regarded as a crucially important issue in management. Only the companies, that aim to save all universally accepted ethical standards of social behavior, can expect a positive attitude and support in the modern society. Moreover, helping to solve burning social and ecological problems,they get competitive advantages and ensure their successful work in future.

In the final analysis, social responsibility implies a public posture toward society's economic and human resources and a willingness to see that those resources are used for broad social ends and not simply for the narrowly circumscribed interests of private persons and firms. "The proper social responsibility of business is to tame the dragon; that is to turn a social problem into economic opportunity and economic benefit, into productive capacity, into human competence, into well-paid jobs, and into wealth" (Drucker, 1984).

In the 1990s the concept of corporate social performance stream emerged. At that time the Corporate Social Responsibility Model identified four main components: economic, legal, ethical and voluntary (discretionary). The economic aspect is concerned with the economic performance of the company; while the other three categories – legal, ethical, and discretionary – address the societal aspects of Corporate Social Responsibility, leading to the claim that there is a strong empirical evidence supporting the existence of a positive link between social and financial performance.