CORPORATE SOCIAL RESPONSIBILITY AS A FACTOR OF GLOBAL COMPETITIVENESS

Belgrade Business School, 11000 Belgrade, Kraljice Marije 73, Republic of Serbia E-mail: sbogetic@yahoo.com University of Novi Sad, Technical faculty ”Mihajlo Pupin” in Zrenjanin, 23000 Zrenjanin, ure akovi a bb, Republic of Serbia University of Belgrade, Institute of Chemistry, Technology and Metallurgy Centre for Microelectronic Technology and Mono-crystals, 11000 Belgrade, Njegoševa 12, Republic of Serbia


INTRODUCTION
Global market conditions have contributed to national economies being more flexible than before.As a result of national economies flexibility, companies are facing more complex management processes.Companies' competitiveness is the key goal in the new business practice.
Business environment is constantly changing.Changes are heavily influenced by technological advancement and the process of global market unification.These changes are permanent and business organisations have to make behaviour models in relation to observed and expected changes ( or evi et al, 2016, p. 120).
Adapting to market changes shall demand of companies to coordinate their business strategies, but also to prepare strategic resources with a view to its successful realisation.Compared to earlier periods of economic policies, today, in the age of the 4 th Digital Revolution, intangible resources (knowledge and information) are more dominant than material resources.uri in ( uri in et al. 2016, p. XIV) thinks that intangible resources enable material and financial resources to be used efficiently (with lowest possible costs) and effectively (using best choices) which enables value creation for product buyers and/or service users and company owners.
Challenges that companies face do not influence only the company, but also its stakeholders such as end customers, employees and the environment in which the company operates.Executive directors have the key role in corporate social responsibility (CSR) concept application through honest S. Bogeti et al.Corporate social responsibility as a factor of global competitiveness communication with their employees and motivating them to adequately understand and accept this concept as a part of business policies.With a view to a more efficient communication, companies today publicise CSR reports in which they present their activities in this area.All company employees and its stakeholders are thus informed about the company's CSR activities.
Owing to the accelerated development of new technologies, companies post their CSR or sustainable development reports on their official web sites.
Honest communication is one of the prerequisites for any change implementation in a company and it is thus necessary to insist on it.Successful application of quality management system (QMS), integrated management system (IMS) or companies' corporate responsibility is not possible in the long run if there is resistance in the organisation itself, which most commonly appears as a result of bad communication between executive directors and employees.QMS, IMS and especially TQM, as strategic variants for improving companies' competitiveness, integrate in themselves the demands for socially responsible business.
Companies in the Republic of Serbia have, in the last 15 years, accepted this concept as a part of their business strategy.Successful promoters of CSR on the domestic market are companies which were successfully privatised and which are mostly in foreign ownership.Examples of good practice are seen in NIS, Erste Bank, Coca Cola, Telenor Serbia, VIP Mobile, Metro Cash & Carry Serbia, Heineken Serbia, Carlsberg Serbia, Hemofarm j.s.c and the like.Domestic companies such as Telekom Srbija j.s.c, Komercijalna Banka j.s.c, Metalac j.s.c, Bambi, Nektar, Elektroprivreda Srbija etc, also actively apply the concept of social responsibility.
There is still no clear and generally accepted definition of CSR, although an increasing number of studies are dedicated to the analysis of this concept.We can emphasize a few unambiguous advantages of CSR application, mentioned in recent literature's clear guidelines (Banerjee, 2008;Dahlsrud, 2008;Lee, 2008;Weber, 2008;Carroll, & Shabana, 2010), such as: − It creates conditions for achieving business excellence; − More efficient communication in the company (both internal and external); − Employee satisfaction with working for the company, influencing higher company efficiency; − Reducing business costs by saving energy, recycling waste and the like; − Improving company's image in the society; − Better positioning of the company and its products on the market; − Improving company's competitiveness; − Clearer transparency in business operations.

CORPORATE SOCIAL RESPONSIBILITY AND GLOBAL COMPETITIVENESS
One of the ways to look at one national economy's competitiveness is to analyse the annual report on global competiveness, publicised by the World Economic Forum.This report includes all countries in the world which have done the competitiveness analysis in relation to the criteria set by the World Economic Forum.The result is the formation of the list of the most competitive nations in the world, showing the trends in relation to the competitiveness of the nations and the companies coming from those national economies.
According to the new report of the World Economic Forum for 2017, the Republic of Serbia is in the 78th place in the world and in 2016 it was in the 90th.This year, the Republic of Serbia is in the company of countries such as Uruguay (76th place), Montenegro (77th place), Tajikistan (79th place) and Brazil (80th place).
When talking about the top ten most competitive economies in the world, the list of countries is the same as the previous year (WEF, 2016), with Switzerland remaining the first, and USA and Switzerland swapping places this year, Holland is the fourth and Germany the fifth (the same as last year) -Table 1. Hong Kong has improved its position and this year it is in the sixth place (last year it was in the ninth).Sweden is the seventh (last year it was the sixth), Great Britain the eighth (last year the seventh) and Japan is the ninth (last year the eighth).Finland is in the tenth place, the same as the previous year.When comparing the highest ranked countries in the world to the general competitiveness index and the aspect of competitiveness relating to the issues of corporate ethics, a significant parallel can be drawn between the top ten countries in the world in both categories -Table 2. When talking about the West Balkan countries, the Republic of Serbia, Slovenia, Montenegro and Bosnia and Herzegovina have improved their positions comparing to the previous year, and Croatia remained in the same place -Table 3. Due to the lack of data, Macedonia was not included in this year's Global Competitiveness Index.When talking about West Balkan and Eastern Europe countries, in relation to the corporate social responsibility criteria, the highest ranked country is Albania which was in the 43 rd place according to this year's report.An overview of rankings of West Balkan countries is shown in Table 4.Although the Republic of Serbia has a slight growing trend in relation to corporate ethics application in companies, it occupies the 99 th place according to the criterion of corporate ethics which is significantly worse when compared to the general global competitiveness index.
When it comes to countries in close proximity to the Republic of Serbia, Greece occupies the 74 th place, Turkey the 88 th place, Bulgaria is in the 91 st place, Romania in the 100 th place and Hungary is in the 127 th place.
According to the research done by the Ethisphere organisation (Ethisphere Institute, 2018), 135 companies were on the list of best organisations in relation to ethical operations.Those companies come from 23 different countries in the world and they operate in 57 business areas and industries.Some of the companies that are on the 2018 list are

CORPORATE SOCIAL RESPONSIBILITY AND CONTEMPORARY BUSINESS PRACTICE
Competition forces companies into constant change, as they seek to beat the competition or at least keep up with it.Some, of course, fail or go under, throwing their employees out of work (Fulcher James, 2017, p. 31).
This is why successful executive directors have decided that the application of this concept in their business operations is of strategic importance.The emergence of the term corporate social responsibility is connected to the 1970s and since then many different forms of it have appeared.Moreover, it should not be neglected that technological and social changes in the world have influenced CSR forms and these have contributed to changing the awareness of what this concept stands for.In the beginning, companies' focus was on the philanthropic activities, but in the following period it was on the working practice and ethical business operations.Contemporary trends in the area of good business practice application relate to matters connected with human rights, environmental protection, customer protection, fighting against corruption, supporting social problems and the like.
At the end of the 19 th century and the beginning of the 20 th century, industrial philanthropists were doing business in a way which is widely accepted today, such as by applying employment standards and good practice in the community.William Hesketh Lever, the founder of the Lever Brothers Company, which merged with Margarine Unie Company in 1930 creating Unilever, is one of the most significant philanthropic industrialists to date.The Lever Brothers Company was the first one in Great Britain to employ a safety inspector fulltime, as well as an in-company doctor with 8 working hours and a generous payment policy, and since 1905 the company introduced pensions for both male and female workers.In 1980, the company built the village Port Sunlight, with houses for factory workers, an elementary school, village hospital and an art gallery (Fitzgerald et al, 2010, p. 8).Today, Unilever is a multinational company with over 400 brands, which still follows the good business practice established by its founder.The company has created its central business model "Unilever Sustainable Life Plan" (USLP), which serves as a basis for creating new businesses while focusing on reducing pollution and improving good company influences on the society.The proof that they still uphold the company's policy can be seen in the goals of their program.
The goals of the USLP program (Unilever) are: helping more than a billion people to improve their health and well-being; reducing the influence of our products on the environment by half; getting a 100% of our agricultural raw materials in a sustainable way and improving the conditions and incomes for people in our value chain.
When talking about the directions of improving corporate social responsibility in companies, two important elements contributing to its successfulness have to be emphasized: − Executive management's responsibility and − Communication in the area of CSR.
Company's executive management, owing to its position, creates an adequate atmosphere which will enable employees to understand and apply the principles of good business practice.The experiences of companies who are successful CSR promoters have shown that it is not possible to talk about an efficient CSR application in a company without the proactive executive management.
A research conducted by the renowned international consulting house Deloitte Central Europe in the region of Central Europe and among companies on the list of TOP 500 companies in this region, has shown the managers' attitude about S. Bogeti et al.Corporate social responsibility as a factor of global competitiveness the role of companies in CSR implementation and its influence on the social and economic development.
In this study, the polled managers had the opportunity to express their opinion on the position of CSR in the coming years.The most optimistic were the respondents from Lithuania (100%), Bulgaria (90%), Serbia (79%) and the Czech Republic (78%).Almost half of them believe that CSR will flourish and that there will be a continued growth in the number of socially responsible businesses.One third of respondents claim that CSR will reach maturity as social and environmental issues become a part of business models.
The polled managers have singled out the benefits which include a more active employee involvement in the company, as well as the changes to the image of the company (improvement in reputation, relations with local communities and recognition of the brand as socially responsible).According to the opinions of Serbian managers (CSR Managers Survey 2015, p. 16), the biggest benefits from CSR implementation in their companies are: improvement in reputation (67%), improvement in relations with local communities (63%) and improvement in employee involvement (54%).
Communication in the CSR area is important as the company's efforts in the area of CSR are best shown in this way.The form of communication itself is created by the company and can be presented in different forms, for example, in the Report on Sustainable Development, Report on CSR, the internet and so on and so forth.However, for the transparency of company's operations and stakeholders trust, the CSR information has to be true and of high quality (Bogeti et al., 2016).
Contemporary business conditions have contributed to the stance that quality and social responsibility are considered the most important elements that can have an influence on companies' positive reputation.Companies with bad reputation will as a result have negative financial performances and a weak corporate image.
In 2015, Volkswagen was in the middle of a scandal connected to the software program which faked the date on the emission of exhaust fumes.For the company, apart from financial crisis, this meant losing the position on the respectable "100 Most Ethical Companies in the World", list, formed by the Ethisphere Institute.Three years after the scandal, Volkswagen managed to recover financially, but it still hasn't managed to repair its image and get back on the list of "100 Most Ethical Companies in the World".This scandal proved that Volkswagen's management was not ready to behave according to the principles of good business practice (ethical business, respecting employees) and that the consequences of bad management are far-reaching.For this reason, companies establish their CSR communications through corporate communications responsible for sustainability and social responsibility issues.
One of the key CSR communication forms is corporate reporting that companies use in a strategic and instrumental way.CSR Reporting has been described as "a way for organisations to provide information to different stakeholders regarding social and ecological questions" (Hetze et al., 2016, p. 504-505).
Many people who criticise reporting on social responsibility (SR) miss the point that in the 21 st century, SR reporting is or should be, the basic tool for managing business operations.SR reporting is a way in which a company can understand its exposure to the risks of these changes, as well as its potential to profit from new commercial possibilities.Socially responsible reporting is a process in which a company can collect and analyse data it needs for creating a long-term value and resistance to ecological and social changes.SR reporting is of crucial importance in convincing investors that a company has a future even after the next quarter or next year (KPMG, 2013, p. 10).
Companies have used the development of information and communications technology (ICT) to shift the key role in CSR communication from the, until then, traditional printed document to the internet.Internet is a great communication tool which offers great possibilities to companies, such as fast communication, reducuction of costs, greater stakeholder involvement, greater involvment of young people as potential users and the like.Companies create separate sections on their web sites where they state their goals and examples of good business practice in the area of CSR.Furthermore, companies can post CSR or sustainable development reports in those separate sections, thus informing all stakeholders about the company's activities and achievements in this area and reducing pollution by not printing the report.

THE ANALYSIS OF STUDENTS' ATTITUDES ABOUT CORPORATE SOCIAL RESPONSIBILITY APPLICATION IN THE REPUBLIC OF SERBIA
In the period from November to December 2017, on the territory of 16 towns and municipalities in the Republic of Serbia, a research was conducted, titled "The Analysis of Young People's Attitudes and Opinions about Starting your own Business and Implementing Corporate Social Responsibility".In this research, 592 polled students, aged 19 to 27, expressed their opinions on starting your own business, corporate social responsibility and the competitiveness of domestic economy.In the last five years (2013, 2014, 2015, 2016 and 2017), similar researches were conducted, which can serve for comparison and for getting an overview of young people's attitude towards corporate social responsibility.
As can be seen in Table 5, there has been a decline in the frequency of young people encountering this term since 2015 (57.07%compared to 50.51%).The percentage of people who did not understand the term corporate social responsibility has been changing during these years from 52.36% to 49.49%.These data should partly be evidence that consciousness about the significance of CSR implementation has still not developed among young people, future managers and company owners.However, the problem is that in 10 years of promoting this concept on the domestic market, it has been met with understanding only in the last three years.
The biggest growth was seen in 2015 which, compared to 2013, was 9.43% of respondents, but there was a significant fall of 3.29 percent in the last year of research (2017).The question of young respondents' familiarity with the CSR concept is important since they, as future managers and directors, will be the ones making the strategic decisions for their own companies or the companies they work for, so they have to be familiar with the CSR concept and characteristics.Different ways of young people's familiarisation with the CSR concept are shown in Table 6.As can be seen, in the last two years, the media and different textbooks as well as the internet are emphasized as the models of young people's familiarisation with the CSR.The influence of textbooks speaks about the important role of educational institutions in promoting this concept.
A distinction between private and state higher education institutions must not be made here.Furthermore, we can also see the important role of the media and the internet in young people's familiarisation with CSR which is a good way for a more intensive CSR promotion.This especially applies to the internet since young population is its biggest user.It should also be added that in the digital society and the 4 th Digital Revolution, CSR promotion through social networks is an imperative.For this reason, companies use social networks (Facebook, Twitter, Linkedin, Instagram, YouTube and the like), besides their official web sites, as the tools for a more efficient promotion of good business practice and as a way for all stakeholders (including young people) to get better acquainted with all their activities in this area.
When speaking about CSR activities done by domestic companies, young respondents emphasized promoting social goals the most, while the second most represented was social marketing, followed by socially responsible practice (Table 7).Examples of some social campaigns done in the past by certain media (B92, TV Prva, Blic, RTS), confirmed the research's attitude that domestic companies direct too much attention to promoting social goals.Social marketing as a part of CSR has had a growth of 4.11% in the last 4 years which is the consequence of activities of some domestic companies, such as Telekom Srbija j.s.c, which involve different target groups in their campaigns, for example, the young (mts app competition for the application for mobile devices, called 'You Choose How You Communicate'), entrepreneurs ('mts Start-up Speed up' program), culture ('Tesla's Time Machine'), environmental protection and the like.
Unfortunately, the research has shown that even besides the great effort invested in CSR activities by certain companies, young respondents still do not see domestic socially responsible companies on the market (Table 8).Although that percentage has grown for 13.73% (in 2016) when compared to 2013, that is still not sufficient, especially when we take into consideration that 69.66 % of respondents in 2017 could not describe any domestic company as socially responsible.Domestic companies such as Telekom Srbija j.s.c, Metalac j.s.c, Forma Ideale, Nektar, Koncern Bambi, Nordeus, Yumis l.l.c, and Boži i sinovi, are only a few of successful domestic companies that have included the principles of good business practice in their business strategy. .It is, thus, necessary to promote    The reason for such a high percentage of unawareness of domestic socially responsible companies can be found in the lack of understanding of the term corporate social responsibility, which has improved over the last two years and which can best be seen in the percentage of familiarity with the CSR term in Table 5.For this reason, a comprehensive promotion of the corporate social responsibility concept among young people can be the solution and it has to encompass the following three levels (Bogeti et al. 2017, p. 43-44) CSR implementation in the Republic of Serbia still isn't on an adequate level which is a serious problem in developing domestic economy's competitiveness.Namely, the biggest promoters of this concept on the domestic market are the companies whose owners are foreigners or those whose majority stakeholders are foreigners.A small number of domestic companies are willing to engage in this area.The reason for this kind of attitude of domestic companies lies in the fact that managers still do not understand completely the practicality of CSR implementation for improving competitiveness, or in other words, they are profitoriented.
Corporate social responsibility application in domestic companies should enable the formation of conditions for a more successful market performance and achievement of competitive ability of domestic companies.The basic initiator of these activities has to be knowledge.The application of the ethical code of conduct from both different associations and chamber systems and competitive business subjects, should contribute to the development of competitive relations in the economy and the improvement of competitive climate.However, the main part of the effort belongs to the business organisations themselves, which should actively apply social initiatives from the corporate social responsibility complex, such as promoting social goals, marketing connected to social goals, corporate social marketing, corporate philanthropy, volunteer work for the community, socially responsible business practice and similar.Moreover, all initiatives from the CSR spectre are not equally present in domestic companies (for example, volunteer work is rarely applied in domestic companies).As CSR application directly influences the improvement of the company's image, it is necessary to further develop the awareness among domestic directors about the need for CSR application in domestic companies.
Special emphasis on the domestic market must be put on popularising CSR implementation among young people, who are unfortunately still not wellinformed about the very concept of CSR, as well as the good business practices on the market of the Republic of Serbia.In that respect, a more active promotion of the CSR concept among young people, in which the focus shall be the basics of CSR with examples of domestic companies that nurture good business practice on the market, is and imperative, in order to eliminate prejudice that socially responsible domestic companies do not exist.

Table 1 :
Rankings of the top 10 countries in the world according to competitiveness in 2017.

Table 2 :
Rankings of the top ten countries in the world in relation to the corporate ethics

Table 5 :
Encountering the term CSR

Table 6 :
Ways of familiarisation with CSR

Table 7 :
The most frequent CSR activity in domestic companies

Table 8 :
The existence of a domestic company which can be described as a socially responsible organisation