The present circumstances, globalization, development of informational technology, free movement of resources, challenge the managers and leaders to properly communicate and motivate the specific decisions and actions. The wider range of stakeholders is more interested in the manner that an organization’s management understands their particular needs and interests and, especially, how they are addressed.As the leader should have a symbolic role for the decisions, he is also held responsible by organizations concrete performances. He has to better understand the correlations between the economic and social sides of a business, without allowing a possible threat to the change efforts for adapting to a tougher environment.leaders, globalization, ethics, corporate social responsibility, performances

Marian Nastase

English

Research Papers in Economics

  105 
 
 
LEADING THE SOCIAL BUSINESS 
 
Senior lecturer Ph.D. Marian Năstase 
The Bucharest Academy of Economic Studies, Romania 
E-mail: nastasemarian@yahoo.com 
 
 
 
 
 
 
 
 
 
 
 
Keywords: leaders, globalization, ethics, corporate social responsibility, performances. 
 
1.  A world of economic and social challenges 
 
We live a period of higher interdependencies among different fields of economic and 
social activities. Profit and social matters are not perceived anymore as being fundamentally 
opposed. There is an increasing awareness that social issues are important for any business 
and for the progress of the society.  
Leaders make for an efficient economy. They promote ethics as being good, considering 
that ethics and profit should go together in the long run. The leaders are interested in what is 
happening with their business, but also in what can be done to protect the society (Collins, J., 
Porras, J., 2006). An ethically responsible organization is one where all the stakeholders are 
paid careful attention and their needs are researched and met. 
It’s important to be able to develop a culture for caring for the people and for the good 
of society as a whole.   
Due to the larger number of companies and other kind of organizations, the leaders start 
to take more and more into consideration the balance about business economics and social 
Abstract 
The  present  circumstances,  globalization,  development  of  informational  technology,  free 
movement of resources, challenge the managers and leaders to properly communicate and motivate 
the specific decisions and actions. The wider range of stakeholders is more interested in the manner 
that an organization’s management understands their particular needs and interests and, especially, 
how they are addressed.  
As the leader should have a symbolic role for the decisions, he is also held responsible by 
organizations  concrete  performances.  He  has  to  better  understand  the  correlations  between  the 
economic and social sides of a business, without allowing a possible threat to the change efforts for 
adapting to a tougher environment.    106 
aspects. The integration of corporate social responsibility within the companies messages, 
regardless of the fact that we talk about corporate entities or SME’s show exactly the type of 
transformations that we assist to. 
It’s  not  surprising  that  leaders  have  a  considerable  influence  on  the  economy  for 
creating and developing new business paradigms that emphasis the economic dimension of 
the companies (Fullan, M., 2001), but with a strong social concern. In this respect we can 
remind  that  management  specialists  expanded  the  way  of  approaching  the  company’s 
management  system,  dealing  now  with  five  subsystems  instead  of  four  (Nicolescu,  O., 
Verboncu,  I.,  2008),  as  it  follows:  methodological  subsystem,  decisional  subsystem, 
informational subsystem, organizational subsystem and the new one, the human resources 
subsystem. 
Corporate social responsibility (CSR) becomes a component of the nature to assure a 
sustainable development of the companies but also able to contribute to the development of a 
certain  region,  providing  tools  for  supporting  the  economic  and  social  activities.  In  fact, 
competitiveness becomes a fundamental principle of globalization that affects all the activities 
(Brătianu, C., 2002). 
The government has an important responsibility by promoting the laws that encourage 
the organizations to be more social awareness, to create a framework that foster cooperation 
among educational institutions, companies and NGO’s. 
Of course, that not only the government or the laws can always resolve certain key 
problems of the society and business, but it’s required a more integrated approach with a 
higher cooperation between the public and private organizations (Zecheru, V., Năstase, M., 
2005). Ethical behavior allows the quality of life to increase dramatically (Ionescu, Gh., 2001) 
and it’s practically, the responsibility of each of us to contribute to this new paradigms. An 
ethically approach will be a fundamental direction for the knowledge based economy and can 
do wonders in the creating wealth for society. 
The convergence of a series of contemporary forces as the globalization of markets 
(Burduş,  E.,  2006),  the  increasing  rates  of  competitive  pressure,  and  the  flattening  of 
organizational  structures,  has  provided  new  opportunities  and  threats  for  leaders  and 
organizations. 
The integration of CSR specific instruments proves to be a challenging task for those 
who are in charge with companies performances. Are the specific activities for this field only 
a source of expenses? Or, it’s just a normal way for taking into consideration the needs of an 
important stakeholder?    107 
All over the world CSR and ethics virtually become an efficient way for business to 
become an accepted member of a certain community, with direct and indirect benefits for all 
the involved parts. 
The higher participation of the employees to the company’s activities tends, in time, to 
the diminishing of the distinction between leadership and management, as the organizations 
must have a smooth functioning.  
Such a dynamic context imposes a wide range of approaches and channels that could 
promote and support the CSR by organizations managers and the implementation of the best 
practices that are met all over the world. We talk especially about qualitative approaches that 
are able to make the difference in comparison with the previous periods. Perhaps, this is the 
reason for which some specialists associate the ideas of quality with that of entropy (Brătianu, 
C., 2002). 
In  this  respect,  as  business  dynamics  and  contexts  change,  the  leaders  must  adapt 
themselves  fundamentally  (Collins,  J.,  Porras,  J.,  2006)  in  order  to  maintain  an  effective 
integration of the leadership and management roles, to get best value of the resources that are 
available both internally and externally. 
At  corporate  level  it’s  necessary  to  develop  some  form  of  equilibrium  between  the 
expectations held of them strong direction coexisting with unit-level autonomy and long-term 
strategic thinking coexisting with a measure of tactical and operational flexibility. 
The  knowledge  based  leaders  support  creativity  and  freedom  of  action  among 
subordinates, while providing more autonomy and responsibility. These are ways to increase 
the  participation  of  employees  to  the  decision  making  process  and  to  develop  their 
commitment for the organizational objectives. 
It’s a balance between centrality and participative approach, a way to assure the best use 
of  organization’s  capabilities.  Leaders even  pay  attention  to  their  different  structures and 
particularities, they don’t have to be rigid in strategy implementation, based on single pattern, 
but  they  will  ask  for  a  differentiated  application,  depending  on  their  action  area,  served 
market, community needs and so on. 
Change management is, for sure a difficult balancing act as it requires companies to 
combine both incremental and revolutionary change. The ultimate goal is to assure that the 
objectives are fulfilled, based on  what can be denominated as dynamic stability, achieving a 
balance between the need for stability and that for change (Burduş, E., 2006). 
The  integration  of  CSR  in  strategies  and  policies  can  be  stated and  followed  in an 
explicit manner that can contribute to the achievement of specific objectives within the field 
while avoiding the related perils of organizational pessimism and burnout. 
    108 
2. Integrating economic and social dimensions of organizations 
 
Beyond the elements of formal character that try to establish in a centralized manner a 
certain  attitude  and  behavior  for  organization  human  resources,  the  organizational  ethics 
creates and develops itself some behavior patterns that can be or not in congruence with the 
official versions.  
For many times, as the most part of elements that are part of organizational culture 
(Năstase, M., 2004), the ethics is intangible, unwritten elements, but with a powerful force for 
influencing  company’s  staff.  One  of  the  main  factors  used  for  choosing  the  strategy,  is 
considered  to  be  the  organizational  ethics  that  creates  a  specific  way  of  perception  and 
behavior. 
Corporate social responsibility becomes an important item in the business world and 
undoubtedly one of the challenges for the future (Nicolescu, O., Verboncu, I., 2008). Yet, for 
many organizations it is still a relatively unknown subject as the business managers have still 
different definitions to describe corporate social responsibility. 
For this reason there are a number of issues we must be clarified: 
• How does the organization research and pay attention to the employees, the clients, the 
suppliers and the community in its daily business activities;  
• How are the needs of stakeholders handled? 
• To what extent the organizations leaders promote specific activities oriented toward 
continuous improvement of stakeholders’ life? 
• Is there any values code that is official? 
• Do the managers promote an integrated vision of economic and social issues inside 
and outside organization? 
We could refer here to the case of Sweden, in terms of CSR. The Swedish government 
has a clear policy for promoting business-responsible behavior within Stateowned companies. 
Practically, the organizations are asked through a questionnaire to report on their work related 
to  the  implementation  of  the  principles  underpinning  the  Swedish  Partnership  for  Global 
Responsibility. 
More  than  this,  the  Swedish  Consumer  Agency  (SCA)  promotes  awareness  among 
consumers  and  voluntary  organizations  on  CSR  through  training  materials  and  the 
organization of round tables with stakeholders. These formal and even informal meetings 
could  include  representatives  from  producing  countries,  members  of  companies,  different 
professional associations a.s.o.    109 
In fact, it also published a survey about sustainable consumption in  a global perspective 
entitled ‘Consumption and ethics’ that included proposals for future government consumer 
policy in this field. 
CSR  strategic  approach  will  be  facilitated  by  the  international  know-how  transfer, 
Romanian entrepreneurs, managers and specialists having the opportunity to take advantage 
of the expertise of their EU counterparts who are in more advanced stages for applying its 
specific mechanisms.  We present further few factors that will have a major impact over the 
development and application of CSR within the organizations. 
Top management has the possibility to influence, through its authority, to make 
decisions that can effectively affect any employee. This gives it the power to significantly 
influence the company’s culture. The impact is even larger if he is also the owner of the 
business. 
Leadership and business culture are interdependent. They need each other. The creator 
of a business develops besides a range of activities and products, an working culture that 
reflect its image (Zecheru, V., Năstase, M., 2005), its belief about what it has to happen in 
that company in order to survive and to enjoy of success. 
Starting from the initial idea, he takes other persons that share the vision. The time 
passing, the group becomes larger and larger, it takes a process of organizational learning and 
they appear the cultural elements based on founder’s vision. Leaders are real models (Năstase, 
M.,  2007)  for  the  people  from  the  company  and  for  those  that  have  contact  with  that 
organization. A special role for the founder and its followers is represented by the need for 
setting an institutional goal and providing specific meaning to the activities of their staff. 
A sound integration of this workforce could prove an important source of opportunities 
for the companies, taking advantage of this diversity (Ionescu, Gh., 2001). However, if not 
properly managed we could face some tensions and even conflicts because of cultural clash. 
The managers’ role is to focus their competences and energies towards organization mission 
and objectives achievement and to keep the conflict at a level that could be positive for the 
companies. 
Employees with different needs, different expectations will create a range of pressures 
within organization that have to be correlated, harmonized and directed in constructive ways 
for organizations. At the same time, the employees are part of local community where they 
could be very good company’s representatives, meeting the community needs. 
It is necessary in this context for managers to develop abilities, competences that are 
specific to managing multicultural environment that could enhance the promotion of cultural 
diversity and getting the synergy effect.   110 
The  economic  environment  is  a  factor  with  strong  impact  over  the  building  and 
evolution of organization culture. The favorable conditions reflected in a large number of 
clients, their purchasing power and the access to resources under positive conditions all of 
them support the development process of a healthy and competitive organizational culture. 
The way of thinking, decision and action take a variety of forms that reflect the history, 
but also the recent evolution of different communities’ components. These models represent a 
real cultural heritage that reflects the particular conditions of that business context. National 
and organizational cultures count as some of the most important factors when we consider the 
interaction of an organization with different business partners and local community. 
Change resistance is a reality in all the organizations and entities where changes, with 
higher or lower amplitude, are taking place. The perception of change resistance is defined as 
an  issue  that  provides  dysfunctions  and  supplementary  consumption  of  organizational 
resources in order to realize the change on established coordinates. 
However, many times, change resistance can be an item that contributes to the success 
of change by forcing the change promoters to focus more on the elements that are implied by 
the organizational change. Moreover, many practitioners from the managerial field of activity 
think that is better to deal with a reasonable change resistance than with a general state of 
apathy. 
Local community becomes a more and more important partner for companies also as 
result of its increasing interest versus activities transparency, morality degree, the effects that 
some companies have over the jobs occupancy, environment protection i.e. 
Development of organizational ethics and CSR concepts (Năstase, M., 2007) has been 
favored by major reconsideration of the human resources role to the organization evolution. 
As the organizational culture is considered to be the invisible force that is situated behind the 
easily  noticed  and  tangible  things  from  a  company,  the  CSR  brings  social  energy  that 
determinate people to act in a manner that is going to balance the economic and social issues 
of the modern organizations. 
 
 
 
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LEADING THE SOCIAL BUSINESS

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