THE MODERN THEORETICAL APPROACHES IN THE ANALYSIS OF PUBLIC-PRIVATE PARTNERSHIPS: FROM INTEREST GROUPS TO CORPORATE CITIZENSHIP

Research article
DOI:
https://doi.org/10.18454/IRJ.2016.46.206
Issue: № 4 (46), 2016
Published:
2016/04/18
PDF

Abstract

This scientific article touches a vital topic of contemporary relations between business and government - public-private partnerships (PPP) in the system of public discourse. The article discusses the various modern theoretical approaches to the study of the social aspects of interaction between business and government in modern political science. The author considers the concept and models of foreign public-private partnerships, social investments and corporate citizenship. In the end, the author makes an interesting conclusion that in the modern scientific community is formed and becomes stable a new institutional paradigm of PPP – practice of corporate citizenship. Corporate social responsibility in the narrow sense of the definition goes beyond charity and philanthropy, and today it is expressed in a broad sense - as corporate citizenship, which implies mutual responsibility of business and government to the public.

Вотченко Е.С.

ORCID: 0000-0001-8418-1010, соискатель Кафедры государственной политики и государственного управления, Кубанский государственный университет

СОВРЕМЕННЫЕ ТЕОРЕТИЧЕСКИЕ ПОДХОДЫ ПРИ АНАЛИЗЕ ГОСУДАРСТВЕННО-ЧАСТНОГО ПАРТНЕРСТВА: ОТ ЗАИНТЕРЕСОВАННЫХ ГРУПП К КОРПОРАТИВНОМУ ГРАЖДАНСТВУ

 Аннотация

Настоящая научная статья затрагивает актуальную тему современных отношений власти и бизнеса – государственно-частное партнерство в системе публичного дискурса. В статье рассмотрены различные теоретические подходы зарубежной политической науки к исследованию социальных аспектов взаимодействия бизнеса и власти, проанализированы концепции и модели государственно-частного партнерства, социального инвестирования и корпоративного гражданства. В итоге автором делается интересное заключение о том, что в современном научном сообществе формируется и становится устойчивой новая институциональная парадигма государственно-частного партнерства – практики корпоративного гражданства. Корпоративная социальная ответственность бизнеса в узком понимании данной дефиниции выходит за рамки благотворительности и филантропии и сегодня выражается в широком смысле – как корпоративное гражданство, предполагающее взаимную ответственность бизнеса и власти перед обществом.

Ключевые слова: государственно-частное партнерство, корпоративная социальная ответственность, социальное инвестирование, корпоративное гражданство, взаимодействие бизнеса и власти.

Votchenko E.S.

ORCID: 0000-0001-8418-1010, postgraduate student, Chair of State Policy and Public Administration, Kuban State University

THE MODERN THEORETICAL APPROACHES IN THE ANALYSIS OF PUBLIC-PRIVATE PARTNERSHIPS: FROM INTEREST GROUPS TO CORPORATE CITIZENSHIP

Abstract

This scientific article touches a vital topic of contemporary relations between business and government - public-private partnerships (PPP) in the system of public discourse. The article discusses the various modern theoretical approaches to the study of the social aspects of interaction between business and government in modern political science. The author considers the concept and models of foreign public-private partnerships, social investments and corporate citizenship. In the end, the author makes an interesting conclusion that in the modern scientific community is formed and becomes stable a new institutional paradigm of PPP – practice of corporate citizenship. Corporate social responsibility in the narrow sense of the definition goes beyond charity and philanthropy, and today it is expressed in a broad sense - as corporate citizenship, which implies mutual responsibility of business and government to the public.

Keywords: public-private partnerships, corporate social responsibility, social investment, corporate citizenship, interaction between business and government.

“The business of business is to maximize profits, to earn a good return on capital invested and to be a good corporate citizen obeying the law – no more and no less”, - Milton Friedman [10, 33], a founder of the neoclassical stockholders theory, the owner of the Nobel Prize in Economics.

The article written 45 years ago by M. Friedman in the popular magazine “The New York Times” was not such a scientific guidance, however, today it acts as a subject of debate and research around the world, especially in the study of the interaction between business and government and public-private partnerships.

The relations between the public sector and the business community covers a wide range of interests of both sides: cooperation in implementation of social projects, state control, public-private partnerships, corporate social responsibility, social investments, government initiatives. All these concepts are united by the modern political science that studies the models, concepts and types of interaction between the state and society through the operation of businesses.

In this research paper the author tried to consider the ways of relation mechanism between business and government, evaluate its models in the process of development of contemporary theoretical approaches in political science. Let us see in details the theories presented in the foreign sources, since they have been originated in foreign business practice of responsible corporations. Apart from the vast number of theories in business and government cooperation we consider it necessary to noted the most famous models of the foreign scientific community: stockholders theory - Friedman [10], agency theory - Adams [1], shareholders theory - Freeman [8, 9], Clarkson [14], Robins [15], stewardship theory - Donaldson, Davis [6].

In modern literature the social aspects of the interaction between business and government, corporate social responsibility as well as public-private partnerships may be interpreted as a phenomenon of corporate citizenship. It’s worth noting that corporate citizenship is a new understanding of business communications with society in cooperation with state authorities (Carroll [4, 39], Maignan, Ferrell [11, 3], Bhattacharya, Sen [2, 9]). This definition assumes the responsibility of companies for what is happening in the country and the mutual particiration of the state and business in society life. The approach in terms of “corporate citizenship” provides businesses the opportunity only to not meet the expectations of government and society, but also taking into account the improvement of business reputation to influence actively at the socio-economic environment. The benefits of corporate social responsibility for the organization can include increased customer loyalty, employee commitment, support providers, and improving corporate reputation [12, 956].

Today one of the most discussed topics in the current activity of the company in cooperation with the state and society is the concept of corporate social responsibility (often abbreviated as “CSR”). Often the debate on CSR is not only limited to the discussion at the level of the commercial sector, but reaching the level of government, non-governmental and non-profit organizations, intergovernmental organizations such as the UN or the World Bank. We view CSR as part of the business environment, interacting with the state in the global economy. The term CSR has such properties as: the concept of relatively open rules of application; CSR becomes a so-called “umbrella” concept or brand, which is a point of reference and synonymous with other concepts of the business community [5, 96]; CSR is a dynamic phenomenon, with their changes and additions.

There is, therefore, a large number of copyright definitions that try to describe the concept of CSR. Their content varies with the prevalence of the interests of either the commercial sector or academic research interests, or the public. For example, there are presented different definitions of CSR given in the foreign sources. “CSR 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” (European Commission [7]). “At the core of CSR it is the idea that it reflects the social imperatives and the social consequences of business success” [13, 404]. In general, in the analyzed sources the idea of ​​CSR is business should accept that it plays more than just an economic role. This means a certain enthusiasm to take more than a liability for the activities and impact in business, but in addition, also take responsibility for their impact on society and the environment [15, 330].

The brand new model widely regarded as the “core” of corporate social responsibility and practices of corporate citizenship is a proposed one of the world’s leading professionals in the field of business relations and society, A.B. Carroll’s CSR treatment as “appropriate economic, legal, ethical and discretionary expectations imposed by society organization in a given period” [3, 500]. “Social responsibility can become a reality only when managers become moral, instead of being immoral or have no morals at all,” – A.B. Carroll began the description of CSR in his article “The pyramid of corporate social responsibility” [4, 40]. To understand the essence of CSR, Carroll offers a practice of social interaction - a model of a “pyramid”, in which the four components of CSR are the building blocks, and its basis is the economic characteristic. At the same time, the business waiting for compliance with the law, because the law is encoded by the rules of society accepted and prohibited behavior, this is the second level of the pyramid. The next most fundamental level is to be an ethical business. The obligation to do the right thing, in order to avoid or minimize the damage that can cause the business to its shareholders (employees, customers, the environment). Finally, the business needs to become a true corporate citizen, as described in the philanthropic component, on the fourth level of the pyramid. Business is being waited for donations of financial and human resources to improve the quality of society life. Most important, all of these components work together, they constitute a single entity for the corporation. Only then it can be considered as socially responsible business [4, 43].

Over the past two decades, corporate responsibility was considered as a part of the big changes in the corporate philosophy and practice of the company. This is the movement of business ethics [16, 4]. L.J. Weber takes us to the mantra of “good ethics - good business”, which means that “to follow high ethical standards relates and contributes to business success” [16, 15].

It is also important to mention that nowadays the public-private partnerships, social responsibility, social investments are regularly perform as elements of a new modern “quality standard” of business and government relationships – the corporate citizenship. Sustainable development of political and economic processes makes the corporate citizenship reflect the transition of companies from charity to a focused investment at national and regional levels aimed at addressing the most urgent issues for the state in the field of employment, poverty alleviation, education, safety, health and the environment. Thus, in the science practice it is forming a fundamentally new paradigm in the field of public-private partnerships research that implies mutual responsibility of business and the government to the public. At the same time a separate budget allocation for social and philanthropic initiatives of businesses is a factor of stability, and, despite the reduction in the current profits of the company in the long run, create a favorable social and political environment, and provides a stable income in the future.

References

  1. Adams, S. Fundamentals of business economy // Financial Management. Feb.2008. – P. 46.
  2. Bhattacharya, C. B., & Sen, S. Doing better at doing good: when, why, and how, consumers respond to corporate social initiatives // California Management Review, 47(1), 2004. – P. 9-25.
  3. Carroll, A. B. A three dimentional conceptual model of corporate performance // Academy of Management Review, 4 (4), 1979. – P. 500.
  4. Carroll, B. The pyramid of corporate social responsibility: Toward the moral management of organizational stakeholders // Business Horizons, Volume 34, Issue 4, July–August 1991. – P. 39-48.
  5. Crane, A., Matten, D., Spence, L.J. Corporate Social Responisbility – Readings and cases in global context. New York: Routledge, 2008. – P. 96-97.
  6. Donaldson, L., Davis, J. H. Stewardship Theory or Agency Theory: CEO governance and shareholder returns // Australian Journal of Management, 16. 1991. – P. 49-65.
  7. European Commission Green Paper, 2001. Promoting a European Framework for Corporate Social Responsibility. [E-source]. URL: http://ec.europa.eu/employment_social/publications/2001/ke3701590_en. (date of application 03.2016).
  8. Freeman, R. Edward, Phillips, A. Robert. Stakeholder theory: A libertarian defense // Business Ethics Quarterly, 12 (3), 2002. – P. 331-350.
  9. Freeman, R. Edward. Strategic Management: A stakeholder approach. – Boston: Pitman. – 1984.
  10. Friedman, M. The social responsibility of business is to increase its profits // New York Times Magazine, September 13. 1970. – P. 32-33, 122-124. [E-source]. URL: http://www.colorado.edu/studentgroups/libertarians/issues/friedman-soc-resp-business.html (date of application 18.03.2016).
  11. Maignan, I.,Ferrell, O. C. Corporate social responsibility and marketing: An integrative framework // Journal of the Academy of Marketing Science, December 2004. Volume 32,Issue 1. – P. 3-19.
  12. Maignan, , Ferrell, O.C., and Ferrell, L. A stakeholder model for implementing social responsibility in marketing // European Journal of Marketing, 39 (9/10), 2005. – P. 956-977.
  13. Matten, D., Moon, J. Implicit and explicit CSR: a conceptual framework for a comparative understanding of corporate social responsibility // Academy of Management Review. Vol. 33, No. 2, 2008. – P. 404-424.
  14. Principles of Stakeholder Management: The Clarkson PrinciplesThe Clarkson Centre for Business Ethics (Author). 1999. [E-source]. URL: http://www.mgmt.utoronto.ca/~stake/Principles.htm (date of application 19.03.2016).
  15. Robins, F. Why corporate social responsibility should be popularized but not imposed // Corporate Governance, Vol. 8, No. 3. 2008. – P. 330-341.
  16. Weber, L.J. Profits Before People? Ethical Standards and the Marketing of Prescription Drugs. – Indiana University Press, Bloomington, IN, 2006. – P. 15.