Posted by: Arjan Tupan | 15 November 2010

Turning Around In A Crisis: Can CSR Help?

On November 11, the Norwegian Chamber of Commerce in Latvia (NCCL) organised their annual conference with the title New Turn in Entrepreneurship Development and Management Practices in Latvia. The conference aimed to showcase good management practices, with a focus on corporate social responsibility, and how this can help Latvian companies to use the effects of the econimic crisis to change their business for the better.

The morning session brought the academic point of view. Research from Rigas Technical University, SSE Riga and the Norwegian School of Management revealed from different perspectives the link between recovery, CSR and the positioning of Latvian business in Norway and Scandinavia. Before going into a panel debate with the Academic World, the Norwegian State Secretary to the Ministry of Foreign Affairs, Erik Lahnstein gave a very open and actionable presentation on how a sound business culture, that has no place for corruption, can help Latvia make a turn for the better. One of the key learnings of the morning session were that an economic crisis can be a blessing in disguise, because there are several examples of how it creates the need for better governance, both in politics and in business. Also, being trustworthy was revealed as a key ingredient for business succes, especially in the relation between Latvia and Scandinavia.

After lunch, the focus was on the more practical examples of Latvian companies and business organisations. One of the returning topics was the tax issue. For businesses to be able to compete fairly, an economy in which evading taxes is seen as a good way to reduce costs is not a good place to do business. One of the companies explicitly gave this as a reason for not doing business in Latvia anymore, but instead producing exclusively for export. Trust was also a recurring issue, especially when it comes to payment for work. To paraphrase one of the presenters: it’s better to do work and being confident about geting paid afterwards, than asking for a partial prepayment, do the work and then nothing else happens.

Another topic that got much attention is the fact that CSR is first of all difficult to define, and therefore hard to understand for Latvian companies what it can mean for them; and on the other hand the fact that there is hardly any data available on good CSR practices in the broadest sense of the word. The sustainability index gives part of the answer to this, and the presentation of some CSR examples from companies in the index was certainly helpful. Also the activities of the American Chamber of Commerce (and the NCCL) are helping in positioning CSR as good business practice and creating a fair and level playing field in Latvia. The biggest question for Latvian companies still is not only what CSR is, but more what it can do for them, apart from being a marketing term pushed on Latvia by foreign companies. This conference, and future activities by the several business organisations will definitely help with that.

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