Varieties of Capitalism and Varieties of CSR? The Accommodation of a New Business Concept in the New European Economies

Corporate social responsibility is a young phenomenon in Central Eastern Europe. While during socialism, companies had an integral social function, the managers in East Central Europe were very keen to get rid of the social very quickly following a pure Friedmanite approach towards business “the goal of a company is to make profit”. It is only with external pressure from the European Union that introduced Corporate Social Responsibility (CSR) as a new strategy for growth and sustainability and from multinational corporations that companies begin to integrate CSR into their management strategies. As little is known about the actual range of CSR in this region this paper investigates the social commitment of companies and classifies what type of companies are good CSR performers.In all countries analysed we found sector and size differences with a tendency of large industrial companies doing more CSR than smaller companies and banks. Family-owned companies do tend to do more internal than external CSR but also display less trust in their institutional environment than non-family owned. While companies in the new market economies do generally less than companies in older market economies, they do more external than internal CSR and they do it more explicitly than companies in older market economies. We tested several hypotheses to explain the factors influencing CSR activities. Two models have significant explaining character: the role of the financial market, and the role of industrial relations. Companies that label their activities are more likely to be joint stock companies, listed on the stock market, and use the stock price as most important financial indicator for the control of the company. Companies with a works council and a positive acknowledgement of the works council by the management are more likely to do internal and external CSR than companies without strong industrial relations. Also a general positive evaluation of collective regulation and trade unions by the business leaders corresponds with a better CSR performance