CORPORATE RESPONSIBILITY IN GEORGIA: CHALLENGES AND NEW OPPORTUNITIES

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CORPORATE RESPONSIBILITY IN GEORGIA: CHALLENGES AND NEW OPPORTUNITIES

Authors

Vanishvili Merab, Lali Osadze, Kokashvili Nanuli

Rubric:Economics and Management
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The goal of the scientific article is to search the challenges of corporative responsibility of business sector and new opportunities in Georgia. The article presents an analysis of the main findings of the study based on information provided by businesses, experts and media representatives. The research is fully based on the information provided by the companies in the frame of interviews.

Keywords

business sector
corporate responsibility
corporate management
responsible business
inclusive politics
gender equality
marketing budget.

Authors

Vanishvili Merab, Lali Osadze, Kokashvili Nanuli

Rubric:Economics and Management
110
0

 1. Introduction 

Covid-19
pandemic caused social, economic and the environment protection crisis as in
different countries of the world as in Georgia. Progress
of countries in
meeting the Sustainable Development Agenda has been significantly hampered and
in some areas the situation has even deteriorated (Vanishvili
Merab, et al., 2020) 

The
following challenges were mainly identified in corporate liability in companies
operating in Georgia before the pandemic: low awareness, lack of strategic or
systematic approach to the issue; Unpreparedness for multi-sectoral
partnerships and mistrust between sectors. 

The
pandemic has further enhanced the importance of responsible business behavior
and demonstrated the leadership of companies around the world in the regard
of copying with social, economic and
environmental challenges (Otinashvili
Ramaz, Vanishvili Merab, 2020).
 

Accordingly,
conducting of searching of corporative
responsibility in Georgia again, became important in order to establish how the
behaviour of Georgian business and their attitude towards corporative
responsibility changed in the results of the pandemic. 

The
world business community convinced once again of the importance of corporate responsibility for risk management or
business sustainability. Corporate responsibility is beneficial to both
business and society and the environment - this is an inevitable fact
(Vanishvili & Katsadze, 2021). 

This
scientific article reflects both the immediate steps taken by companies in
response to Covid towards employees, partners, customers or the general public,
as well as their future plans for the implementation of sustainable and
responsible business. 

2.
Materials and Methods 

The aim of the study is to determine how the
economic or social crisis caused by the pandemic has affected the behavior of
the business sector, in the social, environmental or governance direction. In
order to prepare a scientific article, a qualitative research methodology was
developed and the following work was carried out: 

The
first stage - in-depth interviews: Qualitative research was conducted using in-depth
interviews to obtain exploratory information.
Structured questionnaires included open-ended questions; A total of 120
in-depth interviews were conducted, including with 108 businesses, 7 industry
experts and 5 media representatives. Online meeting platforms were used to conduct the
interviews.  

The
second stage - Focus Group Sessions: Following the in-depth working interviews,
focus group sessions were conducted to reveal common challenges in regard
of corporate responsibility during pandemics in the companies existing in Georgia. The focus group issues included 9 topics for discussion. Three
focus-group separate sessions were held with the representatives of small,medium and
big companies. Each session of the focus-groups was conductied via online
platfroms.  

3. Results and discussion  

Based on the research, the results were sorted
into the following main thematic areas: strategic approaches to the corporative
responsibility and priority directions; corporate responsibility decision
making process; social or environmental resources allocated to the business
sector; coverage of corporate liability; sustainable corporate governance and
labor relations; basic challenges and new business
opportunities; multi-sectoral cooperation within the framework of corporate
responsibility.  

3.1.
Strategic
approach to the corporate responsibility and priority directions: the conducted research
confirms that there is not a written corporate responsibility strategy document
in most of the surveyed companies. Exceptions are large companies operating in
the retail market (mainly financial institutions) and Georgian offices of
international companies (Merab
et al., 2021).   

The priority areas
defined and established in terms of corporate responsibility are mostly found
in large or some medium-sized companies; On
the example of the surveyed large and some medium-sized companies, the
following priority areas in terms of corporate responsibility were identified:
Support for persons with disabilities and socially vulnerable groups,
education, innovation, promotion of sports and healthy lifestyles, protection
of the environment and use of secondary resources, care of employees, empowerment
of women and support of gender equality, support of the arts (Vanishvili
& Sreseli, 2022).  

3.2. Corporate
Liability Decision Making Process: It was revealed that the budget allocated within the
framework of corporate responsibility and a separate structural unit / a
manager are not found in most of the companies operating in Georgia, besides in
exceptional cases - large financial institutions, hotels, shopping malls,
construction companies and local offices of international companies (Vanishvili
& Lemonjava, 2016).  

In the case of
most of the surveyed companies, the decision-making structural unit is:Marketing / Public Relations, Human Resources Department / Manager,
as well as in some cases Administrative Department / Manager or Director
(mainly in medium or small companies). 

3.3. Resources allocated for social or
environmental direction in business sector: In most cases (for
large and medium-sized companies), the budget allocated under corporate
responsibility is a part of the marketing budget or reserve funds. Small
companies basically allocate budgets spontaneously for one-time activity (Vanishvili,
Katsadze, et al., 2021).  

Representatives of
the surveyed companies note that the decision-making process under the
influence of the pandemic became faster and more flexible.Companies that did not shut down during the pandemic noted that the
decision-making process for funding charitable and social projects was
particularly accelerated.  

3.4. Coverage of corporative responsibility: In the case of
large companies, corporate responsibility is covered using both traditional and
modern media platforms - social media, online publications and etc.In the case of medium and small companies, more emphasis is placed
on low-budget media outlets for corporate liability coverage.  

The pandemic in
the use of communication channels did not lead to significant changes in large companies.Some companies, especially small and medium-sized companies, have
paid more attention to web and social media platforms, which in most cases
represent their own or their partners' Facebook pages and Internet media. Also,
it was revealed that most of the surveyed companies do not cover charitable
activities at all. The reason given
is that they do not consider it expedient to speak about it in public and there
are some moments of inconvenience. (Vanishvili,
Lemonjava, et al., 2021)  

3.5. Sustainable corporate governance and
labor relations: During the pandemic, large companies were
able to reorganize and implement some of their corporate responsibility
activities on online platforms, while medium- and small companies found
themselves in a rather difficult situation and took responsible actions only
whenever they were possible. 

There was also a
case when the surveyed company created a "mental well-being library"
where employees could find a variety of training and educational resources to
help them cope with stress. One of the major financial organizations noted that an online garden was created on the
online work platform for the children of employees, and applications for users
have been refined to minimize the need for physical contact with managers.(Bedoshvili
et al., 2013).  

Most of the
surveyed companies note that the pandemic also affected the mental and
psychological state of employees, especially during the first wave of the
virus. Some companies (mostly large companies) reported that they had taken
various measures to provide moral and psychological support to their employees.In particular, a number of large companies: hired psychologists,
gave employees access to various psychological support applications, conducted
webinars, as well as organized incentive activities. While, most of the
medium and small surveyed companies used the method of active communication with
them for psychological support of employees; Managers tried to encourage
employees through personal and frequent communications (Shanava
& Vanishvili, 2021a).  

3.6. Key Challenges and new Business
opportunities: Most of the
companies named business rearrangement and digitization of processes as a new
business opportunity, except when the specifics of the business did not allow
them to do so. 

Due to the
pandemic situation, some companies managed to master new business opportunities, create and sell face masks, disinfectant
solutions, as well as companies became
more active in the field of delivery service. 

According to the
companies surveyed, the main business challenges during the pandemic were: Instability
of financial resources, challenges of teamwork due to remote working regime, the
problem of technical equipment of employees, malfunction of communication
channels with suppliers/customers.  

Due to the remote
working mode, the communication between
the employees and the management was intensified in terms of the challenges
arising in the team working process.Also, various activities were introduced - online trainings,
seminars, joint efforts to adapt to the online working process (Shanava
& Vanishvili, 2021b).  

3.7. Multi-sectoral cooperation within the
framework of corporate responsibility: In terms of
cooperation, it was revealed that due to the pandemic, there is a growing trend
of partnerships between businesses and non-governmental organizations, charity
type partnership projects increased partnership-type partnership projects(Mihailovich
& Elishukovna, 2017).  

In terms of partnerships,
most of the large surveyed companies noted that progress had been made, representatives from the different
sectors united (e.g., shopping malls,
tourism sector representatives) and worked together on joint projects to cope with the pandemic difficulties. A part of the small companies stated that
their main concern was "self-preservation" and the situation did not
change in terms of partnership issues. In their case, multi-sectoral
cooperation was not intensified within the framework of corporate
responsibility. 

4. Conclusion  

The following
conclusions and recommendations may be made as a result of the research: 

1. The written
corporate responsibility strategy is almost not found in companies operating in
Georgia, except for large companies. In addition, corporate responsibility issues are mainly
found in marketing strategy. 

2. With
the exception of some of the large companies operating in Georgia, almost no
company has a separate department/manager to make corporate responsibility
decisions. This function is often assigned to the management departments
of marketing or public relations,
communications, human resources or
manager and it is a responsibility of the director or his/her assistant in small companies.  

3. During the
pandemic, switching to remote working mode and digitizing business as well as
developing new digital products were named as a new business opportunity. As for the
business challenges, the following key organizational problems were identified:
Instability of financial resources, challenges related to teamwork due to
remote work regime, problem of technical equipment of employees, malfunction of
communication channels with suppliers/customers.  

4. Due to the challenges caused by the pandemic, communication
between the government and the private sector increased. In addition, during
the pandemic, examples of cooperation between competing companies or companies
representing different fields were identified in some areas. 

5. The need to raise awareness of corporate
responsibility for Georgian businesses should be especially emphasized. It is
important that companies must see the true value of corporate responsibility,
know where the line lies between marketing and corporate responsibility.  

6. It would be interesting to develop an
awareness-raising strategy on corporate responsibility at the country level,
describing long-term and short-term goals in this regard, strategic
alternatives to achieve them, the parties involved and their role.   

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