Corporate social responsibility

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The Russian Presidential Academy of National Economy and Public Administration

Department of Economic and Social Sciences

Corporate Social Responsibility

Written by: Belousova Darya

Moscow 2015

Contents

Introduction

1. What is Corporate Social Responsibility and why it is important for business

1.1 The definition of CSR and main approaches

1.2 Stakeholder VS Shareholders

2. The principles of CSR: features and problems

2.1 The global need for CSR

2.2 Sanofi Group Company and its CSR program. Results and Perspectives

Conclusion

Bibliography

Introduction

Nowadays attention to problems of socially responsible behavior of business, its role in socially economic development increased. The companies work on improvement of business reputation, image to provide competitiveness. CSR is the foundation for achieving mutually aligned interests and winning the moral argument about the social relevance of the organization. One of the strongest CSR roles of public relations is to participate in the social construction of the meaning that defines and evaluates CSR standards by type of organization and during a given era. Framed this way, CSR is important for an organization's success for two primary reasons: (1) To enhance its reputation as being morally bound to rectitude and (2) to advance the organization's credibility and character in public policy battles and during the early stages of a crisis.

Relevance of our research is that at the present time of development business relations between the companies, partners, and also between the companies and consumers the need for new instruments of regulation of the companies' actions increased.

Not all companies correctly understand essence of corporate social responsibility, the principles of its work and the purpose, that's why business can't come to the new level of global trade relations. In addition, the companies lose possibility of adjustment of the long relations with clients, shareholders, become less competitive in relation to the rivals.

The purpose of this term paper is studying of a question of introduction of corporate social responsibility in the large companies on the example of the Russian Sanofi company. In other words, it is necessary to compare possible approaches to corporate social responsibility, to define the need of investment into KSO and features of CSR policy in the Russian Sanofi company.

In the analysis the following tasks will be carried out:

· To study theoretical aspects of a question

· To reveal drawbacks and advantages of the main approaches of CSR

· To consider a question of need of introduction of CSR on the basis of statistical data

· To analyze activity of the Sanofi company and to give a general characteristic to the Russian companies concerning social responsibility

The term paper consists of two heads, each of which includes separate sections. In chapter 1 theoretical justifications of corporate social responsibility, a dilemma between two approaches to KSO will be considered. Chapter 2 will be devoted to the short characteristic and activity of the Sanofi company, the analysis of importance and need of CSR for the international practice. This work can form a basis for deeper studying of partnership, and will also help managers to study more carefully a question of increase of economic efficiency of the company, its competitiveness and to build the best strategy of business development and relationship with all participants of the market by means of introduction of corporate social responsibility.

1. What is Corporate Social Responsibility and why it is important for business

1.1 The definition of CSR and main approaches

Much has been said and written about corporate social responsibility and its growing value for business more often than ever. The large multinational companies and representatives of private business already radically change the activity in the direction of social responsibility for employees, consumers and for the world. It is not so important is the company large or small, state or private, because its actions anyway infringe on interests of a large number of interested parties: clients, shareholders, workers, suppliers and society. In conditions when the close attention of the public to business operations grows, the companies are more and more compelled to satisfy expectations of those who forms opinion of the public, and also expectations of government institutions and clients to continue successful activity. In effect, the companies use the principles of CSR because they believe that ethic and socially responsible business gives them more chances of success.

Corporate social responsibility (CSR) refers to a business practice that involves participating in initiatives that benefit society. Some even propose that the concept of CSR has become void of meaning. Others claim that the varying definitions of CSR are congruent, with each of the definitions relating to the effects of a business on its stakeholders. A better definition is posited by the Commission of the European Communities: [CR] is a concept whereby companies integrate social and environmental concerns in their business operations and in their interaction with their stakeholders on a voluntary basis. It is about enterprises deciding to go beyond minimum legal requirements and obligations stemming from collective agreements in order to address societal needs.

Companies do gain tangible and intangible benefits by practising CSR and by projecting an image of good governance and social responsibility to the external world.

This question has been widely discussed in the literature. Economist Milton Friedman, the most outspoken proponent of this view, has argued that social matters are not the concern of business people and that these problems should be resolved by the unfettered workings of the free market system. Friedman posited that management is "to make as much money as possible while conforming to the basic rules of society, both those embodied in the law and those embodied in ethical custom" (The New York Times Magazine, September 13, 1970). In 1971 the Committee for Economic Development used a "three concentric circles" approach to depicting CSR. The inner circle included basic economic functions-- growth, products, jobs. The intermediate circle suggested that the economic functions must be exercised with a sensitive awareness of changing social values and priorities. The outer circle outlined newly emerging and still amorphous responsibilities that business should assume to become more actively involved in improving the social environment. In 1979 Archie B Carroll characterized the responsibilities of business as economic, legal, ethical, and discretionary. By 1991 Carroll had conceptualized these responsibilities in the form of a pyramid and the discretionary category was replaced by a philanthropic category.

The pyramid of corporate social responsibility

Economic Responsibilities

Historically, business organizations were created as economic entities designed to provide goods and services to societal members. The profit motive was established as the primary incentive for entrepreneurship. Before it was anything else, business organization was the basic economic unit in our society. As such, its principal role was to produce goods and services that consumers needed and wanted and to make an acceptable profit in the process. At some point the idea of the profit motive got transformed into a notion of maximum profits, and this has been an enduring value ever since. All other business responsibilities are predicated upon the economic responsibility of the firm, because without it the others become moot considerations. Figure 1 summarizes some important statements characterizing economic responsibilities. Legal responsibilities are also depicted in Figure 1, and we will consider them next.

Legal Responsibilities. Society has not only sanctioned business to operate according to the profit motive; at the same time business is expected to comply with the laws and regulations promulgated by federal, state, and local governments as the ground rules under which business must operate. As a partial fulfillment of the "social contract" between business and society firms are expected to pursue their economic missions within the framework of the law. Legal responsibilities reflect a view of "codified ethics" in the sense that they embody basic notions of fair operations as established by our lawmakers. They are depicted as the next layer on the pyramid to portray their historical development, but they are appropriately seen as coexisting with economic responsibilities as fundamental precepts of the free enterprise system.

Ethical Responsibilities. It is a well-known fact that economic and legal responsibilities embody ethical norms about fairness and justice, ethical responsibilities embrace those activities and practices that are expected or prohibited by societal members even though they are not codified into law. Ethical responsibilities embody those standards, norms, or expectations that reflect a concern for what consumers, employees, shareholders, and the community regard as fair, just, or in keeping with the respect or protection of stakeholders moral rights. The environmental, civil rights, and consumer movements reflected basic changes in societal values and thus may be seen as ethical leaders, who are predicting and resulting in the later legislation. In another sense, ethical responsibilities may be seen as embracing newly emerging values and norms society expects business to meet, even though such values and norms may reflect a higher standard of performance than that currently required by law.

Philanthropic Responsibilities. Philanthropy encompasses those corporate actions that are in response to society's expectation that businesses be good corporate citizens. This includes actively engaging in acts or programs to promote human welfare or goodwill. Examples of philanthropy include business contributions to financial resources or executive time, such as contributions to the arts, education, or the community. A loaned-executive program that provides leadership for a community's United Way campaign is one illustration of philanthropy.

The distinguishing feature between philanthropy and ethical responsibilities is that the former are not expected in an ethical or moral sense. Communities desire firms to contribute their money, facilities, and employee time to humanitarian programs or purposes, but they do not regard the firms as unethical if they do not provide the desired level. Therefore, philanthropy is more discretionary or voluntary on the part of businesses even though there is always the societal expectation that businesses provide it.

Three Approaches to Corporate Responsibility

According to the traditional view of the corporation, it exists primarily to make profits. From this money-centered perspective, insofar as business ethics are important, they apply to moral dilemmas arising as the struggle for profit proceeds. These dilemmas include: “What obligations do organizations have to ensure that individuals seeking employment or promotion are treated fairly?” “How should conflicts of interest be handled?” and “What kind of advertising strategy should be pursued?” Most of this textbook has been dedicated to these and similar questions.

Broadly, there are three theoretical approaches to these new responsibilities:

· Corporate social responsibility (CSR)

· The triple bottom line

· Stakeholder theory

Corporate Social Responsibility (CSR)

As a specific theory of the way corporations interact with the surrounding community and larger world, corporate social responsibility (CSR)is composed of four obligations:

Theeconomic responsibilityto make money. Required by simple economics, this obligation is the business version of the human survival instinct. Companies that don't make profits are (in a modern market economy) doomed to perish. Of course there are special cases. Nonprofit organizations make money (from their own activities as well as through donations and grants), but pour it back into their work. Also, public/private hybrids can operate without turning a profit. In some cities, trash collection is handled by this kind of organization, one that keeps the streets clean without (at least theoretically) making anyone rich. For the vast majority of operations, however, there have to be profits. Without them, there's no business and no business ethics.

Thelegal responsibilityto adhere to rules and regulations. Like the previous, this responsibility is not controversial. What proponents of CSR argue, however, is that this obligation must be understood as a proactive duty. That is, laws aren't boundaries that enterprises skirt and cross over if the penalty is low; instead, responsible organizations accept the rules as a social good and make good faith efforts to obey not just the letter but also the spirit of the limits.

Theethical responsibilityto do what's right even when not required by the letter or spirit of the law. This is the theory's keystone obligation, and it depends on a coherent corporate culture that views the business itself as a citizen in society, with the kind of obligations that citizenship normally entails. Many industrial plants produce, as an unavoidable part of their fabricating process, poisonous waste. In Woburn, Massachusetts, W. R. Grace did that, as well as Beatrice Foods. The law governing toxic waste disposal was ambiguous, but even if the companies weren't legally required to enclose their poisons in double-encased, leak-proof barrels, isn't that the right thing to do so as to ensure that the contamination will be safely contained? True, it might not be the right thing to do in terms of pure profits, but from a perspective that valueseveryone'swelfare as being valuable, the measure could be recommendable.

Thephilanthropic responsibilityto contribute to society's projects even when they're independent of the particular business. A lawyer driving home from work may spot the local children gathered around a makeshift lemonade stand and sense an obligation to buy a drink to contribute to the neighborhood project. Similarly, a law firm may volunteer access to their offices for an afternoon every year so some local schoolchildren may take a field trip to discover what lawyers do all day. An industrial chemical company may take the lead in rehabilitating an empty lot into a park. None of these acts arise as obligations extending from the day-to-day operations of the business involved. They're not like the responsibility a chemical firm has for safe disposal of its waste. Instead, these public acts of generosity represent a view that businesses, like everyone in the world, have some obligation to support the general welfare in ways determined by the needs of the surrounding community.

Taken in order from top to bottom, these four obligations aredecreasinglypressing within the theory of corporate social responsibility. After satisfying the top responsibility, attention turns to the second and so on. At the extremes, the logic behind this ranking works easily. A law firm on the verge of going broke probably doesn't have the responsibility to open up for school visits, at least not if the tours interfere with the accumulation of billable hours and revenue. Obviously, if the firmdoesgo broke and out of business, there won't be any school visits in any case, so faced with financial hardship, lawyers are clearly obligated to fulfill their economic obligations before philanthropic ones.

Even among individuals promoting a strong sense of corporate responsibility for the surrounding community, there may have been no clear answer to the question about the proper course of action. Regardless, corporate social responsibility means every business holds four kinds of obligations and should respond to them in order: first the economic, then the legal, next the ethical, and finally the philanthropic.

The Triple Bottom Line

This brings us to the next model. Thetriple bottom lineis a form of corporate social responsibility dictating that corporate leaders tabulate bottom-line results not only in economic terms (costs versus revenue) but also in terms of company effects in the social realm, and with respect to the environment. There are two keys to this idea. First, the three columns of responsibility must be kept separate, with results reported independently for each. Second, in all three of these areas, the company should obtain sustainable results. The notion of sustainability is very specific. At the intersection of ethics and economics,sustainability means the long-term maintenance of balance. As elaborated by theorists including John Elkington, here's how the balance is defined and achieved economically, socially, and environmentally:

Economic sustainabilityvalues long-term financial solidity over more volatile, short-term profits, no matter how high. According to the triple-bottom-line model, large corporations have a responsibility to create business plans allowing stable and prolonged action. That bias in favor of duration should make companies hesitant about investing in things like dot-coms. While it's true that speculative ventures may lead to windfalls, they may also lead to collapse. Silicon Valley, California, for example, is full of small, start-up companies. A few will convert into the next Google, Apple, and Microsoft. What gets left out, however, of the newspaper reports hailing the accomplishments of a Steve Jobs or a Bill Gates are all those other people who never made it (all those who invested family savings in a project that ended up bankrupt). Sustainability as a virtue means valuing business plans that may not lead to quick riches but that also avoid calamitous losses. Social sustainabilityvalues balance in people's lives and the way we live. A world in which a few Fortune500 executives are hauling down millions a year, while millions of people elsewhere in the world are living on pennies a day can't go on forever. As the imbalances grow, as the rich get richer and the poor get both poorer and more numerous, the chances that society itself will collapse in anger and revolution increase. The threat of governmental overthrow from below sounds remote to Americans who are accustomed to a solid middle class and minimal resentment of the wealthy. In world history, however, such revolutions are quite common. That doesn't mean revolution is coming to our time's developed nations. It may indicate, however, that for a business to be stable over the long term, opportunities and subsequently wealth need to be spread out to cover as many people as possible.

Thefair trade movementfits this ethical imperative to shared opportunity and wealth. Developed and refined as an idea in Europe in the 1960s, organizations promoting fair trade ask businesses (especially large producers in the richest countries) to guarantee that suppliers in impoverished nations receive reasonable payment for their goods and services even when the raw economic laws of supply and demand don't require it. An array of ethical arguments may be arranged to support fair trade, but on the front of sustainability, the lead argument is that peace and order in the world depend on the world's resources being divided up in ways that limit envy, resentment, and anger.

Social sustainability doesn't end with dollars; it also requireshuman respect. Finally, social sustainability requires that corporations as citizens in a specific community of people maintain a healthy relationship with those people. Fitting this obligation into the case of W. R. Grace in Woburn, it's immediately clear that any corporation spilling toxins that later appear as birth defects in area children isn't going to be able to sustain anything with those living nearby. Any hope for cooperation in the name of mutual benefit will be drowned by justified hatred.

Environmental sustainabilitybegins from the affirmation that natural resources, especially the oil fueling our engines, the clean air we breathe, and the water we drink, are limited. If those things deteriorate significantly, our children won't be able to enjoy the same quality of life most of us experience. Conservation of resources, therefore, becomes tremendously important, as does the development of new sources of energy that may substitute those we're currently using.

Further, the case of an industrial chemical company pouring toxins into the ground that erupt years later with horrific consequences evidences this: not only are resources finite, but our earth is limited in its ability to naturally regenerate clean air and water from the smokestacks and runoff of our industries. There are, clearly, good faith debates that thoughtful people can have aboutwhere those limits are. For example, have we released greenhouse gases into the air so heavily that the earth's temperature is rising? No one knows for sure, but it's certain thatsomewherethere's a limit; at some point carbon-burning pollution will do to the planet what toxic runoff did in Woburn: make the place unlivable. Sustainability, finally, on this environmental front means actions must be taken to facilitate our natural world's renewal. Recycling or cleaning up contamination that already exists is important here, as is limiting the pollution emitted from factories, cars, and consumer products in the first place.

All these are actions that corporations must support, not because they're legally required to do so, but because the preservation of a livable planet is a direct obligation within the triple-bottom-line model of business responsibility. Together, these three notions of sustainability--economic, social, and environmental--guide businesses toward actions fitted to the conception of the corporation as a participating citizen in the community and not just as a money machine.

1.2 Stakeholder VS Shareholders

Stakeholder Theory

Stakeholder theory, which has been described by Edward Freeman and others, is the mirror image of corporate social responsibility. Instead of starting with a business and looking out into the world to see what ethical obligations are there, stakeholder theory starts in the world. It lists and describes those individuals and groups who will be affected by (or affect) the company's actions and asks, “What are their legitimate claims on the business?” “What rights do they have with respect to the company's actions?” and “What kind of responsibilities and obligations can they justifiably impose on a particular business?” In a single sentence, stakeholder theory affirms thatthose whose lives are touched by a corporation hold a right and obligation to participate in directing it.

As a simple example, when a factory produces industrial waste, a CSR perspective attaches a responsibility directly to factory owners to dispose of the waste safely. By contrast, a stakeholder theorist begins with those living in the surrounding community who may find their environment poisoned, and begins to talk about business ethics by insisting that they have a right to clean air and water. Therefore, they're stakeholders in the company and their voices must contribute to corporate decisions. It's true that they may own no stock, but they have a moral claim to participate in the decision-making process. This is a very important point. At least in theoretical form, those affected by a company's actions actually become something like shareholders and owners. Because they're touched by a company's actions, they have a right to participate in managing it.

Who are the stakeholders surrounding companies? The answer depends on the particular business, but the list can be quite extensive. If the enterprise produces chemicals for industrial use and is located in a small Massachusetts town, the stakeholders include:

· Company owners, whether a private individual or shareholders

· Company workers

· Customers and potential customers of the company

· Suppliers and potential suppliers to the company

· Everyone living in the town who may be affected by contamination from workplace operations

· Creditors whose money or loaned goods are mixed into the company's actions

· Government entities involved in regulation and taxation

· Local businesses that cater to company employees (restaurants where workers have lunch, grocery stores where employee families shop, and similar)

· Other companies in the same line of work competing for market share

· Other companies that may find themselves subjected to new and potentially burdensome regulations because of contamination at that one Massachusetts plant

The first five on the list - shareholders, workers, customers, suppliers, and community - may be cited as the five cardinal stakeholders.

The outer limits of stakeholding are blurry. In an abstract sense, it's probably true that everyone in the world counts as a stakeholder of any serious factory insofar as we all breathe the same air and because the global economy is so tightly linked that decisions taken in a boardroom in a small town on the East Coast can end up costing someone in India her job and the effects keep rippling out from there. In practical terms, however, a strict stakeholder theory--one insistently bestowing the power to make ethical claims onanyoneaffected by a company's action--would be inoperable. There'd be no end to simply figuring out whose rights needed to be accounted for. Realistically, the stakeholders surrounding a business should be defined as those tangibly affected by the company's action. The purpose of the firm, underneath this theory, is to maximize profit on a collective bottom line, with profit defined not as money but as human welfare. Thecollective bottom lineis the summed effect of a company's actions onallstakeholders. In the case of W. R. Grace, for example, it's important to see that a stakeholder theory would not necessarily and immediately have acted to prohibit the dumping of toxins into the soil. Instead, the theory demands that all those who may be affected know what's being dumped, what the risks are to people and the environment, and what the costs are of taking the steps necessary to dispose of the chemical runoff more permanently and safely.

What's certain is that stakeholder theory obligates corporate directors to appeal to all sides and balance everyone's interests and welfare in the name of maximizing benefits across the spectrum of those whose lives are touched by the business.

Problems with Stakeholder Theory

Here comes the problem of stakeholder theory, because it runs directly counter to corporate governance. Since shareholders are owners of the firm, the firm should be operated to maximize their returns. Stakeholder theory transfers the corporation's focus from shareholders to the needs of stakeholders. By implementing unprofitable CSR programs, firms are denying their fiduciary responsibility to shareholders.

Besides, society has numerous problems that have existed for many years such as poverty and pollution. If these problems were as simple to solve as stakeholder theory advocates maintain, they would have been remedied long ago by profit-seeking firms focused on benefiting society. Many businesses have discovered, however, that the pursuit of society's welfare often leads to a reduction in profits. If managers pursued CSR activities that hampered profits they would likely be out of a job. The owners of a firm desire a return on their investment, and would likely fire a manager that purposely opposed this objective. Social problems are more complex than stakeholder theorists claim. Another critical argument voiced against stakeholder theory is the overregulation argument. This argument maintains that the pursuit of CSR would lead to more rigorous environmental and social regulations for businesses across the world. These regulations would then make it more difficult for undeveloped nations to keep pace with developed nations. The potential for overregulation strikes a huge loss to stakeholder theory.

One of the core problems of stakeholder theory is the presence of competing interests within and outside a firm. Supporters of stakeholder theory argue for a multi-fiduciary relationship between managers of a corporation and all of a firm's stakeholders. By definition a fiduciary relationship involves promoting the interests of one group above others; however, as most everyone recognizes, the interests of shareholders, customers, suppliers, employees, and communities in the management of a firm's assets are conflicting. Shareholders want the highest return possible through capital gains and/or dividends at the lowest possible risk. Customers desire quality products, low prices, and excellent service. Employees crave high wages, excellent working conditions, and a handsome benefits package. These competing demands from stakeholders make stakeholder theory untenable. It would be difficult to balance these desires in practice. Some stakeholders would be satisfied while others would be disgruntled.

It is necessary to note that the implementation of CSR would likely cause significant disagreement among shareholders as well. Some of the shareholders would promote CSR. On the other hand, some shareholders would support the sole pursuit of profit. Even if shareholders agreed that CSR were beneficial, they may differ as to where it should be directed. Furthermore, the stakeholders would be competing for the implementation of various CSR programs.

Although stakeholder theory sounds reasonable, it may introduce more problems than it solves. It is practically impossible to serve the interests of each of the stakeholder groups simultaneously. Contrary to the argument, social responsibility may actually provide a competitive advantage. Even if social responsibility results in short-term losses; it can engender loyal employees and communities and consequently reap long-term dividends.

However, proponents of stakeholder theory go too far in their support of discretionary social expenditures. The benefits of profitable CSR initiatives must be balanced with the fact that unprofitable CSR initiatives may put a firm at a competitive disadvantage.

Shareholder Theory

On the other side of the debate, shareholder theory proposes that the corporation should legally maximize long-term shareholder wealth By providing a necessary product or service at a reasonable price, a business is benefiting society. In financial language, shareholder theory advocates that a firm should maximize the present value of all future cash flows. It is unnecessary and unwise to spend shareholder money for unprofitable social causes. The shareholders have made an investment and are dependent on the firm to provide them with a return. Steve Milloy, a mutual fund manager and critic of CSR, proclaimed the following: “Shareholders do not hire CEOs to be the U.N., to act like a government or to be a charity. They were hired to make money for shareholders.” Milloy's argument is similar to the reasoning of Adam Smith and Milton Friedman. The business of business is to make money. By serving the needs of shareholders, businesses generate wealth that benefits society. If CSR initiatives increase the bottom line, then shareholder theory advocates recommend implementing such initiatives. However, using shareholder money in an unprofitable manner is wrong. No matter how noble the cause, it is inappropriate to be generous with another's money.

On the extreme end of shareholder theory are some scholars who believe that CSR should be abandoned altogether. Although they concede that CSR has increased global awareness of business ethics, the concept is no longer practical. For example, Freeman and Liedtka, professors at the University of Virginia's Darden School of Business, argued that CSR has failed and should be forsaken. They claimed that CSR has not delivered on its promise to create the good society. Furthermore, they asserted that the concept of CSR promotes incompetence by prodding business managers to improve society's shortcomings. According to Freeman and Liedtka, businessmen do not have sufficient expertise regarding individuals and communities to alleviate social problems.

A common argument voiced in support of shareholder theory is that social actions are the role of political and social institutions, not businesses. Bill Shaw, former chair of the Philosophy Department at San Jose State University, insisted that the government through its regulations determines the moral responsibilities of a corporation. Business should make decisions based on an objective ethical code in addition to the laws of society. Thomas Mulligan, assistant professor of management at Brock University, emphasized, “Ethics is more fundamental than law. It is more appropriate to use moral principles to test the validity of laws than to invoke laws to test the validity of moral principles”. The findings of this study indicate that the stakeholder and shareholder theories are both incomplete. Firms should maximize long-term shareholder wealth, but not at the expense of stakeholders and ethical guidelines. They should not deliberately harm stakeholders to make a profit, and they should not go out of their way to promote stakeholders' interests if doing so does not increase shareholder wealth. Firms cannot be profitable in the long term if they have poor relations with their stakeholders. At the same time, firms cannot meet all the needs of their stakeholders and remain profitable. Additionally, business decisions should be based on an objective ethical code of conduct.

Having described the basic responsibilities, which companies should obey, and having compared main approaches to corporate social responsibilities we must conclude in general that development of the concept of corporate social responsibility happens as the reply of business community to a problem of a sustainable development. Among the set of the interested groups we can mark out: owners, shareholders, bodies of federal and local government, suppliers, top managers, workers, labor unions, trade groups, consumers, population, partners, etc. If any interested group of persons isn't satisfied with activity of the organization, its reaction can threaten further existence of the organization. Need of corporate social responsibility is shown available requirements of corporations to provide a resource basis for the activity as social and economic system. Existence of manpower is a key factor of their development in the competitive environment. Socially responsible companies pay much attention to providing such work which would be significant for performers and would help employees to develop and realize the potential. Corporate social responsibility is voluntary and conscious activity therefore originally each organization, the group of workers determines for itself social norms. Social responsibility is considered for each organization individually. In more detail we will consider this question in practical part of our work.

corporate social responsibility

2. The principles of CSR: features and problems

2.1 The global need for CSR

Development of corporate social responsibility in Russia goes in compliance with world tendencies, but meanwhile slowly and actually doesn't cover small and medium business. Activity of the company has to be carried out on the basis of those types of responsibility that were considered earlier. However, the Russian small and medium business is limited, as a rule, only to charity. And only a small amount of the large Russian companies is understood that CSR is part of strategic management, but not just a simply function of public relations. The problem of social responsibility of business, i.e. its responsibility for the people or society in general, gained in recent years the ambiguous development in the Russian Federation. On the one hand, actually since the XIII congress of the Russian Union of Industrialists and Entrepreneurs at which the Russian President in 2003 urged the Russian business to become "socially responsible", rather obvious process of voluntary activity in this area from the most conscious and strategically conceiving part of the Russian business began. Generally it is large private business. It began active dialogue with the interested public groups, began to introduce modern international standards of socially oriented and ecological management, published the first social reports, sometimes in the form of reports of a sustainable development, considered as the most progressive among leaders of world business. Among them generally the largest Russian companies and some banks, such as Norilsk Nickel MMC, JSC Lukoil, RAO UES of Russia, JSC Tatneft, Ilim Pulp corporation, JSC NOVOGOR-Prikamye, JSC EvrazHolding, SUAL group, JSC Magnitogorsky MK, JSB ROSBANK and Tolyatti "FIA-BANK", and others. Activity of the companies in this area is directed also on forming of clear, regular and effective relationship with regional and local government, and also civil society. One of these companies is the Sanofi company.

But firstly, we should start with the quite important research of CSR in global form. Results of the International business research 2008 emphasize one weighty fact - introduction of ethic methods of maintaining business is fundamental for success the enterprises operated by owners. The major factor standing for increase of corporate responsibility, need to attract and hold is the highly skilled personnel for maintenance and further development business (see Fig. 1). This factor was called by 65% respondents of the real research. Further the factor of management of expenses (63%) follows. It reflects understanding of that control over expenses positively influences business and on environment. Requirement to secure trust and loyalty of clients forced 56% respondents to put in a row the most important factors public opinion / formation brand.

Pic. 1

The companies operated by owners aren't under such close public attention as transnational corporations, nevertheless they consider responsible business is the component of the reputation making management process and its long-term strategy. 56% respondents claim that a factor of public/formation of a brand is one of main incentives of ethic business. With growth of the enterprises also grows the level of public attention that forces large multinational companies to take into account a factor of public opinion/formations of a brand. There is no country, where Environmental protection or Pressure of the government was called the most important incentive increases of corporate responsibility.

However three quarters and more respondents from Brazil (84%) and India (75%) called rescue of the planet among important factors. On the contrary, only 21% of owners of business The USA, and also there is less than a third of respondents in other countries with developed economy carried this factor to number of key incentives. Only 38% of respondents called `pressure of the government' important incentive that is the lowest indicator among seven factors offered respondents within this International business research. Results of poll of businessmen, directors managing their own business, concerning their last year's activity within corporate responsibility, show that at the head of the list are actions directed on attraction /deduction of employees (see fig. 3). It confirms results of research, testifying that this factor is one of the main incentives of ethic maintaining business.

Four of five most popular initiatives are related to employees and their workers to places - active promotion of the healthy mode work and wellbeing (71%); granting possibilities of training and acquisition of experience (67%); encouragement of a variety is independent from a nationality, a floor and etc. / the equal opportunities (64%) and granting the flexible operating schedule (62%). All above-stated measures play an important role in a context of social responsibility, nevertheless, same measures play a key role and in questions of managing personnel.

Charity among other measures, increasing the social the companies' responsibility, borrows in our research the third place and it is the only thing from five most popular ways, which has no relation to personnel questions. The international practice testifies about existence of essential distinctions in the cultural spheres and questions of the taxation, which have strong impact on indicators certain countries.

Improvement of control over production wastes and efficiency increase of energy consumption are interconnected. Respondents from many countries including Ireland, Malaysia and Taiwan, reported about taken measures on improvement of control over waste productions and on increase of energy consumption efficiency. In general, leaders among the countries, which are characterized by a maturity economies and shortage of resources, that is strong incentive for initiatives in the field of the effective energy consumption and related areas.

Pic. 2

Rules of control over waste and questions about energy consumption are more global and universal for observance now, at the growing markets there can be problems, connected with inability to leave on the levels set by more mature economies. Russia is among those countries which started introducing measures of improvement of control over waste and efficiency of energy consumption not so long ago. The company Sanofi Group is one of the few Russian companies which introduced the concept of corporate social responsibility and resolves the issues concerning quality of production, satisfaction of the personnel, ecological safety, etc.

2.2 Sanofi Group company and its CSR program. Results and Perspectives

The Sanofi Group is represented in Russia by the following companies: Sanofi, Sanofi Pasteur, Zentiva, Genzyme, Merial. Sanofi products have been available to Russian patients for over 40 years . Currently, Sanofi Russia offers patients a wide range of medicines for socially significant diseases such as diabetes, cancer, cardiovascular disease and thrombosis, as well as diseases of the central nervous system. The world's largest vaccine manufacturer with a portfolio including vaccines against 20 infectious diseases. Sanofi Pasteur has been in the Russian market since 1992 and is now ranked among the leaders of this segment in Russia offering Russian patients 9 different vaccines. Sanofi's generic pharmaceutical platform since 2009, it is the third-largest manufacturer of generic drugs in Europe and one of the fastest growing companies. Its diversified portfolio comprises high-quality, affordable medicines and covers all major areas of medicine. Zentiva has been in the Russian market since 2003.

Medicines to treat rare diseases in the Sanofi Russia portfolio are represented by products from Genzyme - one of the leading biotech companies in the world which joined the Sanofi group in 2011. Veterinary drugs produced by Merial can also be found in Sanofi Russia's portfolio. Merial, which joined Sanofi in 2011, is a world leader in the field of veterinary medicine that focuses on the development and production of innovative products and solutions to protect the health of animals.

Sanofi is a global integrated healthcare leader and the needs of our patients are at the very core of our work. Our mission is to improve the health of patients, improve the quality of their lives and satisfy their needs. As part of the Company's strategy, Sanofi takes on social, environmental and ethical obligations. Their global strategy focuses on four main categories: “Patient”, “Ethics”, “People” and “Planet”.

Table 1

Public awareness programs, educational programs for healthcare professionals and patients, and programs for patient care are a priority area for the Group. The results of the “materiality test”1 conducted in December 2012 confirmed the importance of this area for the company's stakeholders especially in regards to treatment for non-communicable diseases. In the reporting period, 10 programs to improve access to healthcare were conducted. Most of them were launched in 2009 while 1 began in 2012. The number of patients taking part in Sanofi Russia programs is increasing and coverage of Russian regions and cities has been expanded to ensure that more patients benefit from them.

The programs focus on the following key objectives: increasing public awareness of illnesses; improving the skills of specialists in the sphere of healthcare; providing affordable and accessible medicines; educating and informing patients.

The activities of Sanofi Russia are aimed at ensuring the quality of medicines throughout the entire process of distributing pharmaceutical products. The company's responsibility does not end at the stage of product sales to distributors but extends to ensuring the physical availability of Sanofi drugs in pharmacies and hospitals. Sanofi's area of responsibility includes all issues related to the quality of medicines that may arise in the course of storage, sale, or transportation of medicines, including their use by end-users.

Sanofi is committed to providing safe and effective products worldwide that are developed, manufactured, distributed, and marketed in compliance with statutory and regulatory requirements and our corporate values. To ensure patients' safety and satisfy stakeholders' expectations, the Group upholds the same standards of quality across the globe.

Respect for ethics in clinical trials, one of Sanofi's primary focuses, is based on providing solid and reliable data, ensuring the welfare of trial participants, and helping build trust in the pharmaceutical industry.

In the selection of candidates, Sanofi Russia adheres to the principle of objectivity and validity of decisions. To this end, the selection of candidates consists of several steps using various assessment tools. Final decisions are made collectively, taking into account the views of all participants in the selection process. The approach to training and development is based on an annual analysis of business needs and the creation of individual development plans (IDP) which are developed for each employee at the beginning of the year based on his strengths and areas for development.

Sanofi Russia has implemented an effective system for remunerating employees aimed at attracting and retaining staff, and motivating employee performance. The level of employee loyalty at Sanofi

Russia remains high. According to a 2012 survey, the employee engagement index at Sanofi Russia is 82%, up 5% from a similar survey in 2010. Thus, 91% of employees take pride in their work at Sanofi Russia and 73% of employees rarely think about changing jobs which is 11% higher than the Russian average.

To safeguard the health of communities everywhere, we continually seek to limit the environmental impact of our activities. The most significant aspects of the impact of Sanofi Russia on the environment in the office are electricity consumption, water consumption and paper usage.

The organization of safe and effective waste management is one of the priorities of Sanofi-Aventis Vostok's environmental protection activity. In 2012, 97.301 tons of waste were created at the site, most of which fall into low and very low hazard classes (39% and 60%, respectively). Sanofi Russia pays attention to environmental safety in the office and in the factory. The basic document governing the operations of the company in the environmental field is the policy on health, safety and the environment. Plant conservation activities are coordinated by the HSE Committee. The main initiatives to reduce the impact on the environment in the office are the use of motion sensors in warehouses, meeting rooms, bathrooms and faucets.