A Model of CSR in PJM

7/26/2019 A Model of CSR in PJM

1/7

VERSLAS: TEORIJA IR PRAKTIKA

BUSINESS: THEORY AND PRACTICE

2009104: 315321

ISSN 16480627 print / ISSN 18224202 online

http://www.btp.vgtu.lt/en

doi: 10.3846/16480627.2009.10.315321

HE MODEL OF CORPORAE SOCIAL RESPONSIBILIYIN PROJEC MANAGEMEN

Martin Schieg

echnical University o Munich, Arcisstrae 21, 80333 Munich, GermanyE-mail: [email protected]

Received 18 January 2009; accepted 23 September 2009

Abstract.Corporate social responsibility as a management concept is growing more and more important also or project companies.Te task o project management is to identiy relevant ecological systems, to recognize the internal and external dimension osocial responsibility, and to test existing standards o Corporate Social Responsibility or their applicability in projects. Te specialbenefit o CSR in projects is to set-up values such as integrity, credibility and reputation. For successul implementation o CSRactivities, it is essential to align the commitment o the project organization to the own business operations and own goals.

Keywords:Corporate Social Responsibility, sustainability, social responsibility, project management, riple-Bottom-Line-Concept, sustainability ratings.

MONI SOCIALINS ASAKOMYBS VADYBOS MODELIS

Martin Schieg

Miuncheno technikos universitetas, Arcisstrae 21, 80333 Miunchenas, VokietijaEl. patas [email protected]

teikta 2009-01-18; priimta 2009-09-23

Santrauka.moni socialins atsakomybs koncepcija tampa vis svarbesn. Projekt vadybos tikslas nustatyti svarbias ekolo-gines sistemas, suvokti vidinius ir iorinius socialins atsakomybs aspektus, patikrinti verslo socialins atsakomybs standartus.moni socialins atsakomybs nauda sukurti tokias vertybes, kaip dorumas, patikimumas ir reputacija.

Reikminiai odiai:socialin korporacijos atsakomyb, darnioji pltra, socialin atsakomyb, projekt valdymas, darniosiospltros trimatis pagrindas.


2/7

316 M. Schieg.Te model o corporate social responsibility...

1. Principles of Corporate SocialResponsibility

1.1. Te concept of sustainability asthe superior CSR concept

Te concept o Corporate Social Responsibility (CSR), de-

scribes the voluntary contribution o the economy towardssustainable development beyond statutory requirements.

CSR is an integrated business concept that considers re-

sponsible entrepreneurial action besides ones own business

activities.

In general, sustainability is about extending human

action not only to inter-generation equality, but also global

equality (Bundesregierung 2004).

Te riple-Bottom-Line concept (see Fig. 1) o sustain-

able development assumes that sustainable development

can be realized only through simultaneous and equal imple-

mentation o ecological, social and economic goals. In thisconcept, the term o the magic triangular o sustainability

is also widely used. Te three bottom-lines o sustainabil-

ity are interacting with each other, and need well-balanced

coordination in the long term.

Fig. 1. riple-Bottomline-Concept o Social Responsibility

Ecological sustainability promotes a way o living that

drains the natural basics o lie only in the measure in which

they can regenerate.

Economic sustainability means the economic operations

o the present generation should not be a burden or the ol-

lowing generations through the obligations it created.Te concept o social sustainability in any nation shall

limit social tensions and prevent conflicts rom escalating,

and help solve them in a peaceul and civilized manner.

Acceptance o social responsibility leads to creation o

new partnerships and new opportunities or expanding

existing partnerships in and between companies.

Cooperation models o specialized players have become

an essential part o the economy. Project management takes

over coordination between companies, and coordinates the

project and the cross-disciplinary processes towards the

joint target. Creation o standards o social responsibility

helps improve the cooperation between alternating proj-

ect partners, and lays the oundation or coordination and

communication across the borders o corporations and

countries.

1.2. Standards and initiatives of organizations

Te existence o standards or taking over social responsi-

bility is particularly important in project organizations. Te

more standardized the companies involved in the project

treat these issues, the better CSR concepts can improve

cooperation.

So ar, there is a great bandwidth o national and inter-

national standards as well as institutions working on the

development o and compliance with such standards

(European Multistakeholder Forum on CSR 2004). Te

standards and guidelines listed below are presently used

with preerence:

United Nations Global Compact OECD

Global Compact or United Nations Global Compactstands or a global union established between com-

panies and the UNO with the intention to make glo-

balization more social and ecological (International

Labour Conerence 2008). In this network, companies

work together with business associations, works coun-

cils, non-governmental organizations, scientists, cities

and stock exchanges. Government institutions either

directly or indirectly support the work, or they are active

members.

Principles or multinational companies by the Orga-nization or Economic Cooperation and Development

(OECD)

Tese principles cover the conduct o internation-

ally operated companies with regard to the criteria:

employees, environment, air competition, customers,

research and development. Recommendations are given

or implementation o the principles in the corporate

strategy.

Validation according to Eco-Management and Audit

Scheme (EMAS) as well as Certificate ISO 14001

Te Community's Eco-Management and Audit Scheme,

or EMAS, is a concept that can be used or CSR: EMAS

was developed by the European Union and it is a joint

system o ecological management and ecological audits

or organizations wanting to improve their ecological

ootprint. Te alignment to communication, dialogue

and transparency creating trust is a special quality o

EMAS. Every ecological declaration has to be audited

by an independent, officially chartered eco-auditor. I

the declaration ulfils the strict conditions o the direc-

tive, the eco-auditor confirms the eco-declaration is

valid, and the organization will be listed in the EMAS-

Register. Te ecological declaration o the EC-Directive

Corporate SocialResponsibility

EconomicResponsibility

EcologicalResponsibility

SocialResponsibility


3/7

is intended or the public. Further to that, there is also

the standard ISO 14001 as the result o standardization

efforts o the private economy. EMAS is considered the

more sophisticated system; however it concentrates on

Europe, while ISO 14001 is internationally accepted ar

beyond the borders o the EU.

European Eco-Quality Label Blauer Engel

(Blue Angel)

Te Blauer Engel is a quality label or especially envi-

ronmentally riendly products and services, and has

been awarded since 1978. Presently, the ollowing insti-

tutions partake in the classification process:

Bundesministerium r Umwelt, Naturschutz und

Reaktorsicherheit, (German Office or Ecology, Natural

Preservation and Reactor Saety), Umweltbundesamt

(Federal Ecological Office), RAL Deutsches Institut

r Gtesicherung und Kennzeichnung e.V., (German

Institute or Quality Control and Labelling) Jury

Umweltzeichen (Jury eco-label), the independent

decision-making council with representatives o eco

and consumer associations, workers unions, industry,

trade, crafs, communities, science, media, churches and

German regions.

Dow Jones Sustainability Index

Te Dow Jones Sustainability Indices are a series o stock

indices or which companies are selected by sustain-

ability criteria among other criteria. Te companies in

the different indices will be rated by economical, socialand ecological risks and chances.

FSE4 Good-Indices

Te series o sustainable indices reflects the social, eco-

logical and ethical conduct o companies. Tus FSE

ulfils the growing demand o investors who want to

measure the social responsibility o companies in which

they plan to invest. For classification in the index series,

companies have to disclose how they identiy the essen-

tial social and ecological risks o their business, how they

manage them, and how they inorm their shareholdersand stakeholders about them. For this purpose, the com-

panies have to ulfil a number o CSR-criteria based on

three widely defined principles:

Activities on ecological sustainability.

Development o positive relations with stakehol-

ders.

Compliance with universal human rights.

Econsense

Econsense as an association o big, multi-nationally ope-

rating companies in the German economy as a platormcontributes to the discussion o sustainability ratings

and uses its potentials as a network (Econsense 2009).

2. CSR in Projects

2.1. Systems in the project environment

A project organization is a temporary organization com-

pleting project-related tasks. Normally, it will be staffed

with people involved in the project who come rom di-

erent permanent organizations and perorm services orthe project, or influence the project.

Project members will be selected or certain tasks and

set up across the divisions o the corporation. Te less the

members o the group know each other, the more trust-

building and developing activities are required to make the

group highly unctional.

Te situation and culture o the companies rom which

the project members come have influence on the project cul-

ture. Intercompany experiences influence the behaviour in

the project groups. Te values o the company have impact

on the type o targets that will be defined, and hence on theproceeding in work processes. It is the duty o the project

management to provide the conditions or supporting suc-

cess-ocussed project work with CSR.

Te CSR model is influenced by the ollowing systems

in the environment o the project (see Fig. 2):

Organization o the homebase companies o the

project members.

Employees.

echnological progress.

Social values.

Competitors.Suppliers and contractors.

Politics and lobbies.

Customers.

Fig. 2. Systems in the environment o the project organization

2.2. CSR in building projects

rustworthiness, accountability and reliability are growing

more and more important or the reputation o projectcompanies. In the uture, the value o the reputation will

Public

Company

Customer

Competitors

ProjectOrganization

Employees

Environment

Politics

Verslas: teorija ir praktika, 2009, 10(4): 315321 317


4/7


be as important as the weight o a brand. Tis means set-

ting-up the reputation has to be understood as a long-term

investment.

Tree essential actors make ethical and ecological

behaviour in projects inevitable:

Te gain o reputation or the project.

Te reduction o financial risks related to potentiallegal disputes.

Te creation o competitive edge by early alignment

to regulations pending adoption.

2.3. Drivers for the integration of socialresponsibility in project organizations

Project players will show sustainable commitment only

i this commitment obviously benefits their own inter-

ests. Te ollowing drivers or taking over responsibility

were identified in the Green Book o the EU (Grnbuch

Europische 2001):

New terms or inormation and communication

Te global availability o inormality and communi-

cation acilities, and the reduction o communicating

costs, lead to increased transparency. Inormation on the

activities o project organizations can easily get known

all over the world. Tis increases the probability that

entrepreneurial misconduct o the project management

will be discovered.

Globalization Te extension o opportunities or cooperation and

interaction create globally meshed value adding chains.

Tis again creates interdependencies o the project play-

ers. Globally acting big corporations bear responsibil-

ity beyond the borders o their own company also or

the smaller companies involved in their value adding

chain.

Public awareness

Media reports on misconduct o companies having

reduced the public trust in companies. Te economicmarket system is more requently questioned. Business

activities are observed with more critical alert. CSR

activities have a positive impact on purchasing behav-

iour.

Te role o the employee

Requirement profiles or employees have changed.

Te individual is growing more relevant to the project

organization because o the extended opportunities or

action. Central control o conduct and perormance

is limited. Hierarchical structures are flattened or the

benefit o unctional project organizations.

Organizational structures channelling the conduct

o the individual will be more important. Employees

should be better instructed to reflect the consequences

o their actions, and the resulting consequences o their

decision-making. Misconduct o individual employees

can have ar-reaching consequences or the project and

beyond.

Capital markets

Te market or so-called sustainable investments is gro-

wing. Fulfilment o certain ecological and social metrics

is considered conditional. For the companies involved

in a project, the public appearance o the project gives

reason to take social efforts.

2.4. Social responsibility in projects

In business transactions, the parties grant each other trust

in the orm o liberties. Tese liberties define the clearanceand discretion o the actors. In relation to the responsibili-

ties, there are clearly defined fields o action (Mutz 2000).

Te chances or realization o responsible action are within

the limits o the clearance or actions.

Tis context can also be described as a circle o action-

determining conditions, actions, and uture action-deter-

mining conditions:

Te action-determining conditions define the clea-

rance or action.

Decisions ocus on certain objectives with specific,

intended consequences o actions.Te consequences o todays actions reach urther;

they inevitably also define uture conditions or ac-

tions.

odays actions also strengthen or weaken the trust

o the environment in the actor.

In the given circle, responsible action creates an eco-

logical benefit or the actor. Te gained trust ortifies his

competitive position on the market, this makes responsible

action an economic incentive.

Assignment and acceptance o responsibility generally

create cooperation gains through improved cooperationand mutual benefit.

Te project company has to maintain a dialogue with all

stakeholders who are interested in the activities. Corporate

responsibility thereore relates to internal as well as external

groups.

2.4.1. Te internal dimension of social responsibility

Acceptance o social responsibility or employees

Social responsibility first o all concerns employees. Te

target o project management is to win and maintain

qualified workers. For this purpose, companies set up

incentives such as lie-long learning, empowerment,


5/7

compatibility o job and amily, or profit and capital

shareholding. More and more ofen, companies today

take action to promote the health o their employees.

Projects give employees special opportunity to qualiy

and take over more responsibility. Te close cooperation

in the requently multinational groups increases social

competences o individuals. Furthermore, every emplo-yee is more aware o the relevance o his perormance

or the project success compared to a position in a line

unction in his homebase company.

Adjustment to change

Socially responsible restructuring balances the interests

and concerns o all actors affected by the change and

related decision-making.

Ecological compatibility and management o natural

resources

Te reduction o the costs or energy and waste dispo-

sal, or production, and or elimination o pollutants

is positive or project organizations. For this purpose,

companies already apply existing national standards and

norms, compliance to which is audited regularly.

Te precise analysis o processes generally leads to more

efficient use o resources, and thus ortifies competiti-

veness.

2.4.2. Te external dimension of social responsibility

Local communities Corporate social responsibility also has to consider the

integration o companies into the local environment.

Companies have an essential unction in local commu-

nities. Tey offer jobs, pay wages, and social benefits,

and they provide tax earnings or the communities. On

the other hand, companies depend on the stability and

prosperity o the society and communities in which they

operate.

Different to that, project companies normally exist

in a time-limited, locally defined environment. Tis

should not lead the project management to neglectingthe effects o its activities on the local environment. For

the companies involved in the project, the image o the

project at a certain location and the local commitment

are important or their competitiveness. Project organi-

zations too are in interaction and interdependency with

the local ecological conditions.

Business partners, suppliers and consumers

Cooperation with alliance and joint venture partners

as well as ranchisees is equally important. In the long-

term, such partnerships can provide air prices and

terms as well as quality and reliable supply.

Te effects o CSR will not be limited to individual

project players, rather they reach out to the related

business partners. Big corporations outsourcing part

o their value adding chain take over responsibility or

the working conditions o their suppliers. In this aspect,

it has to be considered that these suppliers are requently

mainly or ully dependent on bigger companies. Long-term customer allegiance and alignment to

demands and requirements o customer are particular-

ly important or project companies providing services.

Customers grant these organizations advance trust.

Saeguarding o human rights

Under the growing pressure rom consumer groups

and non-governmental organizations, more and more

organizations set up ethical codices related to working

conditions, human rights and eco-aspects, addressed

especially to sub-contractors and suppliers. Ethical

codices cannot replace national, European and inter-

national law and binding regulations (International

Labour Conerence 2008). Binding regulations war-

rant compliance with minimum standards applying to

all, while ethical codices and other voluntary initiatives

can amend and enhance these standards or those who

comply with them.

Ethical codices should be complied with on all organiza-

tional levels and throughout the entire production chain.

Unlimited inormation rom the project management

to the stakeholders about compliance is essential.

3. Benefits of CSR for the project organization

Te benefits o CSR activities in project organizations are

hard to measure in cash. Earnings rom investments in

CSR activities however show in the ability o the company

to establish assets such as integrity, credibility or reputa-

tion, all o which are growing more and more important

(Bassen et al.2005).

Image win

CSR activities help project organizations gain publicawareness. However, it is essential that the activities are

in line with all other business activities in the corpora-

tion.

Risk mitigation

Risk rating o ecologically relevant processes and activi-

ties increases transparency. Preventive measures prevent

or mitigate the effects o accidents or disturbances.

Cost saving

Conscious handling o resources, prevention, utilization

and reduction o ecological ootprint and improvement

o processes lead to cost savings.



6/7


rustbuilding

Investments in CSR activities increase the trust o

authorities, communities and eco-organizations in the

project and in the project organization.

Employee motivation

Te reputation o a socially responsibly acting organiza-tion contributes to increased employee motivation and

satisaction.

Growing social competence

Acquisition o additional knowledge and enhanced

involvement o employees increases their social com-

petence in project work.

4. Planning and implementationof CSR activities

Successul implementation o CSR activities depends

on a written CSR strategy. Appointment o a Corporate

Responsibility Officer is recommended or implementa-

tion o this strategy.

4.1. Hints for successful implementationof CSR activities

Te CSR concept can be used in projects in the long-term

only i the decided activities have positive effect on project

outcome. Success essentially depends on the commitment

o the project organization aligning to the companys ownbusiness activities and targets (OECD 2000).

Te first step is a detailed analysis o the project environ-

ment, based on three dimensions:

Economy: market, competition, cooperation, em-

ployees;

Society: change o values, acceptance, social

trends;

Natural environment: saety o resources, depth o

ecological intervention, eco-design.

So ar, the ollowing actors o successul implementa-

tion o CSR activities in projects have been identified:

Te values and visions defined by CSR have to be

communicated to the employees, and anchored in

the project culture.

Te CSR concept has to be integrated in the pro-

ject strategy, and thus influences the project work-

flows.

Employees have to be involved in implementation

and realization o the CSR-program.

Te CSR targets and activities have to be defined,

communicated, and checked or compliance.

Te success o CSR activities, as well as their expen-

ses, have to be controlled, tested and evaluated.

Te target should be to set up a permanent, long-

term cooperation with the stakeholders.

Networking with other organizations to exchange

experiences and to learn rom each other has been

successul. Rating instruments will help rate the qu-

ality o business partners with respect to their ethi-

cal and social perormance when looking or suitablebusiness partners (Econsense 2009).

4.2. Criteria for rating CSR activities

Further to strategic alignment, the proessional implemen-

tation will decide about high-quality CSR commitment.

Te company in its social commitment will always

remain a player in competition. Tis means the strategic

management o CSR projects is very important to find out

whether core competencies are used in the company.

Te ollowing criteria will help evaluate CSR activities:

Will the commitment lead to a competitive edge orthe company? Competitiveness and the dimensions

o environmental protection and social security de-

pend on each other, and are mutually conditional

or success.

Are projects, partners and issues consciously selec-

ted?

Is the CSR commitment communicated as widely

throughout the company as possible? Do the em-

ployees really know about the projects o the com-

pany?

Are corporate potentials, abilities and special skillsused or project management or internal activities?

Measuring the effect o the activities in the social envi-

ronment is an essential component o CSR management:

Te first step is to clariy the relation to the problem.

What is the problem to which the company relates

its commitment?

Setting-up networks is very recommendable. Pro-

jects will realize sustainable effects on society in

particular i problems are not tackled in isolated

places, but i the work also establishes and ortifies

the sel-aid potential o the community.

4.3. CSR as a contribution to value addingin the company

In order to visualize the contribution o CSR to value add-

ing and value increasing o projects, requently it has been

proposed to add the ecological and social aspects to the

balance sheet. Tis new balance term was listed or instance

by the European Council in their Green Book Europische

Rahmenbedingungen r die soziale Verantwortung der

Unternehmen (General European Conditions or Corporate

Social Responsibility (2001). Te council proposes that ora European strategy o sustainable development, corpora-


7/7

tions in their annual financial statements should audit the

business perormance by financial, ecological and social

criteria.

In order to relate the three dimensions o sustainabil-

ity (economy, society, ecology) to corporate management,

the business consultants or SustainAbility coined the term

riple-Bottom-Line.Te riple-Bottom-Line concept reflects a new under-

standing o business success. According to this concept,

the business perormance should be balanced by economic,

ecological and social criteria.

5. Conclusion

Modern, complex societies require well reflected applica-

tion o ethical concepts.

CSR is a method o strategic business management. For

project management, this means the systematic combina-

tion o the interest in the project with the interest in public

well-being. Integrating project players o different cultural

backgrounds, and finding, defining and implementing

joint standards or socially responsible acting are quite

difficult.

Tis requires high social competency o the project man-

agement, which has to have the qualification and compe-

tence required or developing and promoting CSR.

Introduction o CSR to projects using already exist-

ing standards generally improves cooperation between

the project players or the benefit o more efficient project

handling, and trustul cooperation.

Te voluntary acceptance o social responsibility is a

worthy long-term investment in the economic success o

projects.

Successul implementation o CSR activities depends on

the analysis o the environment o the company. Strategic

planning o the activities should be ollowed by control and

rating o the social commitment.In order to visualize the contribution o CSR to the

added value o projects, ecological as well as social aspects

should be considered in the balance sheet.

References

Bassen, A.; Jastram, S.; Meyer, K. 2005. Corporate Social Respon-sibility, Zeitschrif r Wirtschafs- und Unternehmensethik(zwu)6/2: 231236.

Bundesregierung. 2004. Perspektiven r Deutschland: UnsereStrategie r eine nachhaltige Entwicklung, Fortschrittsbe-

richt. Berlin.Econsense [online]. 2009. Available rom Internet:< http://www.

econsense.de/_CSR_MIGLIEDER /index.asp>.

European Multistakeholder Forum on CSR. 2004. Final results& recommendations, Final Report, 29 June 2004.

Grnbuch Europische Rahmenbedingungen r die sozialeVerantwortung der Unternehmen [Green Paper on corpo-rate social responsibility] KOM (2001) 366, Brssel.

International Labour Conerence. 2008. Provisional Record,97thSession, Geneva.

Mutz, G. 2000. Unternehmerisches Brgerschafliches Engage-

ment: Corporate Social Responsibility, ForschungsjournalNeue Soziale Bewegung 13(2): 7786.

OECD 2000. Te OECD Guidelines or Multinational Enter-prises, Revision 2000.

Martin SCHIEG.Proessor o echnical University o Munich, Department o Civil Engineering. Te author o more than 100publications. Research interests: management o construction projection projects, risk management.


Documents

A Model of CSR in PJM