Sustainability issues in social model of coporate social responsibility theoretical analysis and practical implication

Journal of Advanced Research in Management DOI: https://doi.org/10.14505/jarm.v10.1(19).02 Sustainability Issues in Social Model of Coporate Social Responsibility Theoretical Analysis and Practical Implication Vo Thi Thu THAO Faculty of Economics and Law Tien Giang University1, Vietnam vothithuthao@tgu.edu.vn Nguyen Hoang TIEN Tien Giang University, Vietnam vietnameu@gmail.com Dinh Ba Hung ANH Ho Chi Minh City University of Technology2, Vietnam anhdbh@gmail.com Suggested Citation: Thao, V.T.T., Tien, N.H., Anh, D.B.H 2019 Sustainability issues in social model of coporate social responsibility theoretical analysis and practical implication, Journal of Advanced Research in Management, Volume X, Summer, 1(19): 17-29 DOI:10.14505/jarm.v10.1(19).02 Available from: https://journals.aserspublishing.eu/jarm/about Article’s History: Received 18th March, 2019; Revised 3rd May, 2019; Accepted 30rd June, 2019 2019 ASERS Publishing© All rights reserved Abstract: This article delivers a full insight into social model of corporate social responsibility (CSR) based on stakeholders’ theory and wider concept of corporate sustainability The social model of CSR is oriented towards corporate sustainability issues including sustainable performance and development of enterprise with super goal that is searching for a strategic equilibrium between financial performance, social development and environmental sustainability The article will point out the importance and relevance of social model of CSR as it is suitable for enterprises in today’s global business and indicate its implementation as corporate top priority The article also presents challenges in implementation of social model of CSR in enterprises of developing countries, following steps that enterprises of developed countries have been through Using extensive theoretical analysis and in-depth empirical synthesis of previous researches’ findings as selected methodology of study, the article investigates sustainably viable solutions and recommendations to enhance social responsibility and sustainability awareness and business practices in contemporary business and economy Keywords: social responsibility; sustainability issues; stakeholders theory; social model of CSR JEL Classification: M16 Introduction Social responsibility is a field of research which investigates processes and solutions that guarantee a strategic balance between economic growth and social development at both macro level (international, regional, national, local) and micro level (level of enterprises) (Zdravkovic and Radukic 2012, Placier 2013, Rajnoha and Lesníková 2016, Czubala 2016).Corporate social responsibility (CSR, the micro level, level of enterprises) is a field of research aiming at defining what the essence of a socially responsible business is and what business has to to become socially responsible (Nguyen 2015) Generally, CSR is a continuous commitment of the enterprise towards sustainability issues that is to contribute to the economic development while enhancing quality of life of labor force as well as of the local community, society and for the benefit of environment (Rajnoha and Lesníková 2016) World T119 Ap Bac, My Tho, Tien Giang Province, Vietnam 268 Ly Thuong Kiet, District 10, Ho Chi Minh City, Vietnam 17 Journal of Advanced Research in Management Commission on Environment and Development defines sustainability or sustainable development as development that meets present needs without compromising the ability of future generations to meet their own needs (WCED 1987) Alike CSR, the concept of sustainability has also been analyzed in many academic studies at both macroscopic level and microscopic level (corporate sustainability or corporate sustainable development) The idea of sustainability or sustainable development is very popular today as it sets common trend for all spheres of business activities, in all fields of research and development, both academic and practical Academic scholars and business practitioners of different fields are very much interested and concerned about the sustainability issues, among others, of the real estate market, higher education institutions, tourism industry, technology development, architecture and civil engineering, general socio-economic and organizational development through human resource deployment and employer branding with unique perception and understanding related to each field (Priess et al 2017, Volchik and Maslyukova 2017, Teletov et al 2017, Nguyen and Dang 2018, Korauš et al 2017, Bendaravičienė 2017) At the microscopic level, corporate sustainability is viewed as new management paradigm that recognizes corporate growth and profitability, but at the same time requires corporation to pursue non-profitable, social goals, specifically those relating to issues of sustainability, such as: environmental protection, social justice and equity, society and community’s development (Dudzevičiūtė 2012) CSR is a growing organizational phenomenon with vast and interesting implications for practitioners, scholars and society at large (Kot 2014) CSR is a very popular sustainable management concept worldwide and an integrated element of corporate structure and policy in developed countries In developing countries instead, CSR, along with sustainability issues, is a new but fast growing in importance research and empirical topic as companies are beginning to respect its policy, regulations, behavioral standards and norms due to growing pressure from global corporations In context of globalization process, CSR policy and regulations are subjects of constant changes and adaptations from conventional development to sustainable development in line with assumptions of social model of CSR focusing on people, planet and profit, (Chwistecka-Dudek 2016, Briš, Svoboda and Brišová 2013, Nguyen 2015, Dudzevičiūtė 2012) The social model of CSR, together with underpinning theory of stakeholders, sustainable development concept and issues, is a subject of interest, analysis, theoretical investigation and practical implications in this article to contribute significantly to the body of management literature and further research Theoretical overview The evolution of the idea of CSR is a result of tough discussions starting at the beginning of organized forms of business activity on their socially sustainable aspects However, it is not easy to hammer out a ready-made and full definition for CSR and reflect its all practical dimensions, its scope as well as its nature (Filek 2001) In the literature of business and management there are multiple definitions of CSR (Briš, Svoboda and Brišová 2013) It can be argued that the sphere of influence of CSR is not confined within the enterprise itself and no one could accurately define its border yet (Burianová and Paulík 2014) Hence, CSR is ambidextrous and multidimensional conception and each definition returns only a part of its nature The ambidexterity might imply the ability of an organization to facilitate learning, creativity and innovation, enabling it to succeed at adaption over time rather than pursing limited activities, especially in the field of social responsibility and sustainability issues (Sulphey and Alkahthani 2017, Huda et al 2018) CSR means that the company is morally responsible and obliged to settlement in front of law, society and its own conscience for its activities (Zbiegien-Maciag 1991) CSR is a set of obligations of organization in order to protect and strengthen the society in which it functions (Griffin 1996) CSR refers to the way the organization impacts on society in which it exists, it covers the scope of fundamental questions of philosophy, such as: „how we should live in a good relation with each other?” (Stoner, Freeman and Gilbert 2001) CSR is a set of norms determining, indicating the way to interpret the contents of other ethical norms and standards in business (Kubka 1999) Finally, CSR is a readiness to involve in the course of events in the business and society and influence them positively (Konieczny 1998) One of fundamental changes in XX century is just a definite separation of function of enterprises’ owners from function of enterprises’ managers due to increasing role of external funding needed for developing economic activities In reality, managers of enterprises have excessive power and influences on what is going on within and outside Free market mechanisms are not sufficient to control their wrongdoings (Kubka 1999) For the purpose of secure and sustainable development, on the push side, society expects managerial behaviors to comply with ethical standards and orient towards common benefit and interest of the society (Drucker 1998) On the pull side, in order to maintain full prestige and reputation, managers should make business decisions responsibly, be hold accountable for them, considering public opinion and stakeholders’ interest (Man and Macris 2015) These trends 18 Journal of Advanced Research in Management led to the appearance of social model of CSR (Figure 1) that delivers answers to questions related with rights and responsibilities, perspectives, perceptions, attitudes and approaches towards CSR, corporate sustainability issues Figure Social model of Corporate Social Responsibility Other partners Top-managers Staff Law-makers Consumers Owners Government Business Creditors Environmental organization Distributors Media Suppliers Others Au Source: Local community Social model of CSR treats enterprise as a strategic alliance of diverse stakeholders The leading goal of enterprise is not to maximize the benefit of certain groups such as shareholders Its super goal is to act for common benefits of the whole society so that all stakeholders may benefit equally from its achievements (De Wit and Meyer 1998) Organization in social model of CSR should be treated not as a mechanistic machine for making money, but rather as a biotic (organic) systems with specific needs and objectives (Slinták 2017) The leading goal of enterprise are to satisfy the needs and to execute the rights and interests of all stakeholders, to balance between their diverse expectations and to enhance common prosperity, to settle and develop social network of relationships based on mutual sustainable trust and to orientate towards common goals Social trust achieved is not given once forever, it needs constant care and nurture, permanent boost and consolidation (Klimek 2012) All activities of enterprise are directed towards social responsibility, environmental security and business sustainability of the mentioned strategic alliance The measure of success of enterprises is not the satisfaction of certain distinctive group but the satisfaction of all stakeholders Success based on short-term quantitative indicators such as revenue, profit, market share, share value is irrelevant Instead, success should be based on qualitative indicators such as social and environmental contribution, sharing values firmly approved, promoted and glorified by community and society That implies organization in social model of CSR should become social enterprise which treats social objective over market goal, is socially responsible regarding employment of vulnerable groups and reinvestment of profits into social projects, significantly facilitating the idea of sustainable and inclusive development (Bilan, Mishchuk and Pylypchuk 2017) Additionally, organization in social model of CSR should also become socially and sustainably entrepreneurial Social entrepreneurship is emerging as a viable alternative to the traditional institutional setups for making a sustainable impact and reach towards the underserved needs of the low-income population living in the developing economies (Goyal and Sergi 2015) Sustainable entrepreneurship is associated with the ability to discover new opportunities for self-realization and creation of economic and social value for all stakeholders as entrepreneurship is a qualitative social feature that includes human abilities to creatively build and develop innovations into business and society (Raudeliūnienė, Tvaronavičienė and Dzemyda 2014) As mentioned many times above, the basic underpinning concept in social model of CSR is stakeholders’ groups These stakeholders’ groups have goals not always congruent to the goal of enterprise and in the literature they may be classified by different criteria (Mitchell, Agle and Wood 1997, Clarke 1998, Wheeler and Sillanpaa 1998) Managers, as one of them, play a key role, representing the entire enterprise in front of remaining groups of stakeholders (Lewicka 1999) The main and most important factors in social model of CSR are sustainable system of values, mutual trust and respect, strong fundamental of corporate culture desperately needed to preserve sustainability and retain strategic balance to keep enterprise constantly going on To reiterate, the economic efficiency, social responsibility and environmental security should be three inseparable parts of the enterprise in order to create sustainable synergy effect for all parties (Filek 2001) In the Table 1, features of social model of CSR are introduced 19 Journal of Advanced Research in Management Table Social model of CSR CSR model Assumptions Highlighted points: Perceiving of enterprises: Goals: Success measures: Troubles: Governance tools: Social responsibility: Serving society and community through: Source: De Wit and Meyer (1998) Social model § Responsibility before profit; § Sustainable alliances of diverse stakeholders’ groups instead as instruments for generating profit; § Serving interests of all stakeholders’ groups instead of interests of investors; § Satisfaction of all stakeholders’ groups; § Searching for balance between rights and benefits of diverse stakeholders’ groups; § Board of directors consisted of representatives of diverse stakeholders’ groups; § Individual and collective responsibility; § Internal and external responsibility; § Contractual, legal, ethical and social responsibility; § Reaching the common benefit for all (economic efficiency and social effectiveness) Conflict and dispute between stakeholders exist and are associated with their rights and responsibilities originated from the lack of mutual trust and respect In social model of CSR, managers need to reach a compromise in the process of collective decision making and sharing responsibility This requires all sides to have full access to information and become matured in terms of preserving and retaining own ethical standards (Klimczak 2002, Orlowski 2003) Therefore, the settlement of common ethical infrastructure in organizations is of urgent need In order for the enterprise to keep being sustainable and overcome serious conflicts and difficult situations, corporate system of values should be settled and shared beyond the framework of individual values (McCoy 1997) This system and the reliance on it will become strongest motivation to integrate enterprise in all of its aspects to confront the biggest conflicts and inconsistencies Organization culture is important element strictly associated with corporate system of values Culture connects people within and outside organization It determines mutual relationship through creating favorable conditions for the process of communication to be carried out correctly and efficiently Appropriate interpersonal relationship based on mutual trust and respect is the keys to success in management (Rok 2001) Organization culture and values are needed to deliver sustainable conflict and dispute resolution for the purpose of sustainable development of business, society and environment (Kaminskienė, Žalėnienė and Tvaronavičienė 2014) P Drucker, representative of social management concept holds the view that maximizing profit at any cost is harmful and as a result could threaten the existence of a company (Drucker 2001) Hence, the idea of sustainable development in economic, social, environmental and ethical aspects is highly appreciated in social model of CSR The latter aspect is really necessary because ethical behaviors are really precious assets (Gasparski, LewickaStrzalecka and Miller 1999, Rok 2001) The fundamental of ethics which are based on the corporate system of values should be inseparable part of all decision processes in management (Nickels 1995) To highlight the meaning and practical values of social model of CSR, the Table gathered convincing arguments to prove its accuracy and logicalness In recent years there have been significant discussions and debates in both the business and academic world about corporate sustainability or corporate sustainable development This term is strictly related and in some cases used as a synonym for CSR (Wilson 2003) Corporate sustainability can be viewed as a new management paradigm that recognizes that corporate growth and profitability are important; it also requires the corporation to pursue social goals, specifically those relating to sustainability issues, such as: environmental protection, social justice and equity, and local community development Corporate sustainability consists of carrying out actions that improve the economic growth and long-term profitability of an organization (Porter 1985) Furthermore, sustainable business should bear responsibilities towards the environment that go beyond their economic obligations (Hart 1995) Corporate sustainable development is a business strategy that attempts to meet the needs of stakeholders without compromising resources and interests of the local community (Dyllick and Hockerts 2002) Finally, corporate sustainability borrows elements from four mutually related concepts: sustainable development, corporate social responsibility, stakeholders’ theory and corporate accountability (Moon 2007, Ding 2008, Enticott and Walker 2008, Gao 2009, Baumgartner and Ebner 2010) (see Figure 2) The latter is based on economic agency theory, contractual, legal and ethical responsibility of managers towards company and the rest of society as principle, core elements of corporate social responsibility (Swift 2001) All of those elements are already discussed in the above social model of CSR 20 Journal of Advanced Research in Management Table Arguments for social model of Corporate Social Responsibility Profit is not a final goal – profit is necessary for enterprises to exist Profit is a mean to achieve other goals, profit itself is not a goal (Kornacka 2001); Enterprises as social citizens – social responsibility with an aim to boost life’s quality of all members of society (Uyl 1997) is an obligation of enterprises – parts of the society with their role, function and impact on the whole society Therefore, enterprises are not interested in their economic results but also social effectiveness; Enterprises as origins of social issues – enterprises should bear responsibility towards society because they benefit much from society and at the same time are the sources of many social issues (Bartol and Martin 1991); Enterprises have power and resources – due to long term vision, resource focused, enterprises increasingly have power and resources so they can use them to attain social goals in substitute of state and government’s efforts (Filek 1996, Bartol and Martin 1991) Social activities will bring about for enterprises long term profits which is optimal considering the benefits of all sides; Backed by society – social activities will receive support from the whole society and also from many political forces; Prevention is better than cure – social activities is to prevent rising social issues, because sooner or later government will force enterprises to take part in solving them, and then it is too late or the cost incurred will be multi-folded (Kubka 1999); Risk of losing influences – in the long run, if enterprises not use their power and resources responsibly towards society then sooner or later they will be deprived of all power and resource (Bartol and Martin 1991) ; Social responsibility is more important than contractual responsibility – shareholders at any time can sell out all the stocks they possess if the perspective of development of the enterprises is less attractive, but the society cannot bid farewell to them easily, society will suffer together with enterprises, becomes less wealthy if enterprises stop being successful (Drucker 1998) ; Prestige and reputation – social activities contribute to the improvement of enterprises’ prestige and reputation in the market, helping them to boost the market share; Balance in conforming to competing together standards – guarantee the equality in compliance with all economic, 10 legal and ethical standards (Kopycinska 2001); Long term benefits – maximizing profit in the long term without basing on the interests of all stakeholders’ groups is impossible because they impact mostly on the enterprises’ success (Lewicka 1999) Enterprises are complex 11 systems with all stakeholders’ groups actively interacting with each other (each side has its own contributions and expectations), thus these are multidimensional relationships No one can be successful in the long run without supports from others; Source: Griffin (1996), Kiezun (1997), Lewicka-Strzalecka (1999), Chryssides and Kaler (1999), Friedman (1997, 1999), Fleet (1988) Figure Social model of Corporate Social Responsibillity and Corporate sustainability CORPORATE SUSTAINABILITY Idea of sustainable development Corporate social responsibility Corporate accountability Stakeholders’ theory Social model of CSR Source: Author’s Social model of CSR and its sustainability issues could become fundamentals for entreprises to enter into the period of Industry 4.0, because current business models are oriented toward appropriate business service design, open and sustainable innovations development and social network approaches reiteratively underlined above rather than traditional concept of enterprise management Traditional enterprise management concepts 21 Journal of Advanced Research in Management should have been redesigned and redeveloped to challenge strong impact on business of the Industry 4.0 (Prause 2015) Research methodology The literature review reveals a lack of interest in understanding conceptual foundations of CSR, corporate sustainability and their mutual interrelation, focusing instead on description of common, popular CSR concepts and notions, secure and sustainable development practices in developing countries (Ite 2004, Chapple and Moon 2005, Eweje 2006, Arya and Bassi 2009, Wiig and Kolstad 2010) This tendency to understand what companies are doing is related to the type of methodology that most research papers used Case studies discussion, comparative and systemic analysis, synthesis and abstraction of previous researches are frequently used to find the answers to “why” and “how” questions as well as to offset the lack of sufficient findings in the literature (Rubin and Rubin 2005, Yin 2009) The vast preference for qualitative research methods in developing countries may indicate the difficulty of conducting precise empirical research on a wide scale, both spatial and temporal (Husted and Allen 2006, Jamali and Mirshak 2007) Without exceptions, systemic analysis of scientific literature, general analysis and logical reasoning, comparison and abstraction are research methodology designated for the purpose of this article to study to find out adequate solutions and to propose suitable recommendations to enhance socially responsible and sustainable practices in business Hence, the research object is the concept and contents of CSR and associated sustainability issues from corporate microscopic perspectives The aim of this research is, as a result of theoretical analysis, to reveal practical implications of social model of CSR and sustainability issues Furthermore, the aim of this research is also to supplement and highlight ethical dimension, to propose and describe new concepts relevant to them that are “trust based economy” and “moral enterprise” to enhance both social responsibility and sustainability in business Research results discussion 3.1 Corporate Social Responsability and sustainability issues - theoretical analysis The role of CSR is on the rise due to the period with a leading role of the government in managing economy is over and the market with its inherent defects and shortcomings is not capable to regulate and control the economy as well as the social system The visible failure and weakness of all market instruments to control enterprises, such as the rules of law and free market mechanisms, are very concrete evidences Managers still can easily abuse their power and position to gain private or group interests This must lead to the urgent need of formulating a series of self-controlling and soft regulating instruments, such as: ethical norms, social responsibility awareness, trust building and mutual understanding enhancement, creating fundamentals for business culture and promoting common values system Not only the society is to play an important role to boost the CSR and sustainability issues perception of enterprises (push motivation) but managers themselves should also become more aware that socially responsible activities bring about sustainable benefits such as good image, reputation and social confidence which, as brand builders, contribute greatly to reposition enterprises in the competitive map within their industry and across entire market as well (pull motivation) (Man and Macris 2015) Enterprises in developing countries are entering into the period of so-called social capitalism which is based strongly on fundamentals of stakeholders’ theory In case of business activities, particularly those in large and global scales, economic effectiveness, especially in the long run, depends very much on social responsibility and environmental sustainability in the trade, investment, business plans and in the way of their implementation Enterprises in developing countries are competing directly with foreign corporations penetrating their internal markets Both of them should base their core competitive advantage on social responsibility and sustainability issues in which they are being actively engaged The social model of CSR has indicated the complexity of the human beings’ nature and their behavior in society and business as strong linkage between ethics (altruism in social economy) and utilitarianism (egoism in classical economy) In this model, CSR is strictly related with responsibility of managing staff, especially those of highest level, representing the interest of entire enterprise and participating in all processes of decision making, developing and monitoring business strategies such as: board of directors, supervisory board, annual shareholders meeting, labor union (Piotrkowski 2001, Klimczak 2002) The concept of CSR and issues of sustainability are subjects of change over time In XIX century, society expected high level of economic growth and the only goal of enterprise is to maximize profit in accordance with the law Currently, society expects better life quality, keeping environment green and safe, internalizing all expenses related with external effects caused by enterprise in longer perspectives (Lewicka 1999) Enterprise should adapt to new requirements and new business rules Maximizing profit at any cost is too dangerous and could threaten the 22 Journal of Advanced Research in Management existence of enterprise (Drucker 2001) Enterprise should respond accordingly to and fulfill impartially expectations of different stakeholders, treating at the same time social rights and interests just as their own ones The role of managers leading the development of enterprise is to consider a compromise, to find strategic equilibrium between contradicting rights and interests of diverse stakeholders (Griffin 1996) This is hard task to carry out due to the fact that social expectations contradict very much each with other and they are not always feasible and ethically reasonable (Klimczak 2002) Managers should find sustainable solutions to manage potential conflicts and disputes, to balance well the interests of all sides to guarantee that enterprise is operating securely and sustainably In social model of CSR, this is the biggest challenge to keep and retain strategic balance (equilibrium) between diverse stakeholders 3.2 Corporate Social Responsability and sustainability issues - empirical investigation CSR is of great importance for enterprises from both the highly developed and developing countries Developing countries embrace two groups of economies The first group consists of economies with inefficient market mechanisms as they still are in the middle income trap, such as: Thailand, India, Philippines, Indonesia, countries in South America Those countries should restructure their market economies to become more competitive in both regional and international stage The second group consists of the economies that belonged previously to the socialist block such as: Cuba, China, Vietnam, Ukraine, Russia and countries of the former Soviet Union Those countries are the economies being in period of transition from centrally planned system to fully market based system in order to integrate with the global economy For those groups of countries, all the issues related to modern management and conducting business in accordance with market mechanism are still of inadequate interest in both theoretical research and practical application, including CSR and corporate sustainability In developing countries including above mentioned economies being in a transition period as well as ineffective market oriented economies, the issues related with CSR, sustainability and their ethical dimension are less appreciated, at least in first stage of transition period In emerging markets there are reigning perceptions that profit, instead of being a means, still is seen as a super goal for all business activities and only enterprises from wealthy countries may follow noble ethical standards (Kopycinska 2001) It is true that only the highly developed countries that had been through many decades of capital accumulation, with matured and transparent market mechanism, may afford themselves to build and put in operation a so-called moral based economy That is why, compared to the highly developed capitalist countries, those economies are in the stage of the sixties and seventies of XX century, taking into account the level of awareness and consciousness of the sustainability issues as well as the capacity of enterprises to execute their social obligations Their perception on these issues primarily has a push character that is strictly related with carrying out all obligations imposed by law and required by the market with quite passive and reluctant attitude, treating social responsibility and sustainability issues as things that mandatorily must be done In particular cases, if the resources are available, certain enterprises will actively contribute to solve the problems of social security and environmental sustainability (pull character of CSR, in contrary to push) Almost all enterprises in developing countries are of a micro scale They suffer from a serious lack of capital, together with inadequate management capacity and weak economic potential It is not difficult to remark on the correlation between CSR and sustainability issues awareness and the size of enterprises as well as the correlation between CSR and sustainability issues awareness and the level of national prosperity (Filek 1996) Highly developed and wealthy nations often apply more sophisticated ethical standards towards enterprises and expect from them much higher level of awareness and commitment in terms of CSR and sustainability issues Furthermore, the scale of capital engaged, the professionalism in terms of skills and competencies of workers and management capacity are absolutely incomparable to enterprises in developing countries if taking into account enterprises of the same size, for example the sector of small and medium enterprises (SMEs) or even taking into account how incompatible are definitions of SMEs in developed and developing countries (Ho et al 2019) The results of many investigations carried out by research centers on the issues of CSR and sustainability in different parts of the world had proved the truth of the above mentioned facts Those researches are carried out simultaneously both in developed and developing countries The findings indicated that enterprises in developing countries often attach great importance to profit and put the economic criteria and indicators above social and ethical norms in their development strategy as well as in their corporate values system (Kopycinska 2001, Klimek 2012) More seriously, most of the SMEs in developing countries conduct regularly opportunistic behaviors in their business activities Their business operations are executed in a self-interested manner, with short-term perspective in order to attain profit only and as soon as possible Partly and perhaps, this is due to the law which is not strict and severe, the macro policy and measures which are in most cases not strong and rigid enough to deter enterprises from irresponsible and unsustainable behavior 23 Journal of Advanced Research in Management The findings of many researches indicated that enterprises in developing countries have been putting profitrelated criteria very high in their system of goals and objectives (Lewicka 1999) Stunning economic growth, looking for profit as soon as possible and at any cost, especially when the market economy was still in a stage of conception with less competitive pressure, together with unstable legal system are factors that lead to the ”fishing in troubled waters” phenomenon Profit is an overriding, privileged goal to be positioned higher than social responsibility, environmental sustainability and other non-economic activities in order to keep pace of growth with developed countries and enterprises However, the findings of researches and above mentioned perceptions are decreasingly convincing as developing economies are approximating developed economies in terms of understanding the importance of sustainability issues, ethical standards and rules of the law, once the world is globalized and differences between regions are fading away When the domestic, regional and international market become a common playground, equally for all enterprises, CSR, sustainability and ethical issues will become effective means of competition for potential customers, partners, suppliers, human and other resources serving the further development of enterprises Conclusions and recommendation The increasing importance of CSR and sustainability issues in business is due to the role of enterprises in society and serious consequences they have been causing, the urgent need to find out effective and sustainable solutions to deal with them This problem is not a subject of interest as far as the non-profit organizations or government institutions are concerned (Bartol and Martin 1991) CSR and sustainability issues are top priority for enterprises operating on the basis of market mechanism Enterprises are special subjects of interest of CSR and corporate sustainability concept due to their ambidexterity, conflictual nature, ambiguous and multipolar mission: to improve and supplement useful values to the society and to bring about profit for shareholders (Sulphey and Alkahthani 2017) In transitional countries, the role of business, especially those private enterprises, is vital in the economy Thus, their awareness and perception of social responsibility and sustainability issues towards local community and surrounding environment are really important and need to be highlighted correspondingly as they are the core and main driving forces of the economy Private enterprises will have to compete with foreign enterprises on an equal basis at home and globally CSR and sustainability concerns will become their competitive means and advantage in a long term CSR and sustainability issues are not only related to large enterprises but also to SMEs Small enterprises, limited in power and resources, contribute a humble part to the society and community Social responsibility and sustainable development is an obligation of all organizations as constitutive components of society, regardless size and nature (Langenecker and Moore 1991, Klimek 2012) When the size and resources of enterprises are growing, their capacity to carry out social responsibility and orient toward sustainable development should also be proportional SMEs are just seeds, the source of social expectations to become socially responsible and sustainable corporations actively contributing to the sustainable development of the community in the future SMEs should be well educated and strongly aware in terms of civic responsibility and sustainability issues at the earliest stage of development in order to become future responsible and sustainable flagships of the society and economy The CSR and sustainability concept presented above is based on assumptions of social model of CSR and theory of stakeholders groups Based on this model we could put forward suitable solutions to boost CSR and sustainability awareness of enterprises both in their strategic orientation and actions (daily business activities) Firstly, due to dualism and ambidexterity of social model of CSR, for the purpose of corporate sustainable development we should propose adequate solutions to enhance both the sense of individual responsibility (staff members and managers) toward enterprise and the sense of corporate responsibility toward society In order to boost the sense of responsibility of enterprise toward society, each staff member should act in a responsible way, be aware that they are seeds contributing to image, reputation and active role of enterprises in the community The labor productivity in developing countries is low compared to that in developed parts of the world This stems from the low responsibility and weak discipline at workplace and that hasn’t changed for a long time Based on practical analysis, it is urgent to educate and enhance professional qualification of staff members in order to carry out their task efficiently and attentively, as well as train them on the issues of CSR, sustainability and professional ethical standards, code of conducts, attitudes and behaviors required at workplace in order to perform their jobs accordingly Secondly, to enhance the sense of social responsibility and sustainability of enterprise social and mutual trust should be consolidated Enterprise is also a tiny society In order to become socially responsible and orient towards sustainability, before being entrusted with important social missions, it has to be trustworthy for internal staff and to preserve credibility of external partners In order to attain this goal, enterprises should deliver dialogues and conduct interactive debates at all level of enterprise; consolidate mutual trust and understanding by 24 Journal of Advanced Research in Management continuously search for new compromises and consensus Otherwise, the cost to run a business, such as processing transactions, internal and external control, will be too much to be paid In order to progress towards a so-called trust-based economy, enterprises should deploy soft controlling and regulating instruments, such as: § To formulate well-grounded ethical standards and norms – all behaviors in dealing with business situations, processing transactions and solving corporate and social problems, such as disputes and conflicts resolution should be friendly and understandable, effectively boosting multilateral cooperation, enhancing enlisted and consolidated trust and respect of the comprehensive partners and the whole community; § To boost communication and mutual understanding – communication helps promote strategic orientations related to business ethics, social responsibility and sustainability issues It conveys important messages to partners in society, while facilitating cooperation with other enterprises and taking advantage of government support; § To settle fundamentals for business culture and common system of values – common system of values and business culture are related strictly with social responsibility and prerequisite of corporate sustainability They are to self-consolidate over time so that enterprises may keep being developed securely and sustainably; overcome never-ending conflicts, disputes, difficult situations; establish trust and credibility in the society and local community with diverse partners The common system of values is to be consulted and shared as fundamentals forming individual values Common system of values is an integrating driver to further the enhancement of social trust, credibility and reputation, to strengthen sustainable development orientation to deal with challenging conflicts in a very complex and constantly changing business environment; § The role of leaders – CSR and sustainability issues are strictly related with corporate leadership as leaders have great role and immense impact on business strategy (Piotrkowski 2001) Sustainability issues include, among others: better quality of life in terms of diverse, comfortable and attractive choices, preserving natural environment and internalizing costs related with external impact of business (Lewicka 1999) Enterprises should adapt to new requirements, new rules, and new standards to solve new sustainability issues Enterprises should meet and fulfill equally all the expectations of stakeholders groups, putting issues of sustainability above own interests and goals The role of leadership is principally to find a compromise, a strategic balance between conflictual interests of all stakeholders (Griffin 1996) This is a great challenge for business leaders in developing countries who used to think locally instead of globally as they don’t have adequate experiences to act consistently and in line with changing global sustainability issues Changing the way of thinking and doing business in accordance with social model of CSR is an urgent need to regain trust, credibility and build up an positive image in the society and local community Leaders of enterprises should be truly aware that high sense of social responsibility and secured social trust is the core of indisputable sustainable competitive advantage, intangible and priceless asset They should more to create motivation from employers inside, from different partners outside, from governmental institutions to treat responsibility and sustainability issues as effective instruments of competition which help enterprises to fully develop own potential in global stage Rising attention on the issues of CSR and sustainability is not only a characteristic feature of developed economies This is also specific feature of emerging economies being in transition period into market economy The bottom line is the capacity of emerging countries to selectively and appropriately apply experiences of countries with long-standing market economies and developed societies Diverse experiences in boosting effectiveness of CSR and sustainable development platform may be a starting point for emerging countries to establish their own platforms Profound understanding of CSR and corporate sustainability concept and content becomes urgent in globally interconnected and integrated economy Enterprises in developing countries, in order to catch up with the pace of business and trends of global economy, should change their mindset, change the business model from traditional toward sustainable 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