Does the social relationship matter? The corporate social responsibility

Abstract

A research into the impact of social capital (SC) on economic growth was focused mainly on civil society’s social capital
(SC). The SC related to the enterprises has still received little attention. On the other hand, the design, implementation and
evaluation of large-scale development projects have traditionally been efficiency-driven and dominated by engineering
approaches that emphasize physical outputs and costs. These approaches externalized the unmeasured economic-welfare
decline and environmental damage in affected communities. As a result, many funding agencies had to withdraw their
funding of major dam projects in the last decade. Consequently, major donors have made fundamental shifts away from the
engineering approach to the SC approach focusing on the welfare of affected individuals and communities. The next point
of this discussion is that the prevailing hostility and self-assurance of modern entrepreneurial culture can be observed. The
commercial actions of the dynamically fragmented business on the global competitive edge in the broad virtual networks
under the constant strong pressure of fast changing market conditions determine modern business, that is, the actions in
networks and the governance of changes span beyond effective governance a strong potential of the SC. The recent crisis
has clearly shown a clear lack of this factor in the modern western business, by contraries to the Asian business and
economic growth, lets say in China or India, has exceeded all expectations before and during the crisis the Asian business
is overwhelmingly small in corporate size and family-based, that is, a strong potential of the SC is inherent. The last point of
the discussion is that the EU grant-in-aid for the spread of innovations under the clusterisation of business is ineffective. A
business, especially in Eastern Europe, is really small and fragmented but overwhelmingly adverse to the partners, that is,
we observe the same striking feature; a lack of social capital. These few points of discussion unquestionably denote that a
strong lack of social capital really determines an unsuccessful business on the microeconomic level and a poor economic
growth on the macroeconomic level. A set of four articles under common title “Does the social relationship matter?” will
approach the various factors and processes shaping up the SC at enterprise and regional level and consequently altering
appreciably the local business growth. The first paper aims at developing a method to break down the business
investments in the form of the corporate social responsibility (CSR) investments and determining the effectiveness of these
investments. According to research data the planned place of socially responsible business in Lithuania helps companies
to attract and retain better employees, agree with partners, to meet high standards of CSR raised by foreign customers. At
the same time it reduces the risk of environmental problems and violation of worker's rights and leads to the further rising
of competitive ability and further opportunities for business development in the future that is, leading to rise of value
added. The CSR investments in small companies differ from those in large companies, but some of the features for small
companies become even more pressing. Companies that fail to fulfil their CSR activities may eventually be doomed to
disappear from the market. The conclusions of the present analysis are quite important to Lithuania, as well as to Africa
where a small family-based business predominates and is very sensible to the changes in internal and external social
relationships.