Public Business Social Responsibility

Social Responsibility issues can and must extrapolate beyond the business universe. It's not something only for the private business sector, it apllies also to the public business sector. But even within this universe there are not only matters of initiatives or intents, but issues related to social impact - positive or negative - of a company's business. It’s good to note that most of any organization’s activity has an impact on social level and beyond, of course. However much of this may seem obvious, but the reality is that even though we they talk about it, certainly do not practice it.
To better explain this idea I will illustrate using the context of the in Portugal at various levels, with some questions for reflection on their social impacts.
This past Thursday, October 13, the Portuguese Prime Minister, presented the new state budget, expressing a series of austerity measures, especially violent. The measures include reducing wages and cutting benefits, raising taxes, increasing the workload, among others. How to calculate - and it’s not necessary to know the country’s reality – the way measures such as these affect brutally most of population, or have consequences at the social level but also at the economy’s level.

Cases: 

A recent report, evaluating most of large public Portuguese companies - most of them with severe losses - found that the monthly costs per employee in 12 companies on average are 3.500 Euros. Other two were even above that salary average. Compared with the Portuguese gross average wage, which is 900 Euros, the issue can become shocking. But the problem is not in this comparison, but the finding that these companies do not have enough income to even support their personnel costs, much less all costs. Since this is an absurd on management logic, automatically infers an untenable situation.
Portuguese State and Portuguese families have in recent years living beyond their real financial resources, resulting in the country’s current situation.
In this example, if we think in social responsibility issues, we can see that these companies’ employees may even have good benefits and conditions, a minority in any way compared to the negative social impact caused by this business posture. These conditions are unrealistic, given the reality of the organization, cause an impact that goes far beyond the activity itself, upsetting expenses, and affecting taxpayers in general. Ultimately the benefit employees will suffer consequences sooner or later, as well as creating false expectations for themselves and others interested.

Another case, more international, related to the social impact of rating agencies. In Portugal’s case, with last rating downgrade, the country was faced with a 4 level fall. Not questioning directly the reasons for this decision, I’ll throw it for discussion, if these decisions should not consider their social impact?
Rating a company that pays to see their condition evaluated is one thing and has more limited impact. Now a country’s rating should be weighted differently, especially because of social issues. What is the Social Responsibility of these assessments and how can it be assessed? Does the impact of these decisions is really considered? Is it not time to start thinking about the social impact of activities that affect entire countries and populations? If the ratings are produced by default as a benchmark for investments and investors, shouldn’t the impact and risks be confined to this area? Probably it’s not possible, but the scope of rating agencies assessments should consider the actual impact of the decision, because the effects of the rating downgrade are always bigger, broader, beyond its financial, economic and social development.

One case, crossing recent Eurostat information, where it is pointed out that in 2010, Portugal has only five countries less productive, within the 27 European Union countries. This is even more relevant knowing that in Portugal people work more hours than the European average. Thus, one of the measures imposed by the current Portuguese government is the extension of working hours for the private sector. This has its advantages and can increase productivity and competitiveness. But the relevant SR issues on this subject are on both sides, from corporate responsibility for a change, to the workers who will have to become more aware of the importance of productivity. In the end, investing all in a mix of mutual or complementary responsibility.

Another case, also related to situations that can easily become unbalanced, in this case because instead of investing in means and tools for a sustainable and balanced way, on the contrary, means and conditions are provided for total neglect. This is the case of an audit report of the Court of Auditors on the management of Portuguese public hospitals administrators, which are referred to several questions about the wages system of the administration members. Soon, one of the issues is unclear which are to set their own fees, even if delimited by statute, but that are unable to manage sustainably, when the imbalance begins in them. Another is when some doctors of these hospitals receive more than double those administrators. Not being into question the fairness of certain people to make good, the question is, once again, the balance between revenue and costs/ expenses.
About social responsibility in the public sector, especially around ​​health, hospital management, when the priority seems to be the management and not to those who need aid. How can you put CSR at this level? What are the responsibilities?

Finally, please note that, in terms of justice, for the first time, authorities are speaking to find out who and what has been contributing to public accounts imbalance. Although it is still something in the intentions field, the way it is stated already, in itself, is extremely positive. Where possible, the problems cause identification and for itself, is a great way for Social Responsibility. 

The Obvious Revolution

Orex SM

www.orexsm.yolasite.com